STATE OF THE STATE
by Howard Fine
In typical years, December is “get acquainted” month for freshmen legislators in Sacramento.
Not this year. Gov. Gray Davis has called a special session for Dec. 9 to deal with the state’s ballooning budget crisis. Legislators barely have one week after being sworn in to come to grips with a 2003-04 budget deficit in excess of $21 billion. They will be called upon to make some of the toughest decisions they’ll ever have to make as legislators within weeks of taking office.
“We’re going into the belly of the beast,” incoming Assemblyman Ron Calderon, D-Montebello said.
Calling the special session didn’t catch freshmen legislators totally off guard, since the budget crisis has been brewing for months. And legislators have had some briefings in the nuts and bolts of legislative procedures and the budget situation.
But the magnitude of the crisis has taken them by surprise. At the time of the March primary, when most legislators won their toughest election battles, the 2003-04 budget deficit was pegged at about $6 billion. After the current budget was passed on Labor Day weekend, that rose to $10 billion.
But three weeks ago, legislative analyst Elizabeth Hill warned that the deficit would be $21 billion. Two weeks ago, Davis said it would likely be “in excess of $21 billion.” Last week, word was circulating Sacramento that the figure might actually be closer to $30 billion.
Republicans say they intend to hold the line against tax increases, and with the pickup of two seats in the Assembly, they are in a better position to make that stand stick. Meanwhile, Democrats say the problem can’t be solved with cuts alone and that some tax increases are necessary. Unless some members give, the special session could devolve into a long standoff.
“I’ve been encouraged by conversations I’ve had with some freshman Republicans, but it’s going to be tough when push comes to shove on the Assembly floor,” said Lloyd Levine, D-Van Nuys, who is set to replace former Assembly Speaker Robert Hertzberg.
Sales Tax Initiative?
As state lawmakers grapple with the exploding budget deficit, there’s no question that deep spending cuts are in the offing.
Fearful of a repeat of 1992-93, when the state “redistributed” $3 billion from local governments to balance its own books, some of these governments are now seeking more power to raise revenues on their own.
A coalition of counties is preparing legislation to place on the next statewide ballot in 2004 an initiative to lower the approval threshold for local sales taxes from the current two-thirds to either a simple majority or 55%. And Senate President John Burton, D-San Francisco, has promised to carry that legislation.
Supporters point to voter approval of a similar initiative in 1998 to lower the approval threshold of local school bonds from two-thirds to 55%. Since then, a much higher percentage of school bonds has passed, pumping billions of dollars more into local school construction. Now they want to do the same thing for local sales taxes, which are primarily used to fund transportation infrastructure.
But getting the two-thirds approval from state legislators to place this proposal on the ballot may have just gotten tougher. That’s because Republicans, who picked up two Assembly seats last month, have pledged to hold the line against new taxes.
But the need for dollars in Sacramento is so great that the Republicans might fold on this one.
“This is really about reducing the state’s share of transportation funding,” said Rod Kiewiet, professor of political science at the California Institute of Technology in Pasadena. “They are just dying for money and this gives them a way out to keep more money up there.”
Fine is a staff writer at the Los Angeles Business Journal.
