State budget mess a comedy, or tragedy?

SACRAMENTO – As entertainment goes, the final regular-season episode of the Budget Show in the Capitol was shoddy. The actors – the Assembly members and senators – are B-rate. The speeches, despite their strained attempts to sound Kennedy-esque, were pretentious. Those of us in the audience sometimes rolled our eyes at the predictable plot. Plus, we knew the ending in advance.

The Democrats rolled out their budget, which would require about $4.4 billion in tax increases – on top of the record $12 billion-plus in tax increases that were approved last year. The Republicans presented their budget, which would eliminate the CalWORKS welfare program and cut other programs to bring the state’s spending in line with its revenue without raising taxes.
State Senate President Pro Tem Darrell Steinberg, D-Sacramento, right, along with Sen. Rod Wright, D-Inglewood, center, and Sen. Mark DeSaulnier, D-Concord, listen as Sen. Bob Huff, R-Diamond Bar, unseen, speaks against a Democratic budget plan before the Senate at the Capitol in Sacramento, Calif., Tuesday, Aug. 31, 2010. Lawmakers rejected two different versions of the state budget, one, proposed by the Democrats and the other, a Republican plan, leaving the state two months into the 2010-2011 fiscal year without a spending plan.

Of course, neither budget passed. The Democrats have the majority, but not enough of one to pass a budget, which requires a two-thirds supermajority. They knew Republicans wouldn’t OK tax hikes. The GOP knew that Democrats would not go for a budget that required significant cuts in social programs. So the legislators went through the motions – the “drill” or “D-word,” as everyone called it. Then they tried to finish up with other business (i.e., approving an anti-paparazzi bill and an Irish reunification resolution) and head back to their legislative districts.

The speech-making should have been done months ago given that we’re two months past the July 1 budget deadline. Still, observers would glean much about the problems this state faces by listening to what legislators had to say.

Republicans were straightforward. Senate Republican Leader Dennis Hollingsworth of Murrieta told his colleagues that “this is a very tough budget – but it spends what we have and no more.” In the GOP view, tough choices are necessary because revenues are down. Tax increases will chill a recovery, so it’s necessary to cut back wherever possible. They argued that a better business climate will lead to more job growth and revenue.
But Senate President Pro Tem Darrell Steinberg, D-Sacramento, set up the budget debate as a matter of fundamental “choices,” and he and his colleagues portrayed the Republicans as the type of people who want to throw children on the street to enrich corporations. California Democrats believe that the greatness of our state is based almost solely on the public sector. To Steinberg, the question is “whether we will continue to invest in the institutions that made California great” or whether the state will “disinvest.”
Sen. Mark Leno, D-San Francisco, argued that California “didn’t become the eighth largest economy by chance.” Public infrastructure forms the foundation of the private economy, he said, pointing to the state’s education system, water systems and parks. The GOP proposal, Leno said, “is a ‘starve the beast of government’ budget that dismantles all that made us great.”
Apparently there’s nothing great in this state that doesn’t flow from the government or isn’t funded by tax dollars. One never hears from Leno or his fellow Democrats any discussion about the poor performance of government agencies. One never hears calls for competition or serious reform. No matter how much money government receives, it always needs more! Has it dawned on any of them that these public institutions misuse tax dollars and provide such poor services not because of a lack of money but because they are bureaucratic and monopolistic institutions?
As Sen. Bob Huff, R-Diamond Bar, noted, Senate Democrats talk about investing in the state but what they really mean is raising taxes. They don’t seem to be living in reality. Even though Proposition 98 earmarks 40 percent of the state’s budget to education, one senator echoed the claim that “the state has abandoned our public schools.” Sen. Lois Wolk, D-Vacaville, argued that taxes don’t impede the economy but form the foundation of it.
Sen. Mark DeSaulnier, D-Walnut Creek, told stories about the suffering of government workers in these tough times. “Our public servants need more help not less,” he explained, oblivious perhaps to the massive disparity between pensions earned by state workers and the rest of us. Sen. Denise Ducheny, D-Chula Vista, claimed that the Republican budget puts the state in a “death spiral.” She said it would send 1 million children into homelessness and “leave ourselves with a whole generation of Californians on the streets, left without homes, left without food.”
Fortunately, the drill ended early in the day. The Democrats mainly wanted to dramatize the need for the passage of Proposition 25 on November’s ballot, which would eliminate the two-thirds vote requirement for them to pass budgets. They arguably hope to delay the budget until it passes. Without the supermajority protection, the Democrats would stack their budget with hidden tax hikes they would label as fees.
Prop. 25 would eliminate the supermajority vote requirement for passing budgets, but would ostensibly leave it in place for creating or raising taxes. But the Howard Jarvis Taxpayers Association fears that its passage would allow Democrats to exploit various loopholes to raise taxes.
The Jarvis folks also argued that GOP legislators would lose any influence on the budget, and Democrats would gain tremendous leverage to push ahead tax hikes. Democrats could twist Republican arms by saying, “Vote for our budget or lose this money for your district.” There’s also the fear that Prop. 25’s passage would allow Democrats to pass with a simple-majority vote trailer appropriations bills that include tax increases.
Sure, the proposition’s passage would strip Republicans of their power to block budgets and would, therefore, eliminate the annual and silly drill. But it could make it much easier for Democratic legislators to raise taxes. Given the perspective they shared Tuesday on the Senate floor, I have no doubt they would take full advantage of that new-found authority. We might laugh at Tuesday’s farce, but it’s still better than a tragedy.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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