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Election 2002 | NEWS ANALYSIS

Davis Is Facing Tough Problems on His Own

With few allies in the Legislature, he will immediately encounter difficult choices on the budget -- raise taxes or cut programs.

November 06, 2002|Michael Finnegan | Times Staff Writer

After an election in which voters voiced deep dissatisfaction with his leadership, Gov. Gray Davis enters his second term with neither strong public support nor a well-defined mandate.

Many of those who cast ballots on Tuesday did so despite reservations about his job performance. Davis also campaigned without much of a platform, focusing instead on tearing down his Republican challenger, Bill Simon Jr.

Now, having governed for the last four years without many allies in the Legislature, Davis enters his second term facing tough problems without strong supporters.

"The minute he's sworn in, he's a lame-duck, term-limited incumbent, and it's going to be -- to some degree -- more difficult to hold people in line," said Garry South, the governor's top political strategist.

The most immediate trouble for Davis is the state's fiscal mess -- a looming budget shortfall that most experts predict will easily top $10 billion. He will soon be forced to choose between raising taxes and cutting billions of dollars in spending, much of it on popular programs.

Davis is certain to face fierce resistance in the Legislature, both from Republicans who refuse to raise taxes and Democrats who oppose program cuts.

But the battle over state money is only the most visible of the difficulties the centrist governor can expect in working with a polarized Legislature that became even more so Tuesday.

"I don't think the second term is going to be a bed of roses," South said.

Davis leads a state with substandard public schools, overcrowded freeways and uncertain water supplies. California also continues to feel the aftereffects of the energy crisis.

In his campaign for reelection, Davis offered little in the way of an agenda that he can now press in his second term. To win, he attacked Simon with television ads depicting the Republican as an untrustworthy and incompetent businessman.

In spots promoting himself, Davis looked backward, not forward, boasting of higher school test scores, more health coverage for children and other first-term advances. It was only at the end of the race that Davis ran an ad promising to pursue more of the same in his second term.

"I don't know that we've even had a clear message from him on what he wants to do for the next four years, other than continuing the things he's done so far," said Larry N. Gerston, a political science professor at San Jose State.

But for any programs that cost money -- among them the health insurance for kids -- Davis is hamstrung by the state's dismal fiscal outlook. This year, it was only after a two-month political stalemate that Davis and the Legislature cobbled together a plan to close a record budget gap of nearly $24 billion.

Next year could be worse. For now, the state's estimated revenue shortfall is more than $10 billion, but analysts expect it to grow. A projected economic turnaround has not occurred. And the fiscal tricks used last year to balance the books -- spending postponement, fund transfers and the like -- now are just about exhausted, making a tax hike or big spending cuts all but inevitable.

Tuesday's results were likely only to further hobble Davis as he confronts that issue. A ballot initiative to expand before- and after-school programs -- at a cost of up to $550 million a year -- was leading in early returns and could further constrain the state's options for balancing the budget.

Over the course of the campaign, Davis refused to say how he would resolve the crisis.

Gerston said the outcome was inevitable: "He's going to preside over the largest tax increase in recent memory. This has to be the worst-kept secret in the world."

But Republicans resisted the tax hike ultimately enacted this year and have no incentive to be less steadfast next year.

Democrats retain solid majorities in both houses of the Legislature, but the budget requires a two-thirds vote, so a handful of Republicans must consent to any tax hike.

"Republicans are not going to sit still for a tax increase," said Sherry Bebitch Jeffe, a political science professor at USC. "They don't have to."

Pressure for a tax hike will come not just from Democrats, but also from organized labor, a major supporter of the governor's reelection effort. Art Pulaski, executive secretary treasurer of the California Labor Federation, said unions will seek a tax hike on the rich to avoid cuts elsewhere.

"You can't cut any more," Pulaski said. Advocating that view will be a strengthened caucus of liberal Democrats dominating both houses of the Legislature.

In several districts around the state, liberal Democrats and conservative Republicans defeated moderate opponents in the March primary, then went on to win the election Tuesday.

The deepening polarization of the Legislature is the result in part of a redistricting plan -- approved by representatives of both parties -- that created more solidly partisan districts, making it possible for more ideological candidates to prevail.

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