Shortly after taking office, Gov. Jerry Brown proposed spending cuts and tax hikes to close the state's $25.4-billion budget gap without pushing the problem into the future, as Sacramento had become accustomed to doing. Unable to find common ground with Republicans on taxes, however, Democratic lawmakers approved a package of budget bills Wednesday that falls well short of Brown's standard. The governor should delay signing the measures in the hope that the ugly gimmicks and short-term fixes in the bills will prompt lawmakers from both parties to strike a deal on a more realistic budget that solves more of the state's long-term fiscal problems.
Gimmicks aside, the Legislature deserves credit for passing a budget by the statutory June 15 deadline for only the second time in 25 years. The accomplishment is testament in part to Proposition 25, the 2010 ballot measure that lets lawmakers approve a budget (but not a tax increase) by a simple majority vote, and docks their pay if they don't pass one on time. It also reflects the push by Brown to enact a budget deal by March, which would have enabled a ballot measure in June on whether to extend four tax increases due to expire by July 1.
That early work on the budget raised the possibility of a grand bargain: Democrats would accept deep cuts in social programs, limits on future spending and public employee pensions, and business-friendly reforms in the regulatory system in exchange for Republicans agreeing to let the ballot measure go to voters. The bargain didn't materialize, even though the Legislature approved more than $10 billion in cuts in March. Talks fizzled again in June, when Republicans balked at continuing three of the tax increases until a ballot measure could be voted on in the fall.
The March spending cuts and an unexpected surge in revenue narrowed the remaining budget gap to about $10 billion. Now, Democrats have closed it largely by resorting to the sort of budgetary legerdemain that has become familiar in Sacramento, penciling in a speculative influx of federal dollars, shifting money in ways that are almost certain to be overturned by the courts, disguising tax increases as "fees" and deferring billions of dollars of mandatory aid to schools.
As unwelcome as those maneuvers are, they're less damaging than making even more cuts in public education and the already frayed safety net. But lawmakers can do better, and the grand bargain is still within reach. If Republicans really do want the limits on spending, pensions and state regulatory power that they've proposed, they should be willing to support a limited tax hike until voters can decide on a long-term extension. Otherwise, both the reforms and the long-term budget fix will fall by the wayside.