LACK OF TRUST FUELS STATE BUDGET FIGHTS

CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, JULY 7, 2009, OR THEREAFTER

BY THOMAS D. ELIAS
"LACK OF TRUST FUELS STATE BUDGET FIGHTS"

It's easy to finger ideology and campaign money as reasons behind the seemingly endless deadlocks and battles and threats encountered every year en route to devising the state budget.

Democrats, it shortly becomes obvious, can be counted on to protect government programs and the workers who run them, members of public employee unions who year after year provide money and footwork for their campaigns.

Republicans are just as determined to resist any new tax and look after the interests of wealthy developers and corporations that fund their campaigns.

But there's another key factor at work here, something missing from the Sacramento mix these days, something that allowed long-ago politicians to reach agreements even when they were just as polarized as today's. That would be trust.

Back in the days when Pat Brown and Ronald Reagan and Jerry Brown and George Deukmejian held sway in the Capitol, citizens and lawmakers alike knew where they stood. Even though some of those past governors could be eccentric and unpredictable, when they made a promise to a colleague, it was almost always kept. It certainly wasn't abrogated within a day or even a month.

But that kind of solidity is a thing of the past. For one thing, because of term limits, lawmakers and governors barely get to know one another before they're gone. Misunderstandings are common.

Take the dickering and bickering that's gone down during June, a time when experts on all sides - within government and outside - warned of fiscal catastrophe if no budget were agreed upon first by June 15, then by June 30 and later by who-knows-when.

The deficit to be dealt with was projected at $14 billion in mid-May, $21 billion a week later and $24.3 billion a week after that. No, state tax revenues did not fluctuate nearly so often or so much. Which means no one can know which figure to trust, if any. Who knows how much must be cut from the budget or raised via new taxes or dealt with in some combination?

No one knows for sure because no sane person would trust the figures thrown about.

Revenue and deficit forecasts always derive from some kind of alchemy and are rarely reliable. They always turn out either to exaggerate cash flow or the lack thereof. So that's not new.

What is relatively new is the lack of trust between the politicians charged with solving California's problems.

A classic example occurred during the third week of June. First, Gov. Arnold Schwarzenegger objected to an attempt by majority Democratic legislators to levy a couple of new taxes (on cigarettes and oil depletion) and the possible elimination of corporate tax breaks granted as part of the budget deals of last September and February. The Democrats, Schwarzenegger suggested, were reneging on a promise they made prior to the February budget deal, one that committed them not to seek any more new taxes or fees this year. Uh-uh, the Demos insisted. There was no such promise.

The next day, Democratic leaders accused Schwarzenegger of telling them one thing in a private meeting and then announcing something very different to reporters. That came when Schwarzenegger promised to veto the majority lawmakers' attempt at a budget compromise if it contained any new taxes.

The governor, said Assembly Speaker Karen Bass, took a very different tack in private. "That was not the indication he gave us at all," she said of the veto threat.

So Schwarzenegger accuses Democrats of saying one thing in private and doing something very different in public. And they promptly return serve. How are these people supposed to arrive at an accommodation when they can't even agree on what they told each other, a charitable way to describe their differences?

Meanwhile, Schwarzenegger's own party has lost all trust for him. "I am very confused," writes Stephen Frank, former head of the arch-conservative California Republican Assembly, in his blog. "In February, the governor gave us, and he was proud, the largest tax increase in history….Today, he says 'None of that will fly with me…it would be irresponsible to go back to the people and to say we want to increase your taxes (again).' Question: Which Arnold is governor?"

It's one thing to be hard-line and refuse all compromise, as most legislative Republicans in this state have done on all new tax proposals of the past decade or more. It's quite another to take positions so contradictory that no one knows what you believe or stand for. Combine this with the lack of trust engendered by the alleged differences in public and private positions and you have a formula for long-term stalemate.

No one should be surprised if that's what ensues.

-30-
Email Thomas Elias at tdelias@aol.com. For more Elias columns, visit www.californiafocus.net