Wednesday, August 13, 2008

A State without a Budget :: Day 44 FUZZY OUTLINE OF BUDGET DEAL EMERGES


Dan Walters, Sacramento/Modesto Bee Columnist

August 12, 2008 10:55:04 PM — It's still a long way from being fully cooked, but the fuzzy outline of a deal on the much-delayed, deficit-ridden state budget is becoming visible as the deadline for placing measures on the November ballot draws near.

Secretary of State Debra Bowen says Saturday is the deadline, but Capitol types believe it could be stretched a week or two. And the deadline, whenever it may be, is an important ingredient in any budget deal, because at least one of the pending elements would have to be placed before voters.

The central element is what Gov. Arnold Schwarzenegger calls "budget reform" – some new constitutional provisions aimed at preventing future fiscal problems by creating a "rainy day" reserve and giving governors more authority to cut spending when revenue falls short.

He's willing to trade some new taxes – especially a temporary boost in sales taxes that would raise about $6 billion a year – for those reforms, even though Republican legislators balk at new taxes and Democrats don't like spending curbs.

"We believe they need to come out of their partisan corners," Schwarzenegger spokesman Aaron McLear said Tuesday, adding that if there's no deal before the ballot deadline, there will be a "total meltdown."

It's apparent that if Schwarzenegger can reach agreement with Democrats on reforms to be submitted to voters, plus other details, he would then work on two Republican senators to vote for the deal, thus giving it the required two-thirds majority, and if that happens, it would ramp up pressure on Republican Assembly members to agree.

It's assumed that Republican Sen. Abel Maldonado of Santa Maria would go along; he broke ranks with other Republicans last year on the budget. And when Bakersfield Sen. Roy Ashburn indicated to a radio talk show host on Monday that he might be open to a deal that included taxes, despite the GOP's no-new-tax pledge, the speculation meter soared and conservative radio talkers and bloggers immediately raised the alarm.

"We are going to have to see what the total package is," Ashburn said. "What the governor proposed I am not sure can be characterized as a tax increase."

There are obviously a lot of "ifs" attached to the scenario, and with the ballot deadline looming, there's not a lot of time to get it done.

It's at least noteworthy that this year, Schwarzenegger is doing something that he eschewed during last year's version of the annual budget battle – getting his hands dirty by trying to pick off individual Republican legislators rather than relying on the GOP leadership to deliver.

Whether the governor can make it happen is still uncertain, if for no other reason than his credibility in the Capitol is not very high, given his tendency to draw lines in the sand and then immediately erase them.

Republicans remain fearful that he'll promise a tough budget reform package, but then cave in to Democrats as he has in the past, leaving only the new taxes in place.

The Modesto Bee | Dan Walters: Fuzzy outline of a California budget deal emerges

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