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State Crisis Will Test Finance Chief's Theory

Steve Peace has written that a budget emergency would be a great chance to reform government.

December 22, 2002|Nancy Vogel | Times Staff Writer

SACRAMENTO — Ten years ago, Steve Peace wrote in a newspaper opinion piece that a budget crisis is a great opportunity to reform government.

At the time, California's budget "crisis" was a $3.3-billion deficit on a $42-billion spending plan. Peace, an assemblyman from Chula Vista, found it a good excuse to propose that the state wipe out useless commissions, discipline an out-of-control bureaucracy and "focus on the needs of the future, not the habits of the past."

Today, California's budget is so far out of whack that it makes the 1992 deficit look like spare change. And Peace -- having just walked away from 20 years in the Legislature with a reputation as energetic, caustic and sometimes too smart for his own good -- now has another chance to test his theory that a budget crisis should breed better government.

On Wednesday, Gov. Gray Davis named Peace director of the Department of Finance.

The appointment won high marks from Peace's colleagues in the Legislature, who describe him as incredibly intelligent and hard-working, capable of mastering the intricacies of the most complicated issues. But they also know him as annoyingly long-winded and cocky; a fellow senator once described him as the little brother you don't know whether to hit or hug. His appointment as finance director could prove to be a brilliant or disastrous move for Davis.

Whether it's locking up criminals, buying milk for poor children or widening highways, government decisions invariably come down to money, and the Finance Department's role in advising the governor is central to the debate.

Thanks in large part to losses in the stock market that depressed tax collections, the governor says he and the Legislature must pare spending or raise taxes to cover a $10-billion hole in the current budget and a $25-billion shortfall in the fiscal year beginning July 1.

Leading the Department of Finance when a yawning budget gap has swallowed nearly every other government priority is not what Peace, 49, had in mind when term limits forced him from the Legislature this year.

At his August farewell on the Senate floor, Peace said, "I will follow Mrs. Peace's admonition. She says I can do whatever I want next, as long as the media's not interested in it and it requires me to be out of town periodically."

'Killer Tomatoes'

Peace said he had planned to invest more time with his family, get back into the movie industry and maybe earn a law degree. Now the father of three college-age sons, he produced, wrote and starred in the B-movie classic "Attack of the Killer Tomatoes" when he was a college student himself. He recently sold his share of a San Diego video production company called Four Square Productions.

A graduate of UC San Diego who married a cheerleader from his 11th-grade class, Peace credits his stepfather, Gordon Browning, with inspiring his interest in politics. A Navy dentist, Browning was campaign chairman for then-state Sen. Wadie Deddeh, a Democrat from Chula Vista.

Peace worked for Deddeh and former Democratic Assemblyman Larry Kapiloff of San Diego before running for the Assembly himself at age 29.

"In retrospect, I would not vote for me," said Peace, an opponent of term limits for legislators. "I was too young."

Three years into his Assembly stint, Peace got into a Capitol hallway argument with a senior senator. Witnesses say Peace called Sen. Alfred Alquist (D-San Jose) "a senile old pedophile." Peace claims he actually called Alquist "a pitiful little creature."

He still has a reputation for attacking legislative witnesses. Last year, at a news conference, he told an American Heart Assn. official: "You're so dumb. You can't fix dumb."

He's quick to recount the history of an issue and all of its permutations.

"Ask me what time it is and I'll tell you how to build a clock" is how he once described himself, quoting a sign his schoolteacher mother kept on her desk.

A moderate Democrat who is as wary of the excesses of Democrats as of Republicans, Peace was a member of the "Gang of Five," a group of Democratic lawmakers who teamed with Republicans to try to oust powerful Assembly Speaker Willie Brown in 1988. They failed, and Brown retaliated by stripping them of good committee assignments and prime office space.

Peace eventually worked his way back into Brown's good graces, and won election to the Senate, where he worked on what would become California's disastrous deregulation plan. That experience left him ready to leave Sacramento when he reached the end of his term this year.

Instead, Peace will resume the weekly airplane commute between San Diego and Sacramento.

"What convinced me to take the job," he said, "was that the governor is committed to permanent, structural reform."

In interviews before he agreed to become finance director, Peace described how he believes California can avoid the wild gyrations of the past decade, in which state revenues have gone from bust to boom to bust.

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