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State Budget Agreement Hold-Up

Audio

Aired 7/27/10

Governor Schwarzenegger is suggesting a budget deal might not happen until he leaves office at the end of the year. We're joined on Morning Edition by nonpartisan Sacramento political consultant Leo McElroy.

Governor Schwarzenegger is suggesting a budget deal might not happen until he leaves office at the end of the year. We're joined on Morning Edition by nonpartisan Sacramento political consultant Leo McElroy. How does the governor's statement Monday tie into his legacy Leo?

MCELROY: Well, I think the legacy is what it’s all about. I think this is a governor who is getting ready to ride off into the sunset. He’d like to make an exit that leaves somewhat of an impression. And so far the things he’s accomplished are pretty much all in danger. He has wanted to accomplish for instance a new redistricting commission. Well, that’s up for a vote in November that could overturn that. He wanted to accomplish restriction of greenhouse gases. That’s up for a vote in November. The other big hallmark thing with him is pension reform. And that’s one he’s putting on the table now. He’s saying if pension reform doesn’t happen, then he may not sign the budget at all. So you’re looking at a guy who’s trying to define how he’s going to be remembered. And at the same time has the risk of being remembered as the one who drove the car off the cliff.

BROWN: You also say debt. Debt is holding up a budget agreement. But not the $19 billion deficit type debt? What are you talking about?

MCELROY: No, this is a much more stubborn debt Dwane. This one’s a tough one. This is the political debt that Democrats and Republicans in the Legislature owe to their specific supporters. The Democrats particularly to the labor unions. The Republicans particularly to the anti-tax groups and to a lot of big businesses. So the Democrats are not going to do anything to offend the unions. The Republicans are not going to do anything to offend the anti-tax groups. And as a result a lot of them are so locked into their positions that they won’t even talk to each other in the Assembly. There’s no conversations going on at all. At least over on the Senate side they’re talking and the Democrats are complaining about the Democratic leadership for even talking to the Republicans.

BROWN: Boy it seems like déjà vu. I mean last year we were talking about this. It seems like the year before, at this time, each summer we’re talking about this. So State Controller John Chiang says without a spending plan from either the governor or the Legislature, he could be forced to start issuing those IOUs again as early as next month. How likely is that?

MCELROY: I think it’s extremely likely. I think we’ve seen the IOUs happen before. We’ve seen them come out. We’ve seen lending institutions try to provide some kind of relief by cashing the IOUs. But the truth is, it’s not unprecedented. And there may not be much answer for it. Those who have said, oh we’ll have a budget by August, are now pretty well convinced that they’re wrong. I think I’ve been saying all along that it would be at least September. And I think now I was being optimistic. I’m not sure that they can even pull their act together by September to do something. Let alone, something the governor will sign. This is, as I say, the car headed off the cliff.

BROWN: Now, you’re talking about the governor’s legacy. Can he really do that? Just hold-off and say no I’m not going to sign anything. Leave office and leave it in the hands of someone else?

MCELROY: I don’t think he can. I don’t think politically he can. I don’t think institutionally he can. And I don’t think he would chose to. I don’t think he’s going to want to be remembered that way. What he’s trying to do, I think, is use leverage. But his leverage may backfire on him. There’s a ballot prop in November. Prop 25 would change the way the budget is enacted. It would make it a majority vote budget rather than the two-third super majority we require now. And the voters may just get mad at this long delay and they may just say let’s just do it as a majority vote. The governor opposes that. He doesn’t want that. But he may be forcing the public toward that course. And that too may define the way he’s remembered when he’s done his final “hasta la vista baby.”

BROWN: Non-partisan Sacramento Political Consultant Leo McElroy.

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