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Capitol dysfunction is what makes special interests run

March 23, 2009|GEORGE SKELTON

FROM SACRAMENTO — "Sacramento is dysfunctional" has almost become a cliche. But Gov. Arnold Schwarzenegger repeated it recently and sounded profound -- more profound than he probably intended.

Speaking to the San Francisco Commonwealth Club while launching his campaign for six budget measures on the May 19 special election ballot, the governor said:

"Our state capital is a town that feeds on dysfunction. The special interests, left and right, need the process to be dysfunctional. This is how they control Sacramento. This is how they prevent change."

He's onto something, I thought, although my thinking and Schwarzenegger's on dysfunction and interests don't mesh precisely.

The governor didn't elaborate much, except to say that "the very interests, the far left and the far right, that prefer dysfunction over change have already launched a campaign to confuse the people and to defeat the [budget] reform."

He didn't call out any special interest by name. But Schwarzenegger's pattern -- the pattern of most politicians -- is to use the tag "special interest" as a synonym for "enemy." Schwarzenegger refers to allies as "partners."

Several special interests are Schwarzenegger partners, notably the state Chamber of Commerce and the California Business Roundtable.

His current enemies include Health Access California, a liberal advocacy group that detests the spending cap offered by the budget package's linchpin, Proposition 1A, and the conservative Howard Jarvis Taxpayers Assn., which staunchly opposes 1A because it would extend temporary tax increases an additional year or two. They'll be in effect for two years regardless of the 1A outcome.

Other special interests that Schwarzenegger presumably considers disciples of dysfunction are public employee unions that hate spending caps and beat back his "reform" ballot measures in 2005. He undoubtedly was referring to them in San Francisco when he denounced the interests that "force the state to spend more and more and more." Never mind that a governor can veto most spending.

Also on his blacklist of special interests are the anti-tax conservatives who oppose any tax increase. "Those are not serious people," Schwarzenegger said.

Schwarzenegger insiders say he believes that some special interests depend on dysfunction at the Capitol to justify their existence. Example: If the budget system weren't broken and liberals weren't perpetually fighting for tax increases, there wouldn't be a market for anti-tax lobbies.

There's some truth in that. And there's no question that when any entity -- political or private -- learns how to play one system and win, it resists changing the rules.

But there's much more to special interests feeding off dysfunction than Schwarzenegger mentioned.

The biggest cause of dysfunction in California's Capitolis the two-thirds majority vote needed for passage of a budget or tax increase. Very few states require that.

Business interests cling to the two-thirds vote and Schwarzenegger backs them. They argue publicly that without it, unbridled Democrats would embark on runaway taxing and spending.

But in his comment on feeding, Schwarzenegger inadvertently touched on a tactical reason many lobbyists love the two-thirds vote. They can game the dysfunction.

When a controversial bill must be passed by a 2-1 vote, basic economics come into play. Demand for votes exceeds supply and prices rise.

In Sacramento, special interests can target a wavering Republican or two and suggest that they hold out for, say, $10,000 tax credits for buyers of new homes or horse racing pork for county fairs. Those commodities -- and much more -- were traded for votes last month as budget negotiators struggled to close a $42-billion budget deficit.

David Ackerman, a highway construction lobbyist, acknowledges that he relied on the two-thirds budget vote to leverage passage of some hotly debated bills. They softened diesel emission requirements for construction equipment, exempted some highway projects from environmental hoops and -- over the opposition of Caltrans engineers -- allowed some road projects to be designed by the builders.

"These probably wouldn't have happened in a 'functional' legislature," Ackerman concedes.

Dysfunction also is a defensive tool for lobbyists to stop what their clients consider "bad" bills. That's often good.

But there are many causes and usages of dysfunction.

"We have the perfect storm here of dysfunction," says Bill Hauck, president of the Business Roundtable.

Legislative term limits are high on his and nearly everyone's list of culprits, including Schwarzenegger's.

Randele Kanouse, a lobbyist for the East Bay Municipal Utility District, says: "These are good people who come to Sacramento with passion and commitment to do the right thing. But when you're trying to make policy while on a treadmill, you don't do a great job. You're always focused on the next office you're going to run for, because you don't have a permanent job."

And because the lawmakers are constantly raising money for their next job bid, they tend to be influenced by special interest contributors. Democrats become beholden to public employee unions.

Many interests also blame showman Schwarzenegger for dysfunction. He still doesn't know how to govern, they say -- almost never for attribution.

Prop. 1A will help control spending. But it will take a lot more than that to make the Capitol once again functional.


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