GOP Finally Gets Budget Action

MARCH 26, 2011

By JOHN SEILER

There are a lot of problems with the list of budget demands Republicans proposed, such as retaining redevelopment. (The full list is here.) But at least they’re finally getting a rise out of Democrats.

To this point, the large Democratic majorities in the Legislature have been treating the small Republican minorities as if the GOP were a third party. To the demands of Gov. Brown and the Democrats in the Legislature for putting a $12 billion tax increase on a special June ballot, GOP was just supposed to go along like good comrades.

Now, the Contra Costa Times reports:

Democrats angrily rejected a long list of demands – 53 issues in all – that Republicans made Friday in budget negotiations with Gov. Jerry Brown, and are now amping up threats to go around the minority party to ensure a special election on tax extensions.

And the L.A. Times reports:

Brown spokesman Gil Duran called the list “a hodgepodge.”

In a statement, Senate minority leader Bob Dutton (R-Rancho Cucamonga) and Sen. Bob Huff (R-Diamond Bar) said the demands were to make “critical adjustments to the governor’s flawed budget.”

“Republicans were accused of being the party of ‘no’ and now Republicans are accused of being the party of ‘too much yes,’ ” they said.

We’re close to the last days, even hours, of the timeline for putting a tax increase on a special ballot in June. The critical juncture, of course, is July 1, when the remaining tax increases from Gov. Arnold Schwarzenegger’s 2009 bill expire. Until then, Democrats can claim the tax increases really are only “extensions.”

After that — after people stop paying the taxes — such a sleight of hand will be impossible.

Moreover, a big development last week was a PPIC poll showing that just 46 percent of likely California voters would support the tax increase. That’s down from 53 percent just two months ago.

Usually at this point in a potential election, a tax increase has to have at least 60 percent support, maybe 70 percent, in opinion polls. If support already is under 50 percent, then the chances of its passing are close to those of Schwarzenegger becoming president of the United States of America.

November Ballot Option

The alternative being discussed is a petition campaign to put the tax increase on the November ballot. But that means the Legislature will have to pass a budget that, at least for July-October, four months, would not include a tax increase. But it would have to include even bigger budget cuts than have been advanced so far.

And the kicker is this: After those cuts have been made, California will not have slipped into the Pacific Ocean. People will look around and say, “Hey, this isn’t so bad. We survived the cuts. There’s no point in increasing taxes.”

Sure, the cuts will produce great wailing and gnashing of teeth by those who had their tax-funded budgets cut. But with the state still in a recession, those wailings and gnashings will not much be heeded.

Yesterday, the U.S. Labor Department announced that California’s unemployment rate dropped to 12.2 percent in February from 12.4 percent in January. Any improvement is welcome. But that’s still only a slight improvement from the 12.4 average for all of 2010. We still suffer the second-worst unemployment among the states, after Nevada’s 13.5 percent. The national rate is 8.9 percent.

Nevada’s unemployment rate also is improving faster than California’s.  It dropped from 14.2 percent in January to 13.5 percent in February. That’s a 0.7 percentage-point drop compared to California’s 0.2 percentage-point drop in February.

Jobs First

These unemployment figures are crucial because Gov. Brown and the Democrats, as well as their media boosters such as tax-happy columnist George Skelton, are not focusing on jobs. But jobs are the key not only to the recovery in the private sector, but to any long-term budget solution.

That’s why the Republicans’ proposal (again, excepting some flaws), is right to insist on regulatory relief for business. Here are a couple of their ideas:

* Improved accountability by requiring retrospective review of regulations.

* CEQA (California Environmental Quality Act) reform.

* GHG (greenhouse gases) regulatory reform.

The passage of Proposition 25 last year, dropping to a majority from two-thirds the threshold for passing a budget, is proving to be a two-edged sword for Democrats. They can pass any ol’  budget they want to. But that means Republicans’ influence over the budget can only be exercised when Democrats want tax increases.

Democrats now are hollering that Republicans, so often slow on the uptake, actually figured this out.