7-20-07 Why The State Budget is Late

Volume 20 For Publication Date: July 20, 2007 No. 16

Why The State Budget is Late
A Commentary and Analysis

In past years, numerous California State Budgets have been delayed based upon issue conflicts—abortion, tax reduction, Proposition 98 allocations and payments, or welfare roll-backs, to name just a few.

But the 1997-98 State Budget is delayed as much by the nature of the Sacramento political decision-making process as any specific issue. In 1997—unlike last year—there are no battle lines drawn, no strong identified philosophical conflict, no open political warfare—just, instead, the lack of any anxiousness or leadership that can force an on-time Budget compromise.

One would expect that the 1997-98 Budget is an easy one to conclude. Revenues are up by an unexpected and enormous increase, welfare reform is in large part prescribed by decisions already made at the federal level, public education is riding a crest of public popularity and is entitled to 98% of all new May revise revenue, and even county government may begin to see some kind of relief from state allocations. Why, then, if this is an easy year, are we not hailing an unprecedented early Budget?

No Urgency. The Capitol community, at the moment at least, shows no urgency regarding the adoption of an on-time State Budget. The legislative recess is not calendared until the 18^th of July—a recess one week later than usual; the Governor is not demanding that the Budget be delivered in accordance with constitutional deadlines, there is no anticipated withholding of state employee paychecks (previously ruled unconstitutional), nor is there any fiscal calamity that has been predicted by the State Controller as was repeatedly opined by former Controller Gray Davis. In fact, it is as if no one realizes that the new fiscal year starts next Tuesday. Until someone screams—the press, the citizenry, or legislative families anxious about planned vacations—Sacramento will languish.

Diffused Leadership. The Speaker of the Assembly for the last three decades has always had a commanding capability to leverage or decide major issues of the Capitol building. Whether the incumbent was Jesse Unruh, Bob Moretti, Leo McCarthy, Willie Brown, or even Bob Monigan (the Republican speaker of the late 60s), the Office of the Speaker had a commanding role in both houses of the Legislature to decide controversial issues of the moment. For some of those leaders—especially Unruh, Moretti, and Brown—an almost sixth sense of the political tone gave them the ability to forge or force compromise.

Today’s Speaker has no intrinsic specialized power. Speaker Cruz Bustamante is term limited to another 18 months and his leadership is constantly challenged in his own party by those who see themselves as being tomorrow’s Speaker. His home-base of the Central Valley is not a megalopolis political center, and thus he has no commanding role to lead large caucuses of either the Los Angeles or Bay Area basins. Speaker Bustamante’s personal participation will never have the same flamboyance or oratorical skill of Willie Brown, and, to cap things off, the authority of the Speaker today is more limited by the rules of the house—a carryover from the days of momentary leadership by Assembly Republicans.

At the same time, the Senate has not filled the vacuum that has been created by the declining influence of the Speaker. The Senate, never as flamboyant or as cantankerous as the State Assembly, continues to maintain a studied decorum and, more or less, a hands-off attitude toward the Assembly. The net result: the legislative branch does not have a single leader.

Term Limits. Although term limits is often used as the scapegoat for everything bad happening in the Capitol, it cannot be overemphasized in any analysis of State Budget processes. The lack of institutional memory is nowhere more evident than in State Budget debates. The days of legislative experts to whom other legislators will defer in areas such as water, environment, transportation, medical care, or mental hygiene are all gone, and, as a consequence, each of those issues can jump to being a major State Budget conflict rather than being determined by a single or few influential leaders.

Big 5 Relationships. The “Big 5”—the Governor and two leaders from each house—have traditionally been called upon to debate and conclude the “big ticket” items. In 1997, however, the Big 5 have been unable to even meet for extended Budget discussions and are mired in a debate over the “shape of the table.” Consequently, there is no forum for the final big compromises that are essential in $60 billion budgets. Although it is hoped that there are lots of backroom discussions continuing, there is no evidence that they include the top leaders of the state.

Interdependency of Issues. This year’s budget is especially difficult because of the interdependency of so many issues. Revenue and population estimates impact upon Proposition 98 allocations, which in turn determine total dollar allocations available for welfare reform, which in turn determine allocations available for county government, and then in turn determine dollars for public education. Population estimates—a seemingly simple statistical measurement—today have billions of dollars worth of impact upon state government because of the calculations of Proposition 98 and, thus, on the delicately balanced non-Proposition 98 side of the Budget.

The list of topics that are the key topics to Budget resolution—welfare reform and redesign, county bailout, Bay Bridge earthquake reconstruction, income tax reduction, the Central Valley University of California campus—all are important, but no one issue of the Budget can be determined in isolation from the others. Consequently, it takes a very accomplished leader to weave a State Budget into one neat package capable of obtaining 54 votes in the Assembly, 27 in the Senate, plus signature of the Governor. That interdependency seems especially significant in 1997, and when there is no clear leader to pull it all together, the Budget languishes.

Thus, it is likely that next Tuesday, June 30, will pass with barely a whimper of criticism for not adopting a Budget on time. The next focus date—after the 30^th—for possible resolution is the 4^th of July, since legislators need to return to their districts for perennial campaign parades and photo opportunities. If it is not solved by that Friday, the pressure doesn’t build again until
July 18, when the Legislature has a calendared recess and families have planned vacations. It is always perceived that the Capitol building is mostly influenced, at this time of the year, by family decisions much more than State Budget debates.

Democracy is a process of compromise, demanding that several parties give a little for the common good and collective judgment of all of the parties. Unfortunately, it is seemingly that process of compromise that California doesn’t put to work until some type of intractable deadline looms. Unfortunately, this year, intractable deadlines are hard to find.

—Ken Hall