Little Compromise by Budget Committee

John Wildermuth
Journalist and Political Commentator

At the end of Tuesday’s final session of the Budget Conference Committee, Democratic Assemblywoman Noreen Evans of Santa Rosa thanked everyone but the cooks in the Capitol cafeteria for the fine job they’d done over the nearly four weeks of hearings on ways to close the $24.3 billion hole in next year’s state budget.

The six Democrats and four Republicans on the committee worked well together, she said, even through a “lively and comprehensive debate” on budget issues.

And what did all this bonhomie accomplish? Well, by the time the committee adjourned just after 7 p.m. last night, we had learned that one, the Legislature’s Republicans aren’t going to vote for taxes to close the budget gap and two, that Democrats are going to propose them anyway.

Now that’s exactly where things stood at the start of the committee hearings, only now the state is that many weeks closer to the June 30 deadline California’s political and financial leaders have set for action on the budget and the predicted July 28 fiscal meltdown, when the state will run out of cash to pay its bills and its workers.

If the purpose of the committee hearings was to come up with a bipartisan plan that could speed through the Legislature to the governor’s desk, it didn’t happen. On issue after issue, the committee split right along party lines.

Pump up efforts to collect taxes on Internet purchases? It’s approved, 3-2 by Assembly committee members and 3-2 on the state Senate side.

Accelerated withholding on independent contractors? It’s 3-2 and 3-2. A first-ever oil extraction tax and an 87-cents-a-pack boost in the cigarette tax? Again, 3-2 all around.

That’s not to say there wasn’t some entertainment value in the hearings. For example, you could get to hear Republicans like state Sen. Robert Dutton of Rancho Cucamonga ask questions about the details of some of the revenue proposals, all the while knowing that there was no way in this lifetime he was ever going to vote for them.

Then there was Democratic state Sen. Alan Lowenthal of Long Beach, who went on at length about his concern that any new taxes could really hurt Californians and his belief that people are demanding the state live within its means. Then he voted for all the taxes and revenue hikes.

Of course there was the usual round of finger-pointing, with each side blaming the other for the state’s financial woes. It was Gov. Gray Davis and Democratic legislators, who approved too many new programs a decade ago during the dot.com boom, the GOP charged. No, argued the Democrats, it was Gov. Arnold Schwarzenegger’s cuts in the vehicle license fees that sparked the disaster.

Now that’s all good clean political fun, but it doesn’t do anything to solve the state’s budget problem. There are plenty of good reasons – or at least debatable ones — why it may make sense to boost the tax on tobacco, tax companies that take minerals from state land or return the vehicle license fee to where it stood for decades. But none of those things can happen without some GOP votes.

Without those votes, or some prospect of getting them, any discussion of tax hikes is nothing more than a chance for Democrats to make some feel-good orations to the party faithful and not any real effort to close the budget gap.

The Democrats can complain all they want about the two-thirds requirement for the budget and taxes, but until they can convince voters to change things, those remain the rules.

Democratic Senate leader Darrell Steinberg has promised to put out a budget plan today that will “reflect that ideal” of shared sacrifice, which typically translates into a list of tax hikes and revenue increases.

But, like it or not, the Democratic majority has to play the hand they’ve been dealt. And that means coming up with a compromise that can attract the GOP votes needed to pass the budget fixes, sooner rather than later.

John Wildermuth is a longtime writer on California politics.

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