Remember when California’s budget was always late? Here’s why fiscal gridlock is a thing of the past
Over three decades, state budget stalemates were just part of the natural rhythm of governing in Sacramento.
There was 2003, when the Assembly speaker forced a budget compromise by refusing to adjourn for 29 hours and locking lawmakers in the chamber overnight. The Senate had its own lockdown in 2007.
The 1992 summer fiscal fight led the state controller to issue IOUs because its legal authority had expired to pay the bills. History repeated itself when IOUs were issued again during the standoff in 2009.
And no budget battle ever lasted as long as the one in 2010, when lawmakers and staffers watched the Major League baseball playoffs while waiting for a deal.
The legacy of late budgets is what made Wednesday so noteworthy: A fiscal blueprint sent to Gov. Jerry Brown’s desk on the afternoon of the constitutional deadline, in plenty of time for lawmakers and lobbyists alike to hit happy hours in the capital city’s bars and restaurants.
And they could all raise a glass to voters, who in 2010 removed the mandate that budgets be approved by a two-thirds vote in the Assembly and Senate.
“I think we have seen a cleaner, more reasonable and more prudent budget passed since we got rid of that rule,” said state Sen. Hannah-Beth Jackson (D-Santa Barbara).
Voters changed the system with Proposition 25 in November 2010, amending the state Constitution to allow a simple legislative majority vote on the budget as well as a political sweetener of canceling lawmaker paychecks for every day after June 15 they wait to approve a spending plan.
In 2012, voters passed a temporary sales and income tax increase that brought in billions of dollars and made crafting a fiscal plan that much easier.
The combined changes seem to have zapped some three decades of budget fighting.
“You’ve got all the resources and you’ve got a majority vote budget,” said Fred Silva, a veteran state government fiscal analyst who now works with the bipartisan organization California Forward, which advocates for government reform. “The level of public anxiety has been reduced to zero.”
The level of public anxiety has been reduced to zero.
— Fiscal analyst Fred Silva on the impact of five years of on-time state budgets
The last five years have no equal in recent history when it comes to budget promptness. A Times review found state budgets were an average of 11.5 days late in the 1980s. That grew to 31 days in the 1990s and hit its peak in the decade preceding the passage of Proposition 25, where the average budget stalemate was 55 days.
The tardiest budget in state history was sent to Gov. Arnold Schwarzenegger on Oct. 8, 2010 – a 115-day delay that meant many of the document’s economic assumptions were already out of date.
FOR THE RECORD
10:50 p.m., June 19: A previous version of this post said Gov. Arnold Schwarzenegger received a budget 105 days late in 2010. It was 115 days late.
Silva agreed that for all the national media praise of California’s recent record of political compromise and comity, it’s Proposition 25 and the state’s growing economy that deserve the real credit.
“There’s now calm in the fiscal policy realm,” he said.
For the most part since, Republicans have seen their policy ideas become political afterthoughts. Even though they were almost always outnumbered in the past, GOP lawmakers could usually leverage the supermajority budget vote for a few things Democrats had spent the rest of the year ignoring.
“That’s the only real tool we had for making policy changes,” said Roger Niello, a former Sacramento-area Republican assemblyman who served as vice-chairman of the Assembly’s budget committee.
Even so, many of the items were symbolic. Republicans routinely demanded the revocation of wage rules for school bus drivers in the early 2000s, a jab at the powerful labor unions that had insisted on the regulations.
Some years, GOP lawmakers privately cut their own deals, demanding things like tax breaks to help their districts in exchange for joining Democrats in approving a budget.
Jackson remembers one such proposition during a budget stalemate when she served in the Assembly.
“The issue was whether or not we would agree to a $300-million request, if you will, by one of these Republican colleagues in order to get his vote on the budget,” the Santa Barbara Democrat said. “And I was so offended by that, I walked out of the room. That was nothing short of extortion, in my mind.”
Even Republican governors, say longtime state budget watchers, sometimes quietly plotted strategy with legislators of their party to squeeze Democrats during the era of the supermajority budget.
That may be another reason for all of the quick budget deals in the past few years: The intra-party differences between Brown and legislative Democrats are usually small when compared with historic Capitol clashes.
“When three of the leaders are Democrats and they can divide the pie up all by themselves, it’s a little bit of a different dynamic,” said Sen. Bob Huff (R-Diamond Bar), the former Republican leader of the state Senate.
Huff said the lack of a bipartisan mandate in budget deals may have hurt programs important to rural parts of the state, areas that he said are generally represented in Sacramento by Republicans.
“I think it’s a little bit lopsided, skewed towards the urban areas now,” he said.
Other legislative actions still require supermajority votes, most notably any proposed tax increase. Those deals, like a February agreement to revamp and extend a tax on health insurance plans, are rare.
Proposition 25 also changed the rules on what constitutes a budget.
Though Wednesday was the deadline for action, only the overarching blueprint and a handful of attached “trailer” bills were passed. A 2014 court ruling found that was sufficient action for lawmakers to keep getting paid, even if others questioned whether the proposal was fiscally balanced.
But timing matters. The nation’s credit rating agencies were frequent critics of budget impasses, an opinion that may have influenced Wall Street demands for higher yields on bonds and thus added to the state’s fiscal pressures.
Now, said Silva, those same ratings agencies point to the five-year streak of on-time budgets as one of the reasons California is a solid bet for investors.
“That tension is gone,” he said. “It’s a peaceful period.”
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