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Personality Politics Snag the Budget

Davis and Burton pursue their spat as deadline nears.

June 28, 2002|BILL WHALEN | Bill Whalen, a research fellow at Hoover Institution at Stanford, worked on Richard Riordan's gubernatorial exploratory committee in 2001 and was a speechwriter for Gov. Pete Wilson.

California will greet July and the dawn of a new fiscal year without a state budget. Just when that new spending plan might be completed is anyone's guess: Independence Day? Bastille Day? Certainly, we hope, before Labor Day.

So what's keeping lawmakers from completing what voters hired them to do? It's less the usual rift between Republicans and Democrats than a deeper divide between the two most powerful Democrats in Sacramento--Gov. Gray Davis and Senate President Pro Tem John Burton. Unless one of them budges, neither does the budget. Thus California begins down the slippery slope of a decade ago, when a prolonged stalemate meant the interruption of health and nursing home services for elderly and disabled Californians.

Burton and Davis are political opposites--Burton a steadfast old-guard liberal and Davis a triangulating "New Democrat" moderate. Any chance that the two could get along as power brokers ended six months into the Davis administration when the governor remarked that the Legislature existed "to implement my vision." Burton returned the slight by skipping the governor's State of the State address, later telling reporters the big speech "had no relevance to reality in the budget." Now, they disagree just as deeply about how to deal with the deficit.

Burton wants to raise the state's top income tax rate. Under his proposal, the top rate of 9.3% would jump to 10% for single filers earning more than $130,000; 11% if their income exceeded $260,000. For couples, the 10% rate would kick in at $260,000; 11% when income exceeded $520,000. Davis, unlike Burton, is up for reelection this fall. So instead the governor prefers to raise taxes on vehicle owners and tobacco users.

The irony is that, if they had a different relationship, Burton could be seen as doing Davis a favor. No California governor has raised taxes so close to a gubernatorial election in which he was running. But Burton's insistence offers Davis some cover. The governor could also cite historical precedent: Ronald Reagan twice raised taxes when faced with a budget meltdown, in 1967 and 1971; Pete Wilson did it once, in 1991. And should Republican gubernatorial hopeful Bill Simon Jr. chime in, Davis could remind voters that Simon has never released his tax returns, so who is he to pontificate about tax burdens? Perhaps Davis really means it when he says it's "hands off" income tax rates. But parse the governor's modest protests against raising the upper tax brackets: "I don't think that makes sense. I think we're unduly dependent on higher-income earners as it is." Noticeably absent is a phrase like "over my dead body."

Here's my hunch: Davis understands the dynamics of California's budget process. He'll agree to increasing income taxes, but only when the moment is right--and that's not for two weeks or so.

Once the July 1 deadline for the new budget passes, pressure for a fix begins to grow, and it worsens as the impasse lengthens. Interest groups will descend upon lawmakers and perhaps even stage protests. The media will vividly depict the hardship imposed on local government because Sacramento doesn't have its act together. Enter Davis, riding to the rescue, saying he reluctantly has agreed to raise income taxes for the public's good.

Granted, it's not exactly making a silk purse out of a sow's ear, but it avoids a long, hot summer stuck in Sacramento and, better yet, keeps Davis from being stuck in long budget negotiations with his foe, Burton. Then the dust will settle and the two can get back to their Cold War over who's the king under the Capitol Dome.

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