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Bill Leonard

A Battle Won

Republican legislators achieved two great victories this week. The newly adopted budget has cut some spending so it is closer to being balanced and even more importantly taxes on working families and businesses are going down. Political battles are rarely clear cut victories and I am sure that our legislators are exhausted and perhaps wondering if all of this effort was worth the outcome. Most definitely.

Despite the best efforts to trade a tax election vote for reforms it was never going to be a clean deal. Getting liberals to vote for real reforms on pensions, CEQA, regulations or any of the other messes they created is like asking them to invite Sarah Palin out to dinner. It is not going to happen. And if the Reps did get 6 Dem Senators and 13 Dem Assemblymembers to vote with them (assuming all the reforms could be done with majority votes) there would be nothing stopping the others and their allies from sponsoring a referendum to repeal all reforms even before they take effect. The reforms proposed also are quite common sense. Nothing radical like abolishing CEQA or abolishing pensions for government workers. Therefore the impacts of these modest reforms would not be known for years and even the modest ones would be challenged in the courts.

Despite an indifferent or even hostile press it seems to me that the Republicans have made it known that they are the party of reform and the party of change. Even though these reforms were never a strong possibility I like it that the Reps have put their ideas in writing and let the voters know that a Republican government in California would be different.

The budget itself remains a mess. Still filled with questionable fiscal assumptions and now based on a booming economy that no one else can see. It is good that some spending was reduced although I have little confidence that the administration will reduce spending in those areas of low priority or ineffective programs.

One trick may actually turn out to be a good precedent. These are the budget cut triggers set for January 1st. This is similar to the Arkansas budget process where the legislature adopts alternative spending plans based on different levels of revenue. The Finance Department then implements the appropriate spending level based on the latest revenue information as the year progresses. There should be no mid-year legislative nightmares because the hard decisions of what to cut if revenues do not come have already been made.

Unfortunately for California, it is my suspicion that these triggered cuts were never intended to be implemented. This may well be another budget trick to placate Brown to sign the budget, Chiang to write paychecks to legislators, and Lockyer to convince Wall Street that it works. If it is a trick and if the miracle revenue does not appear then I predict a very sorry Christmas for legislators as they meet in late December to hastily pass something that stops the Director of Finance from triggering the cuts. Watch out for more and fees since cutting budgets is off the table.
So in the middle of the season of good will towards men, California state government and its dependents will be again filled with fear, uncertainty and doubt as the DOF director puts her finger on the trigger. In particular California legislators will have to confront big ticket votes as they study the new district maps trying to determine if they have a district to run in or how many other incumbents are running against them.

In the budget battle of June 2011 I give the victory to the Reps but I do see another budget battle ahead in six months which will challenge everyone once more.

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