Pointers On How To Fix State Mess

At first, you may think it presumptuous of me to offer advice on your upcoming State of the State address. But I have helped governors in two states with their annual reports to the people, and had a ringside seat during the term of your Democratic predecessor, who learned a few hard lessons along the way.

So I figured it was the least I could do – in the spirit of bipartisanship you seek – to provide a few pointers about your first “SOS,” as we in the business call it. Based on my experiences, here are three principles I sincerely hope you shipped to your speechwriters.

Tell people the truth about the deficit — and what you plan to do about it.

During the recall campaign, you simplistically prescribed “opening the books” and “auditing everything” as solutions to the state’s budget deficits. But up until now, we have no evidence of any audit worthy of the name having been conducted.

What’s worse, so far you have clearly opted for short-term political gain over long-term fiscal sanity. Your first official act was to repeal the hated vehicle license fee increase — without a clue where the money would come from to make up the $4 billion loss of revenue. Then, you unilaterally opted to send out billions in checks to local governments that depend on the car tax — again, without having a clue where the money is going to come from to cover them.

Isn’t this just more of the same “crazy deficit spending” you accused “the politicians in Sacramento” of during the campaign? Now, having finally wheedled out of the Legislature approval of your $15 billion deficit bond, you face another dilemma. You have disingenuously implied that voter passage of this largest state borrowing measure in U.S. history will help cure deficits once and for all.

But you know that is not true. You must make clear to taxpayers that this expensive palliative is not a long-term solution to future deficit spending at all, or even to cover next year’s projected deficit, but rather merely to plug potential holes in this year’s budget.

Let’s say voters buy your pitch and approve the bailout. Then, if in May your revised budget reveals another sizable deficit of, oh, say about $14 billion to $15 billion, voters rightly will feel they’ve been snookered.

In 1984, voters were (over)sold the state lottery as a silver bullet to ensure plentiful education funding. It wasn’t, of course, and still isn’t, and voters remain plenty ticked about it. Don’t end up being hoist on your own similar petard.

Don’t blame the whole thing on Gray Davis.

It will be tempting, of course, to blame the budget problems on Davis. But the English philosopher Sir Francis Bacon once proffered some pretty good advice for people in public office: “Use the memory of thy predecessor fairly and tenderly; for if thou dost not, it is a debt that will sure be repaid when thou art gone.”

Davis understandably blamed the energy crisis on his predecessor, Gov. Pete Wilson. But people didn’t buy it. They generally knew Wilson was the architect of the electricity deregulation scheme that blew up in our faces in 2000-01. But the thing went haywire on Davis’ watch, and they expected him to fix it. When they perceived he was finger-pointing instead of problem-solving, they headed south on him.

Now, it’s you who is on the hot seat — and people expect you to fix the budget mess, no matter who caused it. (Without, needless to say, any tax increases that hit their pocketbooks or budget cuts that affect their daily lives.)

There’s another inconvenient little problem if you try to pin the tail on the donkey. In 1999 and 2000, when the state was awash in surpluses, fully 55 Republican legislators voted for Davis’ budgets — including current Senate Minority Leader Jim Brulte and immediate past Assembly GOP Leader Dave Cox. Only when times got tough over the next three years did most Republican solons deny their votes for budgets — ones that actually cut programs and raised revenues.

In fact, in order to buy the votes of the minimum number of Republican lawmakers necessary to obtain the two-thirds approval in 2001, ’02 and ’03, hundreds of millions in extra pork had to be larded into the budget. Yes, Virginia, there was a Santa Claus-like spirit in Sacramento — and it encompassed a lot of Republicans, too.

But having said that, the fact is that state spending increased less as a percentage in Davis’ first term than it did during both of that old fiscal conservative Ronald Reagan’s terms — and even in Wilson’s second term.

We have a huge deficit problem partially because of spending growth, but more specifically because our highly progressive tax system produces the fiscal equivalent of binge-and-purge. When the economy is going great guns, there is a windfall of surpluses on which to gorge. When it tanks, a catastrophic fall off in tax collections leads to a starvation diet. Davis, like Wilson in his first term, just happened to be there when the bottom fell out.

You owe it to the people of this state to tell them exactly how you will fix permanently this boom-and-bust cycle, not just apply band-aids — or worse, take irresponsible actions that worsen the deficit just to make a hero out of yourself.

Remember, you were inaugurated, not coronated.

Early in his term, Davis averred that the Legislature’s job was to “implement” his vision. He never lived down this perceived imperiousness, and it seriously curdled his already tenuous relationship with the legislative branch.

In your own public utterances and actions, you are steering perilously close to Davis’ path. You have publicly “demanded” that legislators do this or that. You have threatened to make them “casualties” if they don’t. Some have suggested your unilateral spending decisions, which may be illegal, mimic the dictators for whom you expressed admiration earlier in your life.

There’s another old saying I like to ping politicians with: In this business, one day you’re the pigeon, the next day you’re the statue. If you don’t get what I mean, refer to Davis.

In late 2000, Davis was riding high, with public approval ratings in the 60s. Even a plurality of Republicans gave him high marks. He had just played host governor to the Democratic National Committee in Los Angeles, and had assumed the chairmanship of the Democratic Governors Association, which had served as a national stepping stone for Bill Clinton (and now Howard Dean). And after the Supreme Court awarded the White House to George W. Bush, Davis was widely assumed to be a top Democratic possibility for president in 2004.

How quickly things changed. By the spring of 2001 — just 2 1/2 years after his landslide victory — his numbers were in the Dumpster, and he never recovered. California voters are nothing if not fickle.

I’m no great fan of the Legislature dominated by my own party. But you will still need two-thirds of the members in both houses to pass any budget. You shouldn’t think you can take your case to the people in shopping malls and win every time.

Remember, these are the same angry folks camped on the lawn outside your office a few days back who caused you to reverse even some of the paltry spending cuts you originally proposed. From your thick, bulletproof windows, I suppose, they may have looked a little like pigeons. (Refer back to statue analogy.)