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CAPITOL JOURNAL

One Brown Moving On, One Moving In

May 13, 1993|GEORGE SKELTON

SACRAMENTO — This is the time of year when real players in the state Capitol begin to make their move--to jockey into better position, to defend ground or dash for a goal.

It is the start of budget season, which affects all Californians' pocketbooks and their government services. In the Capitol, however, it mostly affects people's political careers.

Gov. Pete Wilson is a prime example. His plunge in public popularity can be traced to his fumbling of the state budget--too quick to tax one year, too unyielding the next, resulting in summer gridlock and embarrassing IOUs.

So last week, Wilson made a strategic move. He reversed field and signaled his willingness to consider "two-year budgeting," a euphemism for deficit spending, but not necessarily "Washington-style" deficit spending. The governor's agile move was designed to place him in position to avoid another budget gridlock while strengthening his stance against extending a temporary half-cent sales tax increase scheduled to expire June 30.

Of course, nobody makes better moves than Assembly Speaker Willie Brown, the San Francisco Democrat Republicans love to hate most. His image always has been "tax and spend" liberal--anti-business--and the gremlin of gridlock. But Brown is facing term limits and thinking legacy.

So the Speaker has teamed with Assembly GOP Leader Jim Brulte to push for reform of the workers' compensation system and is carrying a bill sponsored by the California Manufacturers Assn. to exempt manufacturing equipment from the sales tax. These and other moves in the name of economic growth are aimed at placing Brown in the position of bipartisan conciliator and achiever.

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And if one looked carefully Wednesday amid all the Capitol commotion--the governor and legislative leaders huddling for the first time this year, the Assembly Ways and Means Committee creating painful budget scenarios, local government lobbyists scrambling to minimize the damage--another Brown could be seen making her move.

State Treasurer Kathleen Brown was the center of attention--perused by the media, investment officers, Capitol staffers--in a 19th-Century hearing room as she chaired an obscure entity called the California Debt Advisory Commission. The subject was highly complex, but Brown tried to simplify it with everyday language, pointers and charts.

Her message:

"California is out of cash. The state's wallet is empty. And all we have left is our plastic. . . . Our 'Visa card' has now been charged to the max. We have no way of paying it off. So when the bill comes due, we will be forced to pay off plastic with more plastic--our 'MasterCard.'

"And it gets worse. Because we've now gone through all our cash and all our plastic, the (bond) rating agencies have asked for extra assurance. It's like having your parents co-sign for a loan. . . . It's no way to run a state. . . . California is becoming hooked on borrowing. We're creating more and more debt without a plan for paying it off.

"There is widespread denial. For too many years, California's fiscal decision-makers have pretended they weren't rolling deficits. They pretended that we've avoided going down the slippery slope of deficit financing like New York. The truth is, we've already slipped. And unless we stop, we'll find ourselves in free-fall. . . .

"Average Californians need to know that 10 cents of every budget dollar is going to fund this rolling deficit instead of programs like education and keeping cops on the streets."

Brown also included a smattering of governmentese--explaining about "Visa" being revenue anticipation notes, etc.--that I have trimmed to further simplify her point.

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My point is her move: She's trying to outflank the governor on his issue, deficit spending. Wilson has been using red ink since taking office, she says; he just won't admit it "and it galls me." Brown is positioning herself to fight off Wilson's certain "tax and spend" attack when she runs for governor next year.

And she is making another move: attempting to insulate herself from her opponents' charge that she is charming but shallow, a pretty face lacking in specific solutions.

So Brown is offering specifics:

* Extend the temporary sales tax hike long enough--two to three years--to pay off the rolling deficit of roughly $4 billion, by her calculation.

* Balance the rest of the budget in 12 months and forget the "two-year budget" concept. That could mean cutting spending or raising taxes to net $6 billion, probably through automatic "triggers" controlled by cash flow.

Kathleen Brown has become a Capitol player.

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