First, let me commend the Governor for most of his budget. He is still claiming that a fee is not a tax, which is wrong, particularly when it is for essential government services like fire fighting, but he is finally getting around to actually cutting government. I also believe that cutting the size of state government is so important that no Republican should spend any time trying to defend any government program, even prisons. The general budget strategy of the Democrats in the past has been to increase welfare and health care spending, and to cut police, fire and prisons. Republicans have taken the tack of pushing to increase police, fire, and prisons, and cut welfare and health care spending. The usual compromise between Democrats and Republicans has been to increase spending on everything.
Second, let me commend Senate Republicans, whose insistence on some cuts last year turned a budget crisis that would have started out at $21 billion and grown to $30 billion, into a budget crisis that has started out at $14 billion, and will expand to $21 billion. Their willingness to sacrifice their political capital for the good of the state should be widely commended. It won’t be, but it should be.
Finally, let me say that I am glad I am not there. I went through the budget problems of 1991-95 (a budget crisis created by "non-term limited" legislators, by the way) and the budget crisis of 2001-2005. In both of those cases, the crisis was created by a massive increase in spending. In both cases, the Democrats proposed raising taxes and fees. In the first case, the 1991-2005 crisis, Governor Pete Wilson listened, and negotiated a tax increase and an increase in lots of fees. California, at the time of the increases, was on the brink of a recession, just as it is today. The result of Wilson’s actions was to hasten the onslaught of the recession, and deepen it in California, by chasing thousands of jobs out of state. The other problem was that it nearly destroyed the Republican Party in California. Civil war within the party ensued, and we lost a seat in a "fair" redistricting.
It wasn’t unitl Wilson cut regulations, fees, and ultimately taxes, that the revenue to the state increased, and his own political fortunes increased. We actually had a Republican majority for a short time in the Assembly when we pursued this fiscally responsible course.
Of course, revenue did not increase faster than the state could spend it, and the second crisis occurred in the Davis administration as the Legislature spent money faster than it ever had in the history of the state. As spending increased, Republicans lost seats in the Legislature, and the budget grew more precarious. Republicans lost 11 legislative seats during this spending spree, and the spending increased so quickly that it ultimately outstripped revenue by $11 billion. In the budget crash of 2001, Democrats once again proposed tax increases, and Republicans resisted. This time, the state recovered by growing out of the spending splurge of the late 90’s, and the economy stayed on track.
On the political level, Republicans actually picked up seats in an "unfair" redistricting. When we stood against taxes and spending, people responded by voting for us. In addition, we were able to recall a sitting governor, and it seemed that Republicans were poised to finally take over the state. As spending increased, we lost our moral high ground, and our political fortune ran aground as well.
Had Governor Schwarzenegger listened to those of us in the Legislature who were advising prudence in spending after that recovery, he would not be in this posiiton. He chose to negotiate with the Democrats, and he is now paying the consequence. Negotiating with the Democrats on taxes now will ultimately destroy him and the Republican Party in California. I know he doesn’t read what I write, but these are important lessons for anyone. Some of us tried to save him from his overwhelming desire to capitulate to the Democrats, because we knew this would be the consequence of the Democrats’ spendthrift ways. As important, we also knew that, if he listened, the fortunes of our party would change as well. It is too late to fix that, but it not too late to change the course, and this time do it right.