A Year of Partisan Paralysis in Capitol

Gov. Arnold Schwarzenegger’s yearlong focus on prying power from lawmakers provoked a backlash that paralyzed this year’s legislative session, shredding the agendas of both the Republican governor and the Democratic majority.

Schwarzenegger’s decision to call a special election for November colored the entire eight-month session, which ended minutes before midnight Thursday, officials in both parties said.

Many of the governor’s proposals -- to reorganize state government, expand Medi-Cal managed care to include the disabled and blind, lower prescription drug prices, encourage solar power -- were undercut by Democrats distracted by and angry about the fall ballot.

Many of the Democratic leadership’s desires for the year also ended in disappointment.

“Normally we have an off-year where we lay down arms and focus on making things work,” said State Sen. Debra Bowen (D-Marina del Rey). But “the special election is the low-hanging cloud that fills the building.”

Schwarzenegger has argued that Sacramento’s political culture must be reformed if the state wants to end its chronic fiscal crises and make itself more hospitable to businesses. Democrats insist that fundamental changes are necessary if California’s schools are to be improved and its overburdened healthcare system cured.

None of that happened; instead, there was stalemate.

Both Assembly Speaker Fabian Nunez of Los Angeles and Senate President Pro Tem Don Perata of Oakland had intended to concentrate this year on middle-class issues such as housing, education and transportation.

But they abandoned a fight for a disputed $3 billion for schools -- the amount they say is required by a 1988 voter initiative -- out of concern that it would lead to a prolonged budget battle. That could have given Schwarzenegger grist for his special election campaign, which includes an effort to restrain state spending and change the way schools are funded.

They also gave up on borrowing at least $7 billion to improve California’s dilapidated roads, bridges and infrastructure.

“Given the opportunities that were evident in January and what we are reviewing today at the end of the session, it was a wasted year,” Perata said. “There were some accomplishments but, frankly, in an off-election year, we had some huge opportunities that were squandered. And they were done so unnecessarily for a special election that we don’t need, we don’t want and nothing will be resolved when it’s over.”

Schwarzenegger’s legislative director, Richard Costigan, said that although “there have been some significant successes” in the legislative session, “we’re a little disappointed with where we’ve come in the past couple of days.” He acknowledged that “it’s hard not to say” the special election “got in the way.”

Social issues dominated the Democrats’ achievements. They granted driver’s licenses to illegal immigrants and marriage rights to gays -- though Schwarzenegger has said he intends to veto both bills. They also barred antiabortion pharmacists from refusing to fill prescriptions for emergency contraception.

There were examples of collaboration, but most were modest. Republicans, led by the governor, and Democrats took action to reduce the prevalence of junk food and sugary drinks in schools and encourage fresh fruits to be distributed instead.

They agreed to reorganize the state prison bureaucracy and on plans to finish rebuilding the San Francisco-Oakland Bay Bridge. They decided to distribute $18 billion in federal Medicaid money to hospitals over the next five years. They created a new law, which Schwarzenegger has signed, designed to stop car dealers from charging excessive interest on loans.

But the diminished expectations that have come to rule Sacramento were evident in the accomplishments that leaders cited at the session’s end.

Kevin McCarthy of Bakersfield, the Assembly GOP leader, boasted that lawmakers had raised the state’s credit rating above Lithuania’s (though he said much more improvement was needed). Nunez noted that a state budget deal was completed nearly on time -- 11 days late, the promptest in five years.

The speaker also bragged that, for the first time in a number of years, the budget did not siphon off money directed to transportation projects.

“When you look at the civility with which things got done in this Legislature,” Nunez said Friday, “I think it is a disservice to a lot of the progress we have made to both dismiss the hard work that has gone on during this legislative session and the things that got accomplished.”

Democrats had objections of substance to the Schwarzenegger proposals they killed and may well have rejected them anyway. But common ground proved elusive even when both sides insisted that they shared the same desires.

Both the administration and Democrats said they wanted to increase California’s $6.75-an-hour minimum wage, but each tried to include things in the legislation that the other spurned. Democrats approved an increase, but it is higher than the governor offered, and his aides said he would veto it.

Expanding children’s health insurance was another area in which Schwarzenegger and Democrats appeared to possess a common goal but had little to tout at the session’s end. The Legislature approved a bill that would provide health insurance to many of the 800,000 children in California who have no medical coverage, but the measure lacks money to pay for it.

Schwarzenegger -- who as a candidate said, “We have to make sure that every child in California is insured. That is the most important thing” -- has not decided whether to approve the measure, aides said.

The governor and Nunez both desired tax incentives to keep Hollywood from leaving the state to make films but could not muster enough support in the Senate to get them enacted.

The defeat was particularly embarrassing for Schwarzenegger, a movie star who has been pledging to do something about “runaway production” since the 2003 recall campaign.

Labor unions, furious that the governor’s allies have placed on the fall ballot a measure designed to curb their political influence, helped sabotage a number of the governor’s legislative efforts, according to people in both parties.

They successfully urged Democrats to summarily reject an agreement Schwarzenegger had negotiated with the pharmaceutical industry to lower drug costs, said State Sen. Deborah Ortiz (D-Sacramento), who sponsored the bill on the governor’s behalf. “It had nothing to do with the policy,” she said. “It had to do with not wanting to give the governor something.”

On behalf of electrical workers, Democrats inserted into Schwarzenegger’s premier environmental effort -- a plan to put solar panels on 1 million roofs -- provisions that would have mandated union-level wages for large commercial construction projects. With Schwarzenegger saying the changes were unacceptable, a compromise proved impossible to reach.

“It was very clear the electrician unions were just more powerful, and they lobbied heavily,” Schwarzenegger complained Friday. “The legislators went as far as they could, but they are beholden to other people.”

The business lobbies that are underwriting Schwarzenegger’s ballot measures -- a group the governor excludes from his condemnation of Sacramento “special interests” -- also proved a potent force in the Capitol.

The alcohol industry jammed through the Legislature a last-minute measure that allows liquor companies to avoid substantially higher taxes on sweetened spirits.

Bowing to intense opposition from agricultural interests, oil companies and the California Chamber of Commerce, lawmakers also killed a measure backed by the state’s district attorneys that would have aided prosecution of serious air polluters.

Siding with ammunition manufacturers, the Legislature rejected two proposals to place identifying marks on bullets to make them easier for law enforcement officials to trace.

Barbara O’Connor, a political science professor at Cal State Sacramento, said that with Schwarzenegger raising millions of dollars from corporate interests for his ballot measures and Democrats relying on union money to counter the governor, neither side was in a position to show independence from its allies in the fall fight.

“The lines have been drawn, money is being raised in a frenetic clip in an election year where we have no candidates and people are arrayed based on who they need for this election,” she said. “Any hope for bipartisan solutions is out the window. It has gotten very vitriolic and very partisan and deliberately so.”

The special election also stymied lawmakers’ ability to address other issues. Democrats did not even bother to pass several measures they approved last year requiring lower prescription drug prices, because they knew the issue would be decided through competing measures on the Nov. 5 ballot -- one from consumer groups and the other from the drug industry.

Two of Schwarzenegger’s ballot initiatives would wrest away legislators’ ability to determine election district boundaries and much of their control over state spending. In response, Democrats more aggressively challenged Schwarzenegger’s prerogatives in running his administration.

They rejected several efforts to reorganize the state bureaucracy in ways that would have given him more control over energy policy and consumer regulation. They also fired two of his appointees to senior positions: Cindy Tuck as the head of the Air Resources Board and Joan M. Borucki as motor vehicles commissioner.

Democrats also declined to enact an agreement Schwarzenegger struck with the Bush administration to move 554,000 disabled and blind Medi-Cal recipients into managed care, even though it will mean the state sacrifices $90 million in federal funding.

Both sides leave town with public approval ratings drastically below where they were last year, when they forged agreements on lowering workers’ compensation rates and borrowing $15 billion to bail out the state.

With polls showing little enthusiasm for Schwarzenegger’s ballot measures, Democrats hope a trouncing in November will leave the governor chastened and weakened as his term comes to an end. Schwarzenegger insists that approval of his initiatives will make Sacramento more amenable to his efforts down the road.

But even some of those who back the governor say the hard work cannot begin until the election is over. Sen. Dick Ackerman of Irvine, the GOP minority leader, said: “We need gigantic education reform, more than what’s on the ballot.”

Times staff writer Nancy Vogel contributed to this report.