I wonder if legislative Democrats realize how good they got it in this current budget revision deal? When you consider the fact that state government has a shortfall of over a quarter of its current fiscal year general fund budget, and that raising taxes or fees were quite literally off the table, it was looking like this would be the "day of reckoning" for the big-spending liberals that have dominated state government for so many decades. After year after year of catering to the state’s massive public employee unions — and dropping a seemingly endless supply of other people’s money into one social program after another — somehow Senate President Darrell Steinberg and Assembly Speaker Karen Bass pulled the proverbial rabbit out of the hat.
Let me say from the outset that we can thank the resolve of Governor Schwarzenegger and our Republican legislator that we do not have any tax increases in current budget deal. Clearly they were listening when taxpayers rejected the massive tax increases on the May special election ballot. The Governor also gets a lot of kudos for quickly coming out of the gate after that election with a proposal that laid out a path for a non-tax increase comprehensive solution to the budget shortfall.
All of that said, Californians get what they ask for by sending Democrat majorities to the State Legislature. Clearly the end result of the "negotiations" was that while over half of the shortfall is dealt with responsibly, with real cuts (not as many permanent cuts as are needed, but still permanent cuts in the billions). But there is no getting around the fact that this deal is filled with billions of dollars in gimmicks and borrowing that is shameful — and guarantees that by the Spring or maybe the Summer, we’ll be back at this again, dealing with a budget shortfall.
One of the challenges of the "Big 5" process is that those who sit at the table have to go back and sell the results to their caucuses. In the end, I suspect that the Republican leaders will be able to put up some votes for this deal — mainly because of the fact that tax and fee increases are not in it. But there is plenty in the deal for Republicans not to like.
The real question in my mind is whether Steinberg and Bass will be able to round up the required votes from legislative Democrats. As I have always said, there are two kinds of Democrats in the legislature. The liberal ideologues who will hate, hate, hate a budget that cuts even one penny, let alone billions from social programs (this budget would finally adopt the federal welfare standards signed into law by President Clinton in the 90’s) — and the union hacks, who will feel a lot of heat from SEIU 1000 and others because the deal includes the 14% pay (and work) reductions through furloughs through the rest of the fiscal year.
Screaming very loudly will be local governments — upset that the state is going to "raid" around $3 billion of "their" money to help close the budget cap. We’re of mixed opinion here at the FlashReport. On one hand, from a policy perspective, it probably is not a good idea — we should have deeper cuts in state spending. From a political point of view, given the fervor with which the organizations that represent local government leaders (California League of Cities, etc.) all supported the February budget deal and resulting ballot Propositions, demonstrating their willingness to smack their own local constituents with massive tax increases, we can only cry so much.
I’m told the timing from here is that for the next day or so, the legislative leaders will work to try to "sell" this plan to their caucuses — then the details will be made public (elite first, then the people), and a vote (if the votes can be obtained) will take place later in the week.
Given what a mixed bag this budget fix happens to be, I am of mixed opinion here about how people should vote on it. On one hand, the ability to get a lot (not enough) permanent cuts and welfare reforms is a tempting reason to vote yes. On the other hand, a yes vote also is a vote for "kicking the can" (we haven’t detailed the gimmicks yet, but they aren’t pretty) and settling for a deal that doesn’t solve the problem…
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