Hard advice on budget mess
Bill Lockyer has some simple, blunt advice for Democratic legislators struggling to make painful budget cuts: Just assume you’re not going to get reelected. Then dig in and slash.
Democrat Lockyer -- the state treasurer, former attorney general and longtime legislator who was Senate leader -- has experienced many budget brawls, but never a deficit hole as seemingly bottomless as this. Never before has the state staggered so desperately from crisis to crisis.
Next up: The state runs out of cash, can’t pay its bills and begins to shut down by the end of July unless it can sell routine short-term bonds. And the treasurer says he won’t be able to find enough investors unless the state’s books are balanced by the end of this month.
The deficit for the fiscal year starting July 1 has been projected at $24 billion, but it seems to grow every week.
Lockyer was invited by Assembly Speaker Karen Bass (D-Los Angeles) to explain the fiscal facts of life to house Democrats during a five-hour caucus Monday. These mostly-liberal lawmakers soon will be asked to cut spending as they’d never dreamed in their worst nightmares.
“I began with, ‘Why don’t you start with the realization that probably none of you are going to be back here next year?’ ” after the November elections, Lockyer recalls.
“That’s a very liberating thought, and with it you can get a lot done.”
He acknowledges: “They didn’t stand up and applaud.”
Lockyer reminded the lawmakers that voters are very angry. “They want you to solve the problem. And if you don’t solve the problem you’re going to get kicked out of office, so you might as well solve the problem.”
“Fair or not, people blame you” for 12 years of flowing red ink, Lockyer continued. “You’re not going to get reelected. Just put the politics out of your brain.”
Lockyer’s lecture was confirmed by a caucus attendee, who didn’t want to be identified because there’s a gag order on such meetings. “He was very forceful.”
The old pol’s prophesy was probably over-dramatic. Incumbent-protective gerrymandering still will be in effect next year, guarding against a major upheaval in legislative seats.
But Lockyer has the right idea, even if it asks for superhuman behavior. People who aren’t afraid to lose their jobs often think more clearly and honestly.
Politics is not the only thing, of course, that makes Democrats reluctant to cross the spending lobby, which includes public employee unions, welfare activists and educators. Principle and philosophy are at the core.
Many lawmakers are in various stages of shock, denial, anger and resistance about the need to shorten the school year, increase class sizes, cut back on college scholarships, deny health insurance for poor children and whack the aged, blind and disabled.
But there’s no money. There’s virtually no chance of a tax increase, regardless of shouting by liberal activists. And the voters’ rejection of five ballot measures last month -- which much of the left opposed because the package included a modest spending cap -- only made the situation $6 billion worse immediately, and cut off two years of future tax increases worth $16 billion.
“People are just coming to grips with it,” Bass says. “They feel, ‘Here we are tearing apart programs we came up here to support.’ Members need to come to reality.”
All that said, nobody’s lollygagging. And unlike the secretive, dark-of-night negotiations that produced the failed ballot package in February, the current budgeting is relatively open and publicly accessible.
An expanded two-house conference committee, as of Wednesday, had held 13 days of public hearings and deliberations and heard from roughly 2,000 people, the vast majority of them protesting proposed cuts in services.
The conference committee is expected to vote out a proposed budget by late next week and send it to the two legislative floors.
There’s a dispute between Bass and her Senate counterpart, Darrell Steinberg (D-Sacramento), over whether the Legislature should try to fix the budget all at once or in stages.
Steinberg advocates doing it piecemeal, contending that California’s government system is so screwed up and the economy so uncertain that it’s impossible to immediately “fix” the budget. He’d like to cut just deeply enough to keep the cash flowing into August.
Meanwhile, he says, the Legislature could begin to realign the relationship between the state and local governments -- shifting revenues and responsibilities to the locals -- and also seriously consider adopting the recommendations of a blue-ribbon tax restructuring commission scheduled to report in July.
Bass wants to fix the budget now and be rid of the problem. But she’s also talking about “a mix of revenue and cuts” -- meaning higher taxes.
That’s either fantasizing, or trying to persuade special interests on the left that Democrats are doing their best to protect education and the safety net, but Republicans won’t let them.
Gov. Arnold Schwarzenegger, Senate GOP Leader Dennis Hollingsworth and Lockyer advocate balancing all the books now, even if they might become unbalanced later.
“Jumping halfway over a chasm is never a good idea,” Lockyer says. He thinks the Legislature should simply cut every program “across the board” -- whatever it takes. “It has to look fair to the public.”
He adds: “People somehow think they can have all the services and not pay the taxes. They’re going to have to experience the cuts. Do an honest budget. Then possibly you can go to the voters and say, ‘If you want some of this stuff back, you’ll have to pay for it.’ ”
Meanwhile, he says, gimmicky budgeting “has been a cancer growing for the last decade. We’ve got to do the surgery -- very radical surgery.”
There’s no miracle cure. Just cut deep and soon.