CA budget talks stall
by Matthew S. Bajko
Time may be running out for state lawmakers to reach a deal on resolving California's budget crisis. Republicans remain absolute in their opposition to Governor Jerry Brown's proposal to extend a number of taxes set to expire this year.
At stake is $14 billion in revenues. Brown had wanted to call a special election in June to let voters decide on if they should continue paying the taxes.
But Brown has been unable to find two GOP members in each house of the Legislature needed to vote on his budget proposal. Frustrated by the Republicans' unwillingness to budge, Brown this week had floated bypassing the legislators and putting the tax extension on the November ballot.
His spokesman later backtracked on the idea, and talk has now turned to the possibility that state lawmakers will have to make cuts totaling more than $26 billion to balance the 2011-2012 budget. Lawmakers last week passed $7.4 billion in cuts to various programs; they remain deadlocked on the remaining $4 billion, which would come from a change in corporate taxes and eliminating redevelopment agencies and enterprise zones.
Despite the seemingly dead-end the legislators and the governor appear to find themselves in, openly gay state Senator Mark Leno (D-San Francisco), chair of the Senate Budget Committee, remains hopeful a compromise can be reached.
"I have always been hopeful and believe that a sufficient number of Republicans will do the right and necessary thing. I still have to hold on to that belief," Leno told the Bay Area Reporter during a wide-ranging 70-minute interview Friday, March 18 at his office on the top floor of the state building near the Civic Center. "I am optimistic. I have to be."
Leno, however, said he was unsure which Republicans could be persuaded to break the stalemate. Nor would he venture to guess how soon a deal could be reached.
"I can't tell you who or when and time is running out," said Leno, who was appointed budget chair this session.
Illustrating the acrimony around the budget talks, Leno started off the interview by expressing disbelief with his Republican counterparts over their position to oppose the tax extension measure. He noted that a majority of Californians – 61 percent according to the latest Field Poll – would support extending the taxes to help resolve the budget deficit.
And he pointed to the Field Poll finding that among Republicans, 56 percent support calling the special election.
"Ronald Reagan, as you know, raised taxes by a much greater percentage of the general fund than Jerry Brown is proposing," said Leno, who pointed to the former governor's own words in warning Republicans their anti-tax stance was detrimental to the party.
"He said, 'We cannot offer voters a narrow sectarian party in which all must swear allegiance to prescribed commandments. Such a party can be highly disciplined but cannot win elections. This kind of party soon disappears in a blaze of defeat,'" said Leno quoting from Reagan's speech. "It is prophetic; that is actually what they are doing to themselves."
Leno lambasted the pledge put forth by state Senator Tony Strickland (R-Thousand Oaks), by which Republicans would only vote for any tax ballot measures unless there were to be an equal number of cuts to the budget.
"In this case, he is proposing a tax cut equal or larger to the $12 billion tax extension. It would make our budget problem a $39 billion problem," said Leno. "Thirty-nine billion in cuts. They are really out of their minds."
As it is Democrats pushed forward many painful cuts, from reduced spending for state parks, state universities, childcare, and adult daycare programs.
"We did soften some of the harder edges of the budget the governor proposed," said Leno.
One proposal the Legislature blocked was requiring co-pays in the state's AIDS Drug Assistance Program known as ADAP. The governor had wanted to raise $17 million for ADAP by requiring co-pays on participants.
Instead, Leno said legislators realized the same amount in savings by making changes to the state's pharmacy benefit manager contract and increased federal funding under Ryan White.
"ADAP wasn't going to work and we told him so. We found money to prevent that from happening. There will be no co-pays," said Leno. "The total ADAP budget will grow in the 2011-12 budget year due to increases of drug costs and caseload."
As painful as it has been to make cuts in various social programs Democrats have long championed, Leno said there is no alternative. Due to the economic downturn, projected revenues for the state in the 2011-2012 budget are down from $125 billion to $85 billion.
"A full third of our revenue has just evaporated as a result of the international fiscal crisis," said Leno. "When a third of your revenue disappears there is going to be serious contraction."
He argued that the budget is 18 percent smaller than the budget was three years ago and 24 percent smaller than five years ago.
"That is a quarter of the budget, yet my Republican colleagues say these aren't real cuts or aren't deep enough. But if you ask them where to cut they don't have an alternative," said Leno.
Leno lamented that when voters adopted Proposition 25 in November, which lowered the threshold for passing a budget in the statehouse from a two-thirds majority vote to a simple majority, that the measure didn't do the same for putting a measure on the ballot.
"We, collectively, I believe missed an opportunity," by not adding that language, said Leno. "We can't have 30 percent of state lawmakers dictating to the rest of the 70 percent."
It remains to be seen if a compromise can be reached where the tax extensions do get put on the ballot.
"We really do need a few Republican votes. This is an ongoing serious governance problem," said Leno.
Brown's handling of the budget talks so far did win praise from Leno, who experienced years of drawn out budget battles under former GOP Governor Arnold Schwarzenegger.
"It is the difference between night and day. We have a governor fully engaged with the intellectual depth and experience and commitment to dealing with the budget crisis honestly," said Leno. "Brown in his inaugural address said he is, 'not here to delay or deny. I am here to get the job done as unpleasant as it is.' We have got to get this behind us."