Gov. Jerry Brown wants to tame budget with tax extensions, deep cuts

Gov. Jerry Brown on Monday will unveil his plan to lead California out of the fiscal wilderness and back to prosperity: a politically charged mix of deep cuts and higher taxes.

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There will be little to like and something for just about everyone to hate. But it is in giving Californians a dose of painful budgetary truth that Brown hopes to succeed.

To tame the state’s chronic budget shortfalls, the Democratic governor will request cuts in a broad array of state programs and services, particularly those that lend a hand to the needy, according to those familiar with his plan.

He will call on lawmakers to sharply curb welfare spending by reducing eligibility and payouts and cutting the duration of benefits from five years to four. Under Brown’s plan, Medi-Cal would let patients see the doctor less often and would require them to pay more when they do. Children in the state’s Healthy Families insurance program would no longer receive vision coverage, and their families would pay more for medical care.

The governor will also ask voters to approve an extension of 2009 tax hikes on their incomes, purchases and vehicles in a spring special election, insiders say, and he will tie the tax extension to protecting school funding.

Brown will propose trimming expenditures on universities and cash grants for the poor. And he wants to lower the maximum age for children who benefit from state-subsidized child care. In addition, he will try to curtail money for redevelopment and other business-friendly tax provisions.

To succeed, Brown must execute a two-step that tripped up his immediate predecessor, Arnold Schwarzenegger, and many other governors. First, he must sell his plan to Sacramento insiders — legislators and lobbyists — and second, he must persuade the public to embrace his austerity package.

It’s a risky gambit that just might work, veteran Democratic strategist Darry Sragow said.

“It’s sort of like Dr. Phil. This is Dr. Jerry doing an intervention,” Sragow said. “It’s tough love.”

In his inaugural address, Brown billed his impending spending plan as “a tough budget for tough times,” a painful document necessary to combat a deficit that is projected to be $28 billion over the next 18 months. That is equal to roughly a third of annual general-fund spending.

“At this stage of my life, I have not come here to embrace delay or denial,” the 72-year old Brown said. He has promised to lead by example, and on Friday he slashed his own office budget by 25%.

Brown wants to act fast, while he retains the political capital that came with his election and while he’s still in a honeymoon phase with voters. He has said he will push legislators to approve a spending plan within 60 days instead of the usual seven or eight months, which would allow for a spring special election.

Bill Hauck, president of the California Business Roundtable, said he felt encouraged by Brown’s early steps, even if the governor is promising only bad news. He said the sum of Brown’s proposals — the chance to actually tackle the state’s intractable deficits — was greater than the sum of its painful parts.

Balancing the budget “requires everyone to stop denying the reality and, ultimately, to sacrifice,” Hauck said.

Such selflessness, however, is uncommon in Sacramento.

“We have lost the ability, it seems to me, for groups to rise above — occasionally, at least — their own specific interest and say what’s the best thing for all of California,” Hauck said.

Lt. Gov.-elect Gavin Newsom said defenders of the broken status quo were already mobilizing.

“The special interests of all types are going to come out of the woodwork and are going to do everything to fight [Brown’s plan],” Newsom said. “When you’ve got a city of Sacramento that has eight times more lobbyists than legislators, that’s your real problem.”

The governor huddled privately with each legislative leader last week, meeting with them in their offices — a symbolic difference from Gov. Arnold Schwarzenegger, who usually required that lawmakers come to him.

Brown hopes that the Democrats who control the Legislature will accept many of the cuts, particularly those aimed at the state’s health and welfare programs, that they brushed aside when proposed by Schwarzenegger, a Republican. Brown’s main selling point is that the cuts are now part of a comprehensive solution.

But powerful labor unions, who are traditional Democratic allies, are uneasy about such spending reductions.

“We clearly do not believe additional cuts will benefit the people of California,” said Willie Pelote, political director for the influential American Federation of State, County and Municipal Employees.

The governor will need support from some Republicans as well as Democrats to place his tax question before voters. To achieve the two-thirds majority required for the Legislature and governor to put a measure on the ballot, at least four GOP lawmakers would have to say yes.

All but two of the Legislature’s 42 Republicans, however, have signed an anti-tax pledge.

State Senate Minority Leader Bob Dutton (R-Rancho Cucamonga) said he didn’t see a need for extending the tax hikes.

“That money is just going to be wasted anyway,” he said.

shane.goldmacher@latimes.com