- The Washington Times - Monday, March 28, 2011

SAN FRANCISCO | California Gov. Jerry Brown wouldn’t top anyone’s list of tax-and-spend liberals. Famous for his frugality, he ushered in his latest stint as governor by replacing the sleek boardroom table in his new office with a hard, wooden picnic table.

But there aren’t enough picnic tables in the world for the savings to close California’s $27 billion deficit. Now Mr. Brown finds himself locked in a showdown with Republican legislators over whether the budget will be balanced with a new round of tax increases or deeper cuts in spending.

Mr. Brown is pushing to place a proposal on the June ballot that would raise an estimated $12 billion by extending some temporary tax increases set to expire in July and revive a tax increase that expired in December. The quickest way to do this would be with a two-thirds vote by both houses of the legislature.

But he needs two more Republican votes in both the Assembly and the Senate, and GOP leaders have made it clear that those votes will come at a price. They released Friday a seven-page list of policy demands, including reductions in public-employee pensions and a state spending cap, that they want to see enacted in exchange for their support for the tax increases.

After 78 days of negotiations, the deadline is fast approaching. In order to call a special election for June, analysts say that the legislature would need to approve the proposal by the end of the week.

Tony Quinn, co-editor of the California Target Book, said he doubted the two sides would be able to reach consensus by then. He pointed to a recent Public Policy Institute of California poll showing a decline in support for the tax extensions.

“I don’t think there’s going to be bipartisan agreement,” Mr. Quinn said. “Gov. Brown has played an inside game, but he hasn’t solid it to the public. There’s not enough pressure on these legislators to get this done.”

The state legislature may enact tax increases on its own with a two-thirds majority in both houses, but Mr. Brown promised during the 2010 campaign that he wouldn’t raise taxes without the voters’ approval.

The governor took his message to the people in a YouTube statement last week, saying that without a tax increase he will be forced to balance the books with cuts to public education and public safety.

“This is a matter that’s too big, too irreversible to leave just to those whom you’ve elected,” Mr. Brown said. “This is a time when the people themselves can gather together in a special election and make the hard choice.”

If legislators cannot agree in time for the June ballot, Democrats could place the measure on the November ballot by way of a petition drive. But supporters say that would be too late for the start of the next fiscal year, which starts July 1, and would result in painful cuts to vital services.

California school superintendents made a push for the tax-increase proposal Monday at the state capitol in Sacramento. Unless the tax increases are extended, “we will spend the ‘11-‘12 school year decimating, devastating and tearing down programs for students across this entire state,” said Fresno Unified School Districts superintendent Michael Hanson.

Republicans argue that extending tax increases does nothing to solve the problem of runaway government spending on public-employees benefits, an onerous regulatory climate and a spending-happy legislature. And while Mr. Brown only wants a measure on the ballot, conservatives argue that such a vote sends a pro-tax message.

“California is already a very high-tax state and we should not be enablers of Democratic Party’s failure to prioritize spending,” said Jon Coupal, president of the Howard Jarvis Taxpayers Association. “If you vote to put something on the ballot, you are implicitly, if not expressly, supporting what you’re putting on the ballot.”

Mr. Brown has already done some budget-cutting this year, but he also has to answer to the powerful state unions, which have opposed all but minor reductions in public-employee benefits.

“He [Mr. Brown] is caught between a rock and a hard place,” Mr. Coupal said. “He came in trying to adopt an air of frugality with some cuts. But you have to dance with who brought you to the ball, and that’s the public-employees unions. And they have him on a very short leash.”

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