Dems in the California State Legislature Play Hardball

Legislative Democrats back Republicans into a corner in the fight to extend temporary tax increases and resolve the state’s budget morass.

Well it’s about time.  Democrats have traditionally been accused of being soft and easy to push around, particularly by partisan Republicans who have mastered the art of bullying and misleading their way to getting what they want, whether that be on tax policy or social issues.  But California Democrats—with a 52-28 majority over Republicans in the legislature, and a 25-15 advantage in the State Senate—are finally flexing their muscle and getting aggressive in a manner that has typically been reserved for Republican lawmakers.  It’s almost like it’s becoming a fair fight.

With the State of California still bogged down in a budgetary quagmire, Governor Jerry Brown has made it one of his top priorities to extend the temporary tax hikes instituted in 2009 and due to expire on July 1^st.  Brown has insisted on putting forth a ballot measure to allow the voters of California to decide whether or not to extend the taxes for five years, or to let them expire as scheduled (a bad idea, letting the voters have direct say, but that’s another issue for another column).

Republicans in the state legislature—not surprisingly—have refused to even consider the prospect of extending the taxes.  Because, well, you know, they’re working—slowly but surely.

Democrats in Sacramento have proposed a balanced approach to filling the now $15.4 billion projected budget gap, down from the over $25 billion deficit originally projected for 2011-2012.  Massive cuts along with tax increases have helped to close the gulf, but more has to be done.  Dems are calling for more cuts along with some tax increases, including the extension of the 2009 temporary hikes.

Republicans in the legislature, of course, are having none of it.  Their solution is an all cuts budget proposal that won’t raise taxes, and eliminates programs that help the most vulnerable Californians.  Under the Republican plan released last week, early child development programs and funding for mental health services would be nearly eliminated.  Former Governor Schwarzenegger tried to divert those same funds back in 2009 with a ballot measure, but he was soundly defeated as California voters rejected the idea of taking away programs for at-risk kids and of putting more people with serious mental illnesses back on the street without any treatment, potentially putting the public at risk and shutting out those who cannot help themselves.

Republicans also say they would eliminate over $1 billion in state employment costs, but never specify just how they’d go about it—most likely by eliminating 10% of the state workforce.

Democratic efforts, meanwhile, were a bit hamstrung this week despite the delivery of some good news on the budget front:  The state saw an unexpected $6.6 billion increase in revenues from the increased taxes on the wealthy among other things.  It’s good news in the sense that it’s an additional $6 billion that the state wasn’t otherwise counting on, $3 billion of which Governor Brown intends to put back into California schools—a welcome reprieve for school districts across the state.

It’s bad news because it has given Republicans reason to squawk about it being unnecessary to extend any tax increases; they argue that the surprise revenues prove California is on fine financial footing, and there’s no reason to raise any more revenues.  Never mind that this recent windfall only partially closes the remaining budget gap.  And never mind that the state is still facing years more of deficits if something isn’t done.  Because for some reason it doesn’t make sense to Republicans to continue on the course we’re on, eliminate the deficit, balance the budget, and maybe even <GASP!!!> run a budget surplus and then consider lowering taxes, giving their rich benefactors a break.  That would make too much sense.  Let’s just ignore the fact that there’s no guarantee that the state will see that same $6.6 billion next year or the year after, which would put us even deeper into a hole.

But the Dems are fighting back for a change.  Even before the discovery of the additional revenue, Democrats pushed back hard against the idea of an all-cuts budget.  First came the seed of an idea pushed by State Treasurer Bill Lockyer and picked up by State Senate leader Darrell Steinberg.  They’ve proposed hanging Republican districts out to dry. If Republicans want cuts to services, then they’ll cut funding in those districts and redirect it to districts that will put the money to better use (i.e. Democratic districts).  It’s cruel, but it makes the Republicans and their constituents put their money where their mouths are.  They want less government; they want fewer government services and less government expenditure; what better way to show them how their plan works than to hit them at the local level?

But it’s really not all that cruel if you think about it.  After all, Republican districts in California are typically the more rural and sparsely populated areas, with a few exceptions.  It’s the more densely populated Democratic districts that pay the lion’s share of taxes in the state, and much of that money gets funneled to the Republican districts that apparently don’t want it (or at least their elected representatives say they don’t).

In a way, it’s giving the Republicans exactly what they want, if not in a way that they want.  If they refuse to raise taxes to help fix the budget mess, then make them feel the most pain.

Another plan being floated by Steinberg and the Democratic legislature—kind of an offshoot that serves roughly the same purpose–is to cut state funding for services such as schools, police, fire, health care, and other social services and allow local governments and school districts the freedom to raise taxes on their own to pay for it—including implementing for the first time a local income tax.  Locales that place a higher value on certain services would be able to raise the taxes to pay for them.  Those locales that don’t value such services won’t.

The problem with that idea, and what scares Republicans and business interests so much is that it would create this mish-mosh hodgepodge of taxation across the state.  You’d never know from street to street, city to city, how your taxation system would work.  There would be no consistency statewide, which would hurt business interests and their ability to plan their own budgets from one year to the next, creating a lot of uncertainty and hampering business investment (at least theoretically).

The thing that really scares Republicans and entities like the California Chamber of Commerce is that the Democrats have the votes to pass such a measure without any Republican support.

Brown and the legislative Democrats need a mere two Republican votes to pass their proposed budget.  But Republicans, true to form, have marched lock step in opposition, instead proposing their own budget that paints a pretty grim picture of California.  They need two reasonable Republicans to step forward and accept the fact that revenue increases in addition to spending cuts must be a part of any realistic budget solution.  So far there are no takers.

Democrats have decided that enough is enough.  If Republican lawmakers want to put people at risk; if they want to eliminate essential services and leave the least among us out in the cold, then the effects of those cuts should be shouldered largely by Republican districts.  They elected those lawmakers, and those lawmakers allegedly represent their interests, their desires.  It is their voice in state government.  So why not give them exactly what they want?

It’s high time that Republicans put their money where their mouths are.