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The Roundtable: What’s Next For State Budget Debate?

Aired 6/17/11 on KPBS Midday Edition.

It's been a busy week in Sacramento. On Wednesday, state Democrats passed a proposed budget heavy on one-time fixes and budget gimmicks. The next day, Gov. Jerry Brown vetoed the Democrats' budget because "it continues big deficits for years to come and adds billions of dollars of new debt." In a separate, but related story, lawmakers passed legislation to eliminate state funding for local redevelopment agencies. We discuss the latest news coming out of Sacramento, and explain what these actions will mean for local schools and other state agencies.

After Governor Jerry Brown vetoed a budget proposal crafted by state Democrats two weeks ago, he has now agreed to a different majority-vote budget plan a day before the end of the fiscal year.
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Above: After Governor Jerry Brown vetoed a budget proposal crafted by state Democrats two weeks ago, he has now agreed to a different majority-vote budget plan a day before the end of the fiscal year.

It's been a busy week in Sacramento. On Wednesday, state Democrats passed a proposed budget heavy on one-time fixes and budget gimmicks. The next day, Gov. Jerry Brown vetoed the Democrats' budget because "it continues big deficits for years to come and adds billions of dollars of new debt." In a separate, but related story, lawmakers passed legislation to eliminate state funding for local redevelopment agencies. We discuss the latest news coming out of Sacramento, and explain what these actions will mean for local schools and other state agencies.

Guests

Michael Smolens, government editor for the San Diego Union-Tribune

John Warren, editor and publisher of San Diego Voice & Viewpoint

Jose Luis Jimenez, social media editor for the KPBS Fronteras Desk

Read Transcript

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.

ALISON ST. JOHN: It's always more fun if we hear from you. It's very easy to join us, you can just dial 888-895-5727 but don't hesitate if you have a thought or question because the show moves fast so give us a call. 888-895-5727. News this week for the first time in more than two decades California legislators met the constitutional deadline to propose a state budget and they neatly sidestepped a new law that said they would've stopped getting paid if they did not meet the deadline but it turned out to be a gimmick. The governor vetoed the budget the very next day, that's the first time in history that's happened. So Michael, he vetoed his own party's budget, why?

MICHAEL SMOLENS: Well is the exact kind of budget he said he would not sign from the election last year through the early part of his tenure in office since January. This harkens back to the old budget when they couldn't get a deal they would patch there, kick the deficit down the road and do a lot of sketchy things which he and others say are legally questionable and clearly there would be legal battles over some of the fee and tax increases in the budget.

ALISON ST. JOHN: He says it doesn't go far enough and California is facing a fiscal crisis and Californians need very strong medicine. What is he talking about?

MICHAEL SMOLENS: What he wants the broader tax extension to get the Republicans on board to at least put that on the ballot before voters. He was hoping to do before it expired on July 1. That is not going to happen somehow it makes it more difficult because they're asking Republicans to actually approve the tax extension which is something they really don't want to do. They are sounding like they would put it on the ballot and I think he just figured that vetoing the budget still gives him a big dog image or positioned at the table in negotiations. The real issue as you pointed out frankly was that the pay issue for legislators. They barely ever meet the June 15 deadline. I think he's looking at July 1 as the real deadline

ALISON ST. JOHN: Should we have seen this coming?

MICHAEL SMOLENS: I was vaguely kind of surprised that he didn't at least take a couple days because the deadline is not an insignificant thing. We think of legislators as just that but they are people with families and we are talking about, we did the math and in some cases $400 a day that they would lose. That's real money when you've got two residences, one in your district and one temporary in Sacramento.

ALISON ST. JOHN: So John, could he legally raise taxes without a public vote?

JOHN WARREN: I don't think there is much more at stake here. Not only did he promise not to raise taxes without a public vote but also promised that he wouldn't do a budget that had the same kind of gimmicks and smoke and tricks that mirrors that he'd seen before and I think one of the people reasons people voted for him is they felt strongly based on what he said that he'd been there, done that, didn't have any political things to gain and he was going to be honest in his approach. So I think what really needs to happen now is that the people at the state need to shift their attention from the governor to the legislators and look at what the problem is. Republicans have this hard-nosed position that they are not going to change. The governor needs two votes in the Senate and two votes in the House to get the measure on the ballot and it seems like no matter what happens we are not going to change and the Republicans are saying well we will get it on the ballot if we can get our pension reform on there which is not going to happen in relationship to labor. So we have a lot of jockeying and meanwhile people are suffering, schools are suffering, children are suffering, caregivers and people in need of all kinds of help, the care that the state provides, all these people are suffering because this game is being played.

ALISON ST. JOHN: That's where we are seeing what is being called a gimmick, is that some of that supported or are we right back to where we started? Was it simply a gimmick to get their pay?

MICHAEL SMOLENS: I think that is simply the question that is up to the controller's office to look into the question and decide it. What I find interesting is why n't Brown seek a compromise? For example, Pres. Obama campaigned on the notion of not extending the Bush tax cuts to the wealthiest Americans but at the end of the day to get a budget done and things moving forward he compromised and extended them for a couple years. As John pointed out a lot of people suffering with the budget right now at least he could compromise with (inaudible) and continue the negotiations for long-term solutions.

ALISON ST. JOHN: If you were the governor, what's the compromise you would go for?

MICHAEL SMOLENS: Try and find something in the middle. Let's restore the cuts that we made and maybe get into some of the pension reforms that Republicans want.

ALISON ST. JOHN: The governor has not managed to get Republicans on his side for this vote yet, why should he manage to do that now?

MICHAEL SMOLENS: But the multibillion dollar question most people don't see where you get the billion-dollar ground and we get the votes it seemed pretty hard and fast. John alluded to the vote there's another dynamic Democratic governor versus Republicans that is the big dividing line but you know labor and the state workers are a big interest in this and they don't want the pension reform. The governor has at least talked about what he wanted, they want Republicans (inaudible) the pension reform a spending cap and regulatory reform to help businesses. He has said he is keen to go there. The devil is why they really talking about and is your pension reform that sort of window dressing. But there is a lot of pressure. Some unions don't want to deal because they don't want to see that happen, so that really was going to put him to the test. He is a wily intelligent experienced politician. If you'd like to think anybody could meet the match it would be someone like Jerry Brown on as if that's going to be able to happen. It's a tough knot to unravel.

ALISON ST. JOHN: 888-895-5727 is the number to call. What do you think the governor should do? What you think the legislature should to do? Do you think you would vote if there was a vote to extend the tax increases? So, John you're saying that people are suffering. You think there is a way to pass this budget to avoid even deeper cuts than we already are facing?

JOHN WARREN: I think a few things. I think the Democrats cannot afford to cut anything any more than they've already done and I think the Republicans would push them to do so without any concern because there doesn't seem to be a concern for the people or what is called the entitlement aspect and it is a national Republican attitude really. I think people need to understand that California is not Wisconsin number one, that employees here have suffered, they've had furloughs and given up pay. So this is not big unions. This is actual people who are part of us who are suffering as a result of this foolishness.

ALISON ST. JOHN: The San Diego UT editorial has actually suggested with (inaudible) letting voters decide if they want to pay tax. Perhaps this is counterproductive for the Republicans. Is it just a very extreme number of minority Republicans holding everybody hostage?

MICHAEL SMOLENS: I don't know if it is an extreme minority. They all seem to be on board early on they were simply opposed to putting on the ballot that was before they would even have to vote to extend the taxes that they were being threatened by the Grover Norquist crowd saying voting to put the tax issue on the ballot is violating the antitax pledge and we will take you out of the primary. So that's a pretty hefty political threat right there which they are facing. In the real world that doesn't make sense because most people believe that Republicans on the issues warning the public to vote they would put pension reform on the ballot in a second because I think they know most people would like to ratchet up tensions whether rightly or wrongly there's such interest or concern about the size of the pension so it is unusual. One thing getting back to something John said, let's not forget even if they get the taxes or patch it with this kind of budget if they have to go back to what the governor just vetoed that already make up that in any other era would be devastating and what we are talking about would be double that. And even if they get the best deal they can right now, the pain is going to be something like we've never seen before in California.

ALISON ST. JOHN: Jose, do you think the governor has done a good enough job in explaining to people what the cuts are? If they haven't gone (inaudible) are people really aware of what is at stake here?

JOSE LUIS JIMENEZ: I don't think he's done a good job. I think he's been mired down in Sacramento trying to get the deal done and I think he had an opportunity yesterday in a press conference in Los Angeles but instead he turned to politics and set up Republicans as that the person in the continuing fight.

ALISON ST. JOHN: Michael?

MICHAEL SMOLENS: José brings up a good point that Democrats from the very beginning wanted to frame a worst-case cuts only budget and to give people that kind of information and basically scare them into helping to pressure for the taxes. The governor early on said that doesn't work. Other governors have tried that with the sky is going to fall but the sky is not falling, people do not quite buy it. But his whole notion was in the time (inaudible) when is the right time maybe not in January or February but now we seem to be up against it and he's the one who's really got to do that because that would bring the full attention if he unveiled here is what that cuts only budget would look like it would get a bunch of attention other than something from the Senate leader or simply the speaker.

ALISON ST. JOHN: John?

JOHN WARREN: We started out with a $26 billion deficit. We are down to 9.6 and we've had some increase in revenues and I think there was a revelation (inaudible) revenues are up again. It was the increase in the middle of the upper (inaudible) to bring about academics and even what is good for the governor to get the kind of vote that he would need even if you got on the ballot because people are saying why should we vote for the tax when we are already seeing some movement.

ALISON ST. JOHN: So there is less public support perhaps for the tax.

JOHN WARREN: I think less public support because he wants to take the money and he's not only dealing with the immediate issues but is looking at the whole thing long-term in terms of correcting some things that have not been corrected and people are saying a look we are just focusing on are we going to make it till tomorrow, we are not worrying about next year.

ALISON ST. JOHN: He is still sticking to his guns. He says this is something the voters will have to vote on before he approves a budget but he doesn't seem like he has a big stick to wield over the Republicans except possibly this redevelopment issue which he has not vetoed. Michael what do you think about possibly this issue about redevelopment issues agencies being on the chopping block, as a tool that he could use to get some more help from the Republicans?

MICHAEL SMOLENS: One potential of (inaudible) I think the larger one or clear the ones that Republicans want pension reform or at least a permanent spending cuts in the Constitution and rollbacks, regulations that they think now hurt business. Some are saying that they lose their leverage after July 1. You aren't going to get any of that because the bulk of the budget are patched through a budget like the Democrats just approved they will not get that. So some Republicans are saying this may be the time to go with that tax issue on the ballot because most people think that they will not pass anyway, so what is the harm. It's always a roll of the dice but if you get those three elements in your back pocket that is something I think the governor is counting on for the leverage. The redevelopment thing has been a huge issue here and elsewhere because that could change the face of a lot of central city areas.

ALISON ST. JOHN: Explain what it is the Democrats put on there.

MICHAEL SMOLENS: Thank you. It is a very confusing thing and I don't pretend to understand the details of redevelopment but basically you rejigger so the taxes are collected and redistributed to focus a lot of the tax collection in certain areas, in redevelopment areas and that has enabled San Diego a lot of the downtown that we know from decades ago which was not a particularly pleasant place to be is now a great place to hang out. They are concerned that there are billions of dollars of projects in the future that they would like to do to continue that and not only is it something for downtown and the business interest, they believe it generates jobs, income, revenue and so forth and of course hanging out there is the stadium issue which of course they would need the redevelopment funds if we move in that direction.

ALISON ST. JOHN: So they are different bills but both of them would basically go to the redevelopment agencies?

MICHAEL SMOLENS: I don't know the full details but basically take their money and...John's let's go to John.

JOHN WARREN: A good example here $40 million would be redirected toward education and elsewhere but when you look at the redirecting of redevelopment funds for some areas that are smaller the amounts that would be redirected would eliminate the agencies in themselves.

ALISON ST. JOHN: Would you say that Mayor is correct, John, in calling this extortion?

JOHN WARREN: I don't think this is extortion. And it's important in terms of the projects of the day and I think they will end up in court over this issue. Someone is going to find a way to litigate it. I think there's a lot more as important as redevelopment is to downtown there are still other issues in San Diego and the other issues are being addressed. We are talking about another stadium before we get a library built.

ALISON ST. JOHN: Exactly. José do you think this is the time to talk about ballparks and the convention center expansions when schools are seeing massive job cuts and the classes getting bigger? Is this the time to be preserving redevelopment?

JOSE LUIS JIMENEZ: The reason it's being talked about is that presumably it's going to get done in San Diego, the only way that San Diego voters are going to approve the increase taxes on these things basically the only way they could get this victory of redevelopment funds which could be approved by the politicians and doesn't necessarily have to go to the (inaudible). Mayor Sanders has pledged that he would put this before the voters but at the end of the day you don't need to (inaudible) to go before the voters.

ALISON ST. JOHN: Michael, one of the things that the business community cares about is education so why would they object to send the money going from schools to redevelopment agencies because they know that education is key?

MICHAEL SMOLENS: There is a push/pull and it's not just education but other certain neighborhood interest things that they are being denied tax dollars and so forth. But again I think the broader picture from the business community is that it's better for the larger good that a bit of the rising tide, you focused the taxes in the redevelopment areas, the development generates jobs and income in tax revenue that continue to go to schools as well, but not in the formula that some schools would like.

ALISON ST. JOHN: It' interesting I was reading in the North County Times today that the Escondido city Council says that you can create more good jobs by putting money into education then into for example a big hotel where it is mostly low-paid jobs. John, is it a foregone conclusion that redevelopment will provide better jobs than education?

JOHN WARREN: No and I think when we talk of redevelopment we are not talking about jobs we are looking at what is happening downtown in businesses, housing, all those kinds of things that would get built and yes we need more housing but if you really want to get close, look at who is able to afford the housing once it is built. Even though we have mixed use we have one huge project out there that was built as a condo near city College. I forget how many units it is and it had to be converted, went into bankruptcy and had to be converted to apartments because the developers were unable to move it. So we have the whole impact of the market economy on real estate and development at the same time that we have the state looking at redirecting those dollars. That is more important than education to the people downtown.

ALISON ST. JOHN: A lot of difficult choices. We've got to move on here. Stay with us. Coming up in the next segment of the Roundtable some politicians say how district boundary lines are drawn makes as much difference to politicians in Sacramento as the elections to people. There is a deadlock, is it because of gerrymandering? We talk about how redrawing the district boundary lines could reshape the political landscape. Stay with us.

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