Is the Budget Kabuki Dance Ending?

MARCH 31, 2011

By KATY GRIMES

The budget dance between the Republican legislators and Democratic Gov. Jerry Brown appears to have ended. The auditorium lights have been turned back on, the band is packing up but everyone is still awkwardly lingering on the dance floor looking around hoping that someone else makes a move.

California’s budget dance — often called the budget “Kabuki dance” — has been full of drama, but short on results. And it took an untraditional, unusually short period of time.

Gov. Jerry Brown, only sworn in on January 3, wanted his budget approved by March 10. And it was apparent that he thought he could easily pick off at least two Republicans in each house of the Legislature to vote with him and accomplish his accelerated, magical mystery budget.

But Republicans resisted Brown’s request for a slow dance and, instead, tried to talk turkey with a growing list of specific reforms necessary to achieve a successful homecoming for California.

Apparently those two Republican votes in each house were not as easily achieved as Brown thought.

The traditional budget negotiation process usually takes six to nine months to accomplish and involves months of talks, planning and meetings with leadership from both parties. This year the newly-elected Brown tried to do the same in less than 90 days — leading many to believe that he shoots from the hip just to see where the bullet lands.

Since the last budget took nine months to plan and execute, why Brown thought he could accomplish massive cuts and tax increases in less than 90 days is what leads to the questions surrounding this governor, and who and what is driving this accelerated plan: Is it confidence or hubris, payback, or recompense?

No Budget Process

Several Capitol insiders, who asked not to be named, say that Brown “has no process.” They also are critical that there are no Brown staff budget experts in the meetings to explain and analyze the “wonkish” budget details about issues such as spending cap and complicated pension reform — issues that only budget finance experts can answer.

And dispelling the myth that Republicans’ latest budget negotiation list was 53 items long, one Capitol staff member said that the list was not that long. He explained that the primary items — pension reform, a spending cap and regulatory reform — had many items broken out and listed under them. Pension reform has 20 different things listed under it, and the spending cap includes many different provisions.

Instead, the governor said in a letter to Republican Senate Leader Bob Dutton, “So I was very surprised (and frankly, disappointed) that you came today with a very long list of demands (53 separate proposals), many of which are new and have no relationship whatsoever to the budget.” And Brown accused Dutton of undermining the entire budget proposal “by undoing major elements and extending the taxes for only 18 months.”

While the Republicans have been getting negative press for this falsely labeled “lengthy” list of demands, they say that the demands were always the same surrounding reform. One Capitol budget expert insider said that the Democrats had 250 different changes in Brown’s budget, and even gutted many of the proposed cuts.

Yet with Brown considering ways to get the tax extensions on the ballot by even gathering signatures for a November ballot initiative makes the issue no longer about “tax extensions.” Instead they become “tax increases,” as the 2009 taxes expire July 1. And while Brown is on record saying that he is not sure about using the majority-vote process because the California Constitution requires a two-thirds majority, other Democrats don’t seem as concerned.

Brown does not need to call an election to approve higher taxes; he can do so with a two-thirds vote of the Legislature. But that requires the extra Republican votes. And, he promised voters last year he would seek Republicans’ input before seeking more taxes.

But that didn’t really happen.

With Democrats claiming that Republicans have been “running out the clock,” Brown ended negotiations with Republicans this week and instead complained about the refusal to put his tax increases on the ballot and the evolving list of demands.

Compromise Shunned

But several Republicans say they were willing to compromise and negotiate, even though there are a couple of issues they never would agree to put on the ballot: Single-sales factor, the five-year tax extension increase (18 months may have been negotiated) and enterprise zones.

Republicans continue to insist that the issues remain pension reform, a spending cap on state government and job creation.

The state’s unions are pushing hard to get the tax extensions on the June ballot, because a November election facing “tax increases” just doesn’t sound as palatable to voters as “tax extensions.” Almost daily, there is a rally at the Capitol sponsored by a different union — or by kids and teachers, or home health workers, or the disabled — lobbying legislators to not make the cuts.

But no one is lobbying in rally form against the tax extensions or increases.

Said chairman of the California Republican Party, Tom Del Beccaro, recently in a statement:

Governor Brown and the Dems can’t have it both ways. They asked for ideas — and then complained there were too many. They wanted specific budget solutions — and then complained there were too many details. They shout ‘Let the people vote’ — and then refuse to let the people vote on measures that will create jobs and bring permanent reforms to California government.

The budget insiders said that Republicans were willing to negotiate even on the length of time of the tax extensions, if real pension reform was on the table, but that five years of the 2009 tax extension was never an option.

Instead, despite the list of reform demands and Republican requests, Gov. Brown and the Democrats in the Legislature did not change one thing in the budget, and ignored Republican input. Many feel that Democrats even went back on deals struck verbally, such as adding $500 million in new borrowing and the massive fund shifts.

The other smaller policy issues in the Republicans’ demands apparently were never deal breakers. Budget experts said that those are always in the annual state budgets.

It was the Democrats who kept saying “no,” said the budget experts, and it was done with the frequent reminders of, “We won!”

Brown ended the negotiations without appearing to know what to do next.

And now Democrats could get something worse on a November ballot if they don’t get some pension reform, job creations and small business regulatory relief.

The question now facing Brown and the Democrats at the end of the dance is: What happens to them if they try to push through the budget they want on a simple majority vote, without Republican complicity?