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On the Roundtable: Sanders' speech, Wuterich's trial, Brown's budget

January 13, 2012 1:02 p.m.

Guests: Craig Gustafson, reporter, U-T San Diego

Tony Perry, San Diego bureau chief, L.A. Times

Michael Smolens, government & politics editor, U-T San Diego

Related Story: Roundtable: Sanders' Speech, Wuterich Trial, Brown's Budget


This is a rush transcript created by a contractor for KPBS to improve accessibility for the deaf and hard-of-hearing. Please refer to the media file as the formal record of this interview. Opinions expressed by guests during interviews reflect the guest’s individual views and do not necessarily represent those of KPBS staff, members or its sponsors.

CAVANAUGH: Mayor Sanders unveils an agenda for his final year in office. The long-delayed Haditha trial gets underway, and we get a state budget that the governor calls "not nice stuff."

This is KPBS Midday Edition Roundtable. I'm Maureen Cavanaugh, it's Friday January 13th. And I'll be taking your calls during the Roundtable discussion. 1-888-895-5727.

I'd like to introduce today's Roundtable. Tony Perry is San Diego bureau chief of the LA Times. Welcome, Tony.

PERRY: Thank you. Good to be here.

CAVANAUGH: Craig Gustafson is a reporter with the UT San Diego. Hello.

GUSTAFSON: How you doing?

CAVANAUGH: And Michael Smollens is government and politics editor for UT San Diego


CAVANAUGH: Jerry Sanders delivered his final state of the city address this week, spelled out his priorities for his final year in office with a sound track to match. We invite our listeners to join the conversation. Craig Gustafson, would you start by describing the ambience of the state of the city speech? Was it dramatic?

GUSTAFSON: Well, it was. Some would say it was a little over the top, but I think that's what the mayor was going for. He told me he wanted to do something fun and different. What they did is they had a 6-minute intro video, set to Eminem's lose yourself, and the music played while kids were running along San Diego streets, running by the projects that the mayor would like to finish this year, the Chargers stadium, the downtown library, expanding the Convention Center, remaking Balboa Park. And it ended with them at Balboa Park, and then transitioned to ACDC's hells bell, and then the video showed the mayor pulling up in an SUV, and then walking into Balboa theatre to great applause.

CAVANAUGH: Now, just remind us the significance of hell's bells, that theme song for San Diego.

GUSTAFSON: Well, I don't know -- if you look at the lyric, it's more about being evil. So I don't know. I think it was more the bell tone that they were trying to --

CAVANAUGH: And trevor Hoffman, right?

GUSTAFSON: Yes. So it's closing the deal, basically, is the mayor's point. And he wanted to say -- he's in the ninth ending of his tenure as mayor, and he's going to finish these great projects.

CAVANAUGH: And any dissent was shut down pretty quickly. There were arrests made of occupy protestors.

GUSTAFSON: About 30 minutes into the speech, some occupy protestors were in the upper deck of the theatre, and interrupting his speech, and four people were arrested, and charged with felony conspiracy for disrupting the speech.

CAVANAUGH: The voice of San Diego had an interesting take on this video. Scott Lewis thought it showed a total disregard for the city's neighborhoods. Crime is bad in the neighborhoods, you have these kids running in downtown San Diego past all these wonderful projects. What do you think about that?

GUSTAFSON: I think people interpret that video depending on how they view the mayor. If you're a supporter of the mayor, you thought that video was inspirational. If you are perhaps a laborer leader or somebody who has been on the other side of some of the things the mayor has had to do during his tenure, you probably have a different view of that video. And there were some images in it where police were arresting people as the kid was in a grittier part of San Diego

CAVANAUGH: You're kind of rolling your eyes, Tony.

PERRY: No, again, having been here since Alonzo Horton arrived, I know these things have theatricality about them, and grandiosity about them, and in the old days it was the only actual duty of the mayor to deliver one of these speeches. I remember are one year we were promised a great big statue at Point Loma which didn't come about. But I was struck by the comment that you quoted the mayor as saying "I promise we won't give an inch to those who doubt the city or would hold it back out of self interest, not now, not ever." Are there names to these people?

GUSTAFSON: I'm pretty sure he was he was delivering a shot to folks like Carl DeMaio, who's a City Council member, and you know, running for mayor to replace Sanders. They butted heads over many things, including the downtown library. And I'm sure he would also say that laborer unions want to prevent the initiative that he wants to put on the ballot in June that would end pensions and give new hires 401Ks, and he believes that's the last major thing that needs to be done to solve the public pension mess. And obviously unions don't think that's the correct way to go.

CAVANAUGH: Now, what were the big things that the mayor hit? I guess the headline from this speech was that the mayor wants to become a closer, take all these projects that he started including the project to get San Diego on a structurally sound budget surface, so to speak, and bring that all home by the end of his term. Is that basically it, Craig?

GUSTAFSON: Well, a lot of the speech was him, you know, thanking people who helped him accomplish some of the financial goals that he had. The city was in quite a mess when he took over six, seven years ago. And so he wanted to note the things that have been done on pension reform and retiree healthcare that have saved hundreds of millions of dollars and note that this year he will finally for the first time in 30 years, he says, the city will have a balanced budget. Because past budgets have been closed through cuts and also 1-time fixes. At the time of his speech three days ago, it was the $2 million budget deficit, but there was good news on the pension front. Good returns have reduced that. So the deficit now is about $12 million, which is significantly less than previous years

MAUREEN CAVANAUGH: The mayor is pointing to his accomplishes, including the things that he wants to accomplish by the end of this term. One of those accomplishments, the central library. He says it's now fully funded, that new downtown library. But nobody is really quite sure who's covering the final 15 or so million dollars. ; isn't that right?

GUSTAFSON: They have an unnamed donor who has guaranteed 15 million to complete the interior of the building. They're not saying who that is. They needed a guarantee to finish the second phase. And I put in a public records request to get the document, but they say it's blacked out even if I do get it

CAVANAUGH: So it's going to be redacted?

GUSTAFSON: That's what I've been told. They're very secretive about these things. And they say they're probably going to publicly say who it is soon. But part of the reason why they don't want to make a big production out of it is because they're still trying to raise that $15 million over the next year. It doesn't have to be spent till later this year. So they're hoping that donors will come forward, and this generous donor won't have to folk over 15 million

CAVANAUGH: I see. What did he have to say about the Chargers stadium? There was a new twist to that idea, with a whole Chargers stadium entertainment complex?

GUSTAFSON: That's been vanedied around for a while. Nobody wants a Chargers stadium for ten games a year. They want a venue that's going to provide a lot of service to the community where they can have concerts and --

PERRY: Well, we want playoff games and a super bowl too!

GUSTAFSON: Well, don't push it, Tony.

GUSTAFSON: And some of the mayoral candidates are pitching those same ideas of making it a larger scope thing. And that's the mayor's goal. And he doesn't want it to just be for ten games a year.

CAVANAUGH: Mike,el, in listening to this speech, do you get the sense this is a different kind of speech for the mayor than in past years?

SMOLLENS: Well, it is his final speech, there's a lot of legacy stuff as Craig talked about, and focussing on these legacy project enforce him and other people to reflect upon if they are able to do them. But the key thing was he came into office to fix the financial situation, and I think that's -- that may not be the thing people remember so much. They'll remember the bad times, but if there's a big library and a new stadium, and an expanded Convention Center, they'll be thankful, those people who want that, to the mayor. But I thought that the financial, solving the structural deficit was his goal to come in, and if he does accomplish that, that's quite an accomplishment. What's not said is all the pain they had to go through to do that. On the pension front, regardless about the initiative, they've changed pensions, reduced them for workers already. You know, we've written ad nauseam about part cuts and so forth. Those were -- it was a feel-good moment, and we always feel good about the physical aspect of San Diego, the weather, but the city is not out of the woods yet.

CAVANAUGH: Another nonsexy thing that mayor Sanders did promise when he took office to fix the city's infrastructure. And that really is sort of is just hanging there in mid-air. Was that addressed at all? .

GUSTAFSON: He has said several times they're going to invest $100 million in repairs this spring, and borrow the money, and they've done another hundred million previously. But the situation that he was in, are the city was a mess, then the recession hit. He was already dealing with budget cuts and lots of other stuff, and then a recession hit, and it's really hard to invest in your infrastructure when you're hit with a double whammy like that.

CAVANAUGH: In going through all the things that the mayor was talking about in this speech, what are the chances that he's going to be able to pull it off, Craig? Especially the big building projects. We've heard that the library is taken care of, we don't exactly know how. But what about let's say the Convention Center and the stadium? Are these things likely?

GUSTAFSON: Well, there's hurdles to everything. The library, like we said, is checked off. The Convention Center expansion, they have a financing plan that would have hotels assess on their bills for tourists, the TOT tax, but some hoteliers are not in favor of that. And there'll be a vote on spring on that. And then, you know, as far as the Chargers stadium, the mayor is going to have a financing plan by the end of march March. And hoping for a public vote either in November or some time in early 2013. But it's hard to judge the Chargers plan because nobody knows what it entails and what sort of taxpayer money is going to be involved

CAVANAUGH: If these things go beyond his tenure into 2013, and there's still a question mark surrounding those projects, how likely is it do you all think that whoever comes on after mayor ascertaineds is going to pursue a Chargers stadium or expanded Convention Center? Mike?

SMOLLENS: Well, we've got four major candidates, and they're coming from different perspectives. I think you have probably pretty strong supporters, depending on what the financing plan of the program is in Nathan Fletcher, and Bonnie Dumanis who's the voice of the establishment. Carl DeMaio hasn't been a total nay sayer on the stadium. But he is known for his fiscal focus. And if this doesn't add up, they'll have a problem with that mayor. Bob Filner is another wildcard. He's talking about trying to make the Chargers a public entity, which just doesn't fly. My prediction is that on two fronts, they would like mayor Sanders to be the person to run this through, and that will happen in November am but I'm wondering whether they think early-year special election is better, because you'd have a smaller turnout, and an intense turnout. November, you've got the presidential election, a lot of Democrats who may support a tax increase, but might not for that stadium. It's more of a wildcard. I think on that pure political aspect that a special election next year, despite the cost of the city, which is substantial, is something that makes political sense for them.

CAVANAUGH: What, in a political sense, what were the contenders for the mayor's seat's reaction to this final speech?

GUSTAFSON: You had -- Bonnie Dumanis obviously is supported by Sanders. So she is very positive on Sanders, and the same with Nathan Fletcher. I didn't talk to DeMaio. I'm not sure what his thoughts were after the speech. And Filner wasn't in attendance.

CAVANAUGH: So those two were still question marks. What's your sense of speaking with peek and going around how the mayor is viewed by San Diegans? Positively or negatively?

GUSTAFSON: I think it's positive for sure. I don't think there's any doubt about that. There's obviously pockets of people that are detract offer of proofs and and don't like how he's handled things as far as budget cuts or pension reform. But it's very clear that he's well-thought of.

PERRY: And I think that's his strength. He's not a devicive figure.

GUSTAFSON: Absolutely.

PERRY: They like him, they may have voted for someone else, he doesn't pick fight, he rose to the fight when Mr. Aguirre was the city attorney pretty L. But he's not a divisive figure. And I think he came in clean. He wasn't involved in the pension mess. As I look at his tenure, I don't see that he did anything that Dick Murphy didn't plan to do, or dick Murphy didn't have a report saying you ought to do. Whether he could accomplish it given the fact he was tarnished by having been there when it all went to hell with the pension plan. But it seems to me that Jerry Sanders -- I don't want to say mellow. But solid feet on the ground. This is a man who dealt with life and death as a cop. So budget financing, while it's very significant, isn't life and death. And he may have been the person we needed to carry through on a man that others would have tried to carry through on dick Murphy, for example, but probably couldn't have done because of their temperament being different. Of the Perry view, freely given.

CAVANAUGH: My last question to you, Craig, is in light of this speech, what would you say you think the mayor needs to accomplish to call his tenure as mayor successful?

GUSTAFSON: I think if he can solve the budget deficit, which got a lot easier today. It's only $12 million, that's going to be his legacy. It's not going to be a big project. Yes, the library happened under his watch. But that was a lot of private fundraising that made that happen. He did play a role, obviously. But it's a tall order to get everything that he wants to get done by the time he leaves in December. So I think his real legacy will be fixing the city's fiscal crisis and clearing the deck, so to speak, for whoever is going to be the next mayor. And he made that clear in his speech that he did this work. So the next person can dream bigger for the city.

PERRY: Do you think he'll play any role or will he -- our exmayors either tend to fade away or get radio shows, and if you don't get a radio show, they're not there.

GUSTAFSON: He's told me he's going to take a long trip to Italy with his wife. And then he's going to probably go back to what hedid before in doing nonprofit work.

CAVANAUGH: And we have a whole year to discuss where mayor Sanders is going to be going. &%F0



CAVANAUGH: Is this KPBS Midday Edition Roundtable. I'm Maureen Cavanaugh. My guests are Tony Perry, San Diego bureau chief with the LA Times. Craig Gustafson, reporter with UT San Diego, and Michael Smollens who is government and politics editor for UT San Diego. The trial in the squad leader accused of the killing of 24 Iraqis in the town of hagot under way in Camp Pendleton in week.

Tony, you are covering this trial at Camp Pendleton. It's getting initial attention. What's the atmosphere in the courtroom?

PERRY: Well, are the atmosphere in the courtroom is confrontational, adversarial, with two different sides, and this thing has been going on a long time. The incident itself was in 2005, are the charges came down in 2006, seven other defends have had their cases adjudicated, and now we're down to the last one, Frank Wuterich, who gave the order, go in, shoot first, ask questions later. And when the smoke cleared, a whole bunch of Iraqis were dead, including women and children. So it's very tense. And it's -- the stakes are large, and you can tell it in the courtroom.

CAVANAUGH: You must have been reading some of the national coverage of this case so far. Do you think that the importance of this case is being taken out of proportion in some sense?

PERRY: No. This case asks the question, which, while we are out of Iraq, this question is still pertinent to Afghanistan and probably pertinent if we get involved in other conflicts like this. How is, how do you engage a war against an enemy that hides behind women and children? That's the modern dilemma for the U.S. and just today, Friday morning, there was testimony from the Lieutenant who gave the staff sergeant the order to clear that house. His estimation was that that was a hostile house. And as such, the Marines were justified in going in and killing or capturing everyone in that house. Again, while the smoke cleared, three women and seven children were dead, and a number of males also. And then they went into a second house also. That question is still with us. That moral dilemma is still with us, even though the US is out ever Iraq. And like so many things involving Iraq, it's centric to Camp Pendleton. The first combat troops into Iraq were from Camp Pendleton, and now the last of the major court martials involving that inflict is at Camp Pendleton.

CAVANAUGH: Now, the Marine staff sergeant, Frank Wuterich, who is standing trial has been described as the last man standing in this case. What did happen to the other men in his squad who were accused in these killings?

PERRY: Sure. Initially, there were eight marines charged, four of those were enlisted who had actually pupulled the trigger, and then four officers who didn't do an adequate investigation according to the charges. All the charges have gone away. One of the officers were acquitted at court martial. A couple of others had the -- three others had the charges dismissed for one reason or another, and three of the four enlisted had charges dismissed. A couple of those had charges dismissed with the proviso, as is often the case, that they would then testify for the government in this case against Wuterich. So yes, he is the last man. Now, there were legal issues that slowed things down. An attempt by the prosecution to get outtakes of the interview with 60 Minutes. That took years. So the delay really is on both sides. Both defense and prosecution tried legal mamovers that delayed this thing long beyond what anyone thought would occur.

CAVANAUGH: Tell us more about the defense and prosecution. As you say, the atmosphere in the courtroom is of course confrontational. But who are these attorneys? Are they equally effective in presenting their cases?

PERRY: Well, are the prosecutors are both marine, and the defense attorneys are former marines. These are veterans of court martials, and the procedures thereupon. It bears noting that how this all began, it began with an improvised explosive device who killed a marine, Miguel terasace from El Paso Texas. He was dead. The Marines from Wuterich's squad took gunfire, they thought they were coming from a house about 200 meters away in this community of Haditha, in the yew freight ease river valley, and once given the order to clear those houses, Wuterich led three marines to the first of the houses and told them, according to testimony, shoot first and ask questions later. And so they burst in with their M16, with their grenades, and killed everyone in sight. It got so smoky, and debris-filled in the air, they really couldn't see who they were shooting. Women and children cowering in fear in a bed were shot and killed. And a man, 76 years old, confined to a wheel chair was killed. No insurgents were found. Did they get out the back and escape? That's going to be an assertion. The other assertion by the defense is by doing this, Wuterich and the others were following their procedures. And the lieutenant testified today, under the rules of engagement, once it's hostile, you can take the entire house down. You can call air power in and flatten it if you want it. That happened later in Haditha that day. When you wage war as we have in Afghanistan and Iraq against an enemy, a malicious style enemy that hides behind women and children.

CAVANAUGH: If anyone would understand that happened when you're talking about rules of engagement, and fog of war, that phrase has been mentioned in connection with this Haditha trial as well. It would be people who have been in combat, and that brings me to who was on this jury.

PERRY: Indeed. The military jury, four enlisted, four officers, they've all been to combat, all had experiences clearinghouses. The enlisted are senior enlisted. These aren't the young ones. They're master sergeants. Of so they have been around. And they've led men, and they have had to give orders, and they have been in combat, some of them have exchanged gunfire with enemies. So that could cut both ways. That could be them saying when the gunfire starts, anything goes. Or it could be them saying I was in a situation like that, and we didn't burst into homes and kill people. So it could cut both ways. Whether the jury is defense oriented or prosecution oriented, impossible to tell.


SMOLLENS: Well, Tony's been over there, covering the trial, I wanted to hear a little bit more from him. But in terms of the rules of engagement, is there the potential for that to be justified, so to speak? But certain actions in terms of -- wasn't there talk about encouraging people to lie during the investigation, and that could bring this person into trouble? Or there could be a partial conviction on that?

PERRY: Oh, indeed. Wuterich, who's 31 years old, is accused of manslaughter in the actual death. And there were five young men pulled out of a car and killed. Manslaughter, assault, particularly against the women. But he's also accused of dereliction of duty, and that's a broad, 6-lane freeway, and he could indeed get convicted of not telling his people let's go in, lulet's go in careful. Now, if he is convicted, it only takes a 2/3 vote. This isn't the civilians is. They vote once. And if it's 2/3 for conviction, conviction. If it fails by one vote, it's acquittal. Then they decide the penalty. And they could decide that the conviction is the penalty. And I've seen that happen before

SMOLLENS: In a broader sense, the trial is heating up or coming at a time when we have front-page news of this video of marines urinating on corpses. I believe one of the people testifying said that he had done that. Is that correct?

PERRY: Absolutely

SMOLLENS: And two thoughts or questions I have is that while this might not be the Abut Ghraib prison images, are these coming together and inflaming things over this? And two, this image of the Marines urinating, and then this separate person, who was not part of that, was this common practice?

PERRY: Urinating on bodies? No. Great care was given I think in most instances with the bodies of the fallen, be they civilians or insurgents. I was there a number of times when commanders stepped in, we're going to bury these folks. I don't want you giving them funny names and stuff like that. Ninety-nine times out of a hundred, people act as they should over the rules of war. The 1%, they don't. And in the age of videos, the stuff hits the fan real good. But you're right, we have testimony that one of the Marines in Wuterich's squadron, having helped kill five young man standing next to a car, then urinated on one of the bodies and may also have boasted to one of the other marines, "I just killed that" bleep bleep. So a lot of passion. You have to remember, they just lost a marine that they thought a lot of. His head was smashed, his legs were severed, it was the first casualty they had suffered, and this was also fighting going on in and around the city. It doesn't excuse doing what these folks did. But you have to keep it in context. These were young men, had only been in Haditha a few weeks, Wuterich had never been in combat in this regard and was actually rotating out of being a squad leader, like the cop who gets involved in a controversial shooting his last day on the Jon. Wuterich was literally on his last day as a squad leader. He was getting a promotion where you don't really lead men into buildings and things like that. That's the kind of thing that the jury will have to sort out. Did they act as they should have? Not necessarily as they were covered by the ROE, rules of engagement, but still, did they need to go in and start killing everybody in sight? Was it legitimate? Or was it obviously that fire was coming from that house? And on that point, there's conflict.

CAVANAUGH: I want to remind our listeners we're taking calls at 1-888-895-5727. I have heard, Tony, that one of the reasons that this case has gone as far as it has is not simply, if I can use that word, the loss of life, and the gory horror of the situation, but the fact that there was a cover-up initially.

PERRY: I would use that word. In fact, the investigations, they stay away from that word. What there was was a kind of lassitude where they just sort of did a quickie report and said these 24 Iraqis died in a cross-fire, or maybe even from the IED explosion itself. And they moved on. Now, along comes Time magazine and does a very strong story using the word massacre. And then the Marine Corps redoubles the investigation. One could claim that they were embarrassed. I'm sure they were. And from that investigation, that investigation contradicts an earlier investigation and says there was criminality here, and charges were filed. But the allegation has always been that the Marine Corps panicked, saw its image being tarnished, ands has in a certain sense, rushed to judgment in filing charges against eight, initially, enlisted officers

CAVANAUGH: What does the Marine Corps-- what is your sense that the Marine Corps is hoping to accomplish with this trial?

PERRY: Well, what they've already accomplished, and after we realize that military justice looks like civilian justice, but it isn't. It looks like it, but it isn't. It's a justice system that goes back to George Washington and the revolution. And the rights of the defendant are sometimes secondary to the good order and discipline of the Force. And I think this case has already had a chastening effect on the -- chastening effect on the whole force. The lieutenant colonel who was a battalion commander who was charged, are and the charges were dropped and he was forced into a retirement, is probably the best known lieutenant battalion commander in the Marine Corps. We could all name one or two people in our organization who have done bad things and had their jobs truncated. That's occurred here. Whether they ever have a conviction. Such things as when you did into a house, what do you do, and such things as when your marines have killed civilians, how deep an investigation? You can bet that after the Haditha case, and after the indictments in 2006, the investigations were a lot deeper, and the care on bursting into houses was a lot more. So it has already had a chastening effect on the overall fighting force. Now we're down to what effect it's going to have to Wuterich.

MAUREEN CAVANAUGH: And also what effect it's going to have internationally because this case has been cited as one of the reasons that there are no US military left in Iraq. The Iraqi government, if I understand this correctly, said because -- pointed to this case and said look at the delays, nobody's been held accountable for what happened in Haditha. So what we want to do if anything goes wrong in our country with US military is we want to try the US military personnel here in Iraq. We want to try them.

>> Sure. And the Baghdad government was unmovable to that. They would not sign what they call a status of forces agreement where all allegations against US troops would be dealt with by the U.S. as it was during the conflict. You have to be careful, a lot of these comments are made by folks who didn't want the Americans to stay anyway for their own political purposes because there's still a sectarian split there, and there are folks there who maybe their alliances to the Iranians or whatever who never wanted the Americans to stay after Saddam was toppled. I've been to Haditha. A number of times, before and after this event. And it's hard to judge what impact on the hadignitian, if you will. The US spent a lot of time and money repairing the hospital, giving money to the families, payments to the families of the dead, and trying to repair relations, if you will. Haditha is a very difficult place. How well that was done, I don't know. But certainly an effort was made. And Haditha is a different place today. It had been an insurgent stronghold, they executed anybody who was friendly to them, the Americans, chopped their heads off in a soccer field, and I've seen the bloody mess they left. They found a woman doctor who had the audacity to wear a sleeveless blouse, and they chopped her arms off. This was a very mean place for the Americans and anyone who was sympathetic to the Americans and what the Iraqi government was trying to do. Does that justify what happened on November 19th? Not at all. But it does give it a context.

CAVANAUGH: And we will keep close to you and your reporting on this, Tony. And it's time for our next topic. &%F0



CAVANAUGH: A gun fire and gunfire and Mr. Gunwas going to Gunn gunn and

CAVANAUGH: This is KPBS Midday Edition Roundtable. I'm Maureen Cavanaugh. My guests are Tony perry from the LA Times, Craig Gustafson, court reporter with UT San Diego, and Michael Smollens, government and politics editor for UT San Diego. And reaction is coming in on governor Jerry Brown's new budget. Of the state's independent budget analyst says the governor may be placing too much hope in his plan to raise taxes.

Michael, the budget analyst's report calls the tax proposal a giant question mark hanging over the budget. Why is that?

SMOLLENS: The whole budget was a giant question mark. It was a roll of the dice as last year's was. Last year, just for context, they patched true a budget with I trigger mechanism based on optimistic revenues that automatic cuts would take place. If the revenues didn't materialize, and they didn't, there were cuts just announced in December. This bases the budget on the governor's tax increase, which would be a sales tax and an upper-income tax. Tax increases are always a tough call in any circumstances. Of the and particularly with people's displeasure with the government these days, that'll be tough. Now, if that happens, there's some good news in the budget. Schools are largely protected, and there's increases, although health and welfare always gets whammed, and nay did this time. If the tax increase didn't happen, then there's going to be a lot of problems, and most of the cuts would fall on schools. So the critics are really suggesting that he's kind of putting schools on the bubble saying if you don't approve my tax increase, schools are really going to be harmed. Also what's interesting is the governor's administration is encouraging school districts to plan their budgets based on the tax happening. Now, for further context, that's what San Diego unified school district did this past year. There were some language in some -- and some legislation saying base your budgets, you can't cut based on -- you need to do the optimistic projections. Not all districts did that, and they were in better positions should they have faced the mid-year cuts. So school districts are at a Los this stage as to how to budget. Do they start putting out pink slips in contrast? Or goes what the administration wants? Then what do they do mid-year if the taxes don't happen, and there's some movement in Sacramento that the governor is working with legislators to provide some legislation that would allow those cuts to happen? There's all sorts of rules and regulations once you get into the school year about laying people off, particularly teachers

CAVANAUGH: What kind of taxes is the governor hoping that voters will approve in November?

SMOLLENS: Well, primarily, it's a bump in the sales tax. And also the very upper income would have a tax increase. Now, some -- the legislative analysts and others suggests that the governor's take, and I don't know, it's around six.something billion from those taxes am they're saying it wouldn't be as high as that. They're saying it would be more cuts even under the best circumstances. It's further interesting, is it would increase the state's reliance on income tax. That's been a problem over the years because the income tax is so volatile, we have gone through these boom and bust period periods for decades, and a lot of people think you need to change the tax structure to smooth that out. There's a group called high-minded individuals, and a group called think-logical California, and they would put more taxes on services, try to smooth out the income tax, and take away a lot of deductions, because they think that while they won't keep everything even, it will be a smoother ride with the gyrations of the economy.

CAVANAUGH: Now, the actual -- the specific criticism is that the budget is too dependent on high-income earners' next taxes, isn't that it?

SMOLLENS: Very much so. As a colleague of ours, Dan Weintraub, wrote explaining that, he says, hug a millionaire today because despite all the 1%ers, they do help fund the state quite a bit under the current tax code.

CAVANAUGH: Do you think, Tony, that there is a feeling among Californians from your sense, from your reporting, that things have gotten to the point where they would actually vote for some new taxes?

PERRY: No. I don't. We always have those polls that say I would vote for -- thus and so. I would vote for something that directly helps me. And then they don't. No. And one reason is I think the state government is a -- particularly here in San Diego, is an entity that is way far away from us, and we think incorrectly not really significant in our day to day lives. It is. But we don't think so. So no, I don't see people -- and also the whole pension issue at the state, and San Diego is going to -- has been a miner's canary on that. We went in first. And now the straight is trying to grapple with that. I think people are reluctant to increase their taxes so we can provide very nice pensions to state employees. I think those billionaires that are pushing -- Mike is being kind calling them high-minded. They're wealthy people who don't have to worry about the rent money. I think they're whistling dixie.

GUSTAFSON: Basically the governor is gambling that the spread of education cuts will convince people to go for a tax increase. San Diego tried a different tactic --

PERRY: Yeah,

GUSTAFSON: Saying public safety is going to get cut if you don't approve a sales tax hike in 2010, and that bombed. So I mean, that appears to -- obviously it's an age-old tactic. But clearly they want to show voters, hey, this is something we think you care about that is going to get cut if you don't agree to increase your taxes

PERRY: And those scare tactics have been used and used and they fail. They started failing with prop 13. If you vote for prop 13, thus and so will happen. Well, are some of that actually did happen, but more slowly than they threatened. They have been to the bank with that kind of threat.

GUSTAFSON: Absolutely

PERRY: Over and over again. In schools they used to say, if we don't get a tax increase, we'll stop bussing. It used to working doesn't work anymore

SMOLLENS: What's interesting, you know, and I agree with Tony, the atmosphere for tax increases, especially for almost any level of government, which most of them seem to be on the border of disfunk to some degree or another. Early on last year, Democrats were pushing the governor to do the sky is falling thing on early on. We've got a real problem, you've got to tell people. And he said it doesn't work. This was the governor. He's kind of doing that now. But he really held off until well into the game, maybe figuring that that card could be played with greater effect later. But he's been around. He's probably done this before and realized that that threat just doesn't work. So they're going to have a big problem. Their biggest hope, I'm sure is that the economy picks up, and nobody is quite predicting it to do like that.

PERRY: I rise as the father and financier for a state university student. How bad is it going to get? How much pain am I going to endure in the next year?

SMOLLENS: Well, I'm trying to think. Let me look at my cheat sheet. I think they're talking about another couple hundred million dollars to both the UC system, and the California state university system

CAVANAUGH: If the taxes don't get passed?

SMOLLENS: Yes. But regardless, you've seen, read, both systems are just going to be methodically increases the fees that the notion of free education -- of higher education is long gone in this state. But the affordable aspect is increasingly an issue as well as accessibility. UC is focussing on out of state students.

CAVANAUGH: These cuts may or may not take place considering on what voters do in November, some big cuts to social services continue to take place in this new California budget. Some would say, especially healthcare services, to the poor and to young people in this state are being gutted.

SMOLLENS: And they're the ones that really don't have a great constituency up there. This is nothing new. Education has a very strong lobby up there. And rightly so. But the advocates for the poor and those services, they get a little frustrated with the education community lobby because it's a limited pie. And they think every time it shrinks that education goes out of their way to protect their slice, and it always falls on the health and welfare services which have been continually cut even under the governor's most positive scenario. They're getting cut dramatically again.

CAVANAUGH: You said they're waiting to see what the revenues are like when they come in after taxes. What if there's this huge influx of revenues? What are they waiting for? If there are -- there is this much more anticipated revenue than they are expecting, what would happen?

SMOLLENS: Well, I mean, that's -- as the deficits have surprised administrations in the past and the legislators in the past by being even greater than forecast, again, the boom-bust process in California is very difficult to predict. And they come to the May revise, and sometimes in the good years, they were anticipating a billion dollars surplus or beyond and suddenly it rockets hugely. Conversely, that sometimes -- the deficit just drops even greater by -- they just don't a good handle on that. It's a very difficult situation to budget on. One of the interesting things, the governor is saying you've got --a start planning to cap now to the legislator, and the leaders are saying hold on a minute. They're looking at this minute of, for instance, are Facebook going public, and they expect hundreds of millions of dollars in that through taxes, so they want to wait for them until the May revise as they call it to really have an accurate assessment of what the revenue picture is.

CAVANAUGH: Now, the good afternoon wants the sales tax and the so-called millionaires' tax to be on the ballot in November. How does he do that? Can he just place these initiatives?

SMOLLENS: He's going to the voters. He's circulating petitions. He tried to get something, not exactly like this, but a tax increase on the ballot for the legislator, but you need 2/3 vote, couldn't get any Republican's vote, and they have a handful of votes needed in both houses. So they still have that leverage. It's kind of something. We're really seeing the manifestation of the Occupy Wall Street, occupy San Diego rhetoric move into this area. It's sort of that this has a tax increase on the 1%, or the upper-income thing. And you're hearing the governor, the president, Republicans beat up Mitt Romney. It's very interesting. When that sells enough, I'm not sure am we've learned that tax increases on the upper income don't necessarily resonate to people at lower income because they envision a tax increase as a problem for them in some cases. Of

CAVANAUGH: And the Republicans, the few that there are in Sacramento, are just standing back and watching what happened?

SMOLLENS: Their big mantra is that they've got to streamline regulations and cut government to boost the economy that will help create jobs and so forth. Some suggest that's a dubious aspect that you can't do so much that will suddenly flood the economy with all this new energy to make up for the revenue.

CAVANAUGH: And so we'll have new petitions to sign outside the grocery store.

CAVANAUGH: Any day now. I want to thank my guests very much.

PERRY: My pleasure

SMOLLENS: Thank you.