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California Budget List A Byproduct Of GOP Frustration

SACRAMENTO (CBS/AP) -- When Gov. Jerry Brown announced last week that he was ending budget negotiations with Republicans, saying their demands were too much and came too late in the process, he rejected a lengthy list of requests GOP lawmakers wanted in exchange for their votes.

His rejection led Republicans to question whether the Democratic governor was serious about compromise, as he repeatedly has claimed. But it also gave rise to criticism that Republican lawmakers had overreached and, in the end, failed to get any of the changes to employee pensions, business regulations and state spending they have desired for years.

As the blame game continues in the Capitol, the failure of the budget negotiations highlights a political dynamic that has been at the center of the dysfunction in the state Legislature — a minority party embittered by years of losses and a majority party, the Democrats, that resents having to get Republican approval to pass the kinds of budgets it wants.

Republicans have leverage during budget negotiations because any tax or fee increase, or any legislative ballot measure, requires a two-thirds vote of the Legislature and thus some GOP support. They say they have to use that leverage because the Democrats who control the Legislature will not approve their bills any other time of the year.

Democrats control the governor's office, have wide majorities in the Assembly and Senate, hold every statewide constitutional office and say their ideas are more in line with those held by the majority of Californians.

Senate President Pro Tem Darrell Steinberg admonished the minority party during a recent floor debate over the budget, saying their demands should be proportional to their representation in the Legislature (Democrats hold a combined 77-42 edge in both houses).

"I would urge you to recognize that, in order to get this done ... that you acknowledge that elections matter," the Sacramento Democrat said.

In the coming week, Brown is scheduled to press his case with Californians, and Republican officials also plan to make their claims with voters. The governor could seek union support for a special election ballot measure to raise taxes in the fall, but the way forward to solve the remainder of California's deficit — more than $15 billion — is unclear.

Republicans say while they are in the minority, they do not necessarily represent a minority viewpoint. A recent Public Policy Institute of California poll found that fewer than half of California voters favored Brown's proposal to renew two-year-old increases in the sales, personal income and vehicle taxes for another five years.

They said their requests were reasonable.

"This was an honest attempt to try to make sure that we were all on the same page, make sure that we're all starting at the same point, and try to see if there was some type of resolve that could be reached," said Senate Minority Leader Bob Dutton of Rancho Cucamonga.

Before Brown cut off the budget talks, a group of five Republican senators and later, the Senate minority leaders, sought rollbacks in public employee pensions, a hard cap on future state spending and regulatory reforms.

They said that was their price for putting up two Republican votes in each house of the Legislature for Brown's proposal to ask California voters to extend temporary sales, income and vehicle taxes. Brown sought five years of increased taxes; Republicans wanted to limit the tax renewals to 18 months.

But the wish-list submitted by Dutton, more than two months after Brown released his budget proposal for the 2011-12 fiscal year, included far more, such as changing the firing process for teachers, restoring funding for county fairs and moving next year's presidential primary to March.

The governor said he supported pension and regulatory reforms and a spending cap, but said Republicans would not agree to call a special election on the tax extensions "unless I agree to an ever-changing list of collateral demands."

Dutton, in a briefing with reporters last week, denied that the seven-page list represented demands, although he declined to clarify whether any GOP lawmakers would have supported a budget package that did not include everything on the list.

Republicans also were seeking a hard spending cap until the state has paid down its debts, a 10 percent rainy day reserve and reinstatement of a proposed constitutional amendment floated last year that would use "pay as you go" budgeting. Such a process requires that funding be identified before any new programs are introduced.

Long-sought education reforms also were on the list but were unlikely to be achieved during the governor's short window for a deal. Most California teachers work under contracts reached through collective bargaining with powerful teachers' unions.

The GOP wish list included allowing teacher layoffs, transfers and reassignments to be "based on teacher performance instead of seniority." Republicans also wanted to extend the deadline for school districts to notify employees about possible layoffs.

Talks hung up, though, largely on major portions of Brown's plan that would have required too much compromise from both sides, such as eliminating community redevelopment agencies and enterprise zones, which Republicans support and want to maintain.

Republicans also staunchly oppose his proposal to end a corporate tax break referred to as "single sales factor," in which out-of-state companies are allowed to choose their preferred rate of taxation.

Brown called it a "billion-dollar tax break to giant companies that keep jobs out of California," but Dutton said it was established only through a previous bipartisan legislative compromise. Trying to undo deals that are "written in blood," he said, further erodes trust with Democrats.

"You want Republicans to say yes to your stuff, but then you try to undo the things that have bipartisan support," he said.

With voters' approval last fall of Proposition 25, changing the legislative vote requirement to pass a budget from two-thirds to a simple majority, Republicans' clout in the budget process is even further eroded. They were able to wield influence with Brown only because he wanted to balance the state's $26.6 billion budget shortfall with new tax revenue and a roughly equal amount in spending cuts.

As legislative Republicans ponder their next move, Democrats appear to be trying to go around them.

Brown already is making a play to seize on one of their top issues, unveiling a slate of pension rollback proposals he will bring to the state Legislature. Both sides have said restructuring pensions was not among the items that hung up budget talks.

Dutton rejected Democrats' claim that Republicans had made themselves irrelevant by pushing for too much.

"We'll keep doing our job, we'll keep speaking up, we'll keep giving them our suggestions, our thoughts and our ideas. Do we have the ability to force them to accept them or deal with them if they don't want to? No, we don't," he said. "But that doesn't mean we're irrelevant. We're only irrelevant if we fail to bring up thoughts and ideas. And you are not going to silence us."

(Copyright 2011 by CBS San Francisco. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report)

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