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Can Governor Solve California's Budget Problems Without New Revenue?

Can Governor Solve California's Budget Problems Without New Revenue?
Governor Jerry Brown's hopes for a special election are fading fast. State Republicans refuse to support Brown's proposal to put tax-extension measures before the voters in June. We discuss whether the tax measures can be placed on the ballot without GOP support. And, we'll talk about what the state budget could look like without additional revenue.

Governor Jerry Brown's hopes for a special election are fading fast. State Republicans refuse to support Brown's proposal to put tax-extension measures before the voters in June. We discuss whether the tax measures can be placed on the ballot without GOP support. And, we'll talk about what the state budget could look like without additional revenue.


Michael Smolens, government editor for the San Diego Union Tribune


David Rolland, editor of San Diego CityBeat

Scott Lewis, chief executive officer of

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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.

TOM FUDGE: Mr. Smolens let me. Why did the governor break off budget talks with state Republicans?

M. SMOLENS: Well, Tom, first if I could take a little diversion her I would like to give a shout out to Gloria Penner. We all miss her and hope she is coming backing soon because we love her questions that take us down some interesting paths. As far as the budget the governor just felt that the Republicans kept adding on more demands and even on the ones they were really negotiating on such as pension spending cap and regulatory reform, they were way too far apart and I think Senate President Darrell Steinberg they were trying to run out the clock. The Republicans don't view that, they just don't think the governor and Democrats were serious enough in terms of the real reforms they were looking at. So right now what the governor is going to do we find out is go on the road to sell his plan, and I think what they are going to do is start ramping up what an all cuts budgets would like. In Sacramento they call this the parade of pain. A lot of cynics view that as a annual ritual. But I think given the size deficit 26 billion out of a general fund of 84 85 billion, the parade of pain is going to be very real So he's hoping to sell Californians on the fact that the need this and pursue a ballot initiative.

TOM FUDGE: One thing I want to ask you about is the business of getting a two thirds vote in order to qualify a special election on taxes. Now Democrats are saying maybe we don't need that two thirds vote after all.


M. SMOLENS: The governor early on precluded the simple majority, that was always open to debate. There was always a legal question and he set the marker down figuring they needed the two thirds vote to avoid a legal battle and further to sell it to the public, should they get on the ballot, they needed some Republican buy in, at least for an election. He felt that moving ahead on a simple majority even if it was legal, which he doesn't quite believe it is, would be problematic on a number of fronts. But I think all options are open in that regard.

TOM FUDGE: So there is nothing in state law that says you absolutely have to have a two thirds majority to qualify.

M. SMOLENS: I won't go there. Some believe there is and obviously there is some dispute on that.

D. ROLLAND: The way I understand it is some Republicans, one Republican or multiple Republicans went the legislature's lawyer and asked for a legal opinion and got a legal opinion that said that it was indeed legal that there is sort of an end run around the requirement.

TOM FUDGE: This was a question that Republicans asked?

D. ROLLAND: I believe so that is the way I understand it. The people I read who cover this on a daily basis have reported that. But the other day when Governor Brown came out with his statement on the halting of negotiations with Republicans, he said flat out that he believes it is not constitutional to do an end run around the two thirds requirements. So he absolutely shut the door on that

TOM FUDGE: Let's see, Scott Lewis what would you like to say about this.

S. LEWIS: I think what we are seeing play out is a parallel of what is happening locally in San Diego, but also federally too. Attention, particularly among Republicans about those who are working and willing to negotiate and those who are in for the fight and they want a fight and see the fight continue. What Jerry Brown is complaining about is a perpetual moving tart. That is what people locally have complained about. At what point have we reformed enough that we can consider a comprehensive recovery package of some sort. On the other hand, you have Republicans protecting things like redevelopment spending. They have gone to the mat to protect that and made sure that he doesn't get the votes to cut spending in that area. It's them being concerned about certain types of spending as opposed to overall the size of government and subsidies.

TOM FUDGE: By the way Michael when we are talking about these negotiations with Republicans, and let's say Jerry Brown makes a deal does that deal on say pension reform say then go to the voters or just become law

M. SMOLENS: That is part of the dispute. The Republicans would like to pension reform before the voters. I think the governor late yesterday he introduced legislation to get the ball rolling on his view of pension reform. There are still big differences there. That is one of the issues.

D. ROLLAND: It's interesting because the Republicans he was dealing with were not the leadership. They're under great pressure by the conservatives who don't think putting a tax issue before the voters is the thing to do. What is interesting is they are being politically threatened not only within California, but you have Grover Norquist's operation that's kind of come in and said they will get them office if they even go to the ballot on this, much less support the taxes.

S. LEWIS: The Republicans say that these taxes probably won't pass on a ballot. What I don't understand is why don't they come up with as many concessions as possible, get the governor and the legislature to enact them and they still don't get the tax cut. What that indicates to me is their desire to keep fighting and be seen as fighting that system.

TOM FUDGE: What some people have written about this is that the Republicans may be further marginalizing themselves as a party. Here they have a opportunity to make a difference and get something done, and they just won't budge. David do you want to comment on that?

D. ROLLAND: It's important to note, taking it back to something Michael said he talked about 26 billion dollar deficit that was what it was before a couple weeks ago when the Democrats actually on majority votes, the Republicans did not offer a single vote in favor of cuts. They cut about eleven billion dollars out of that 26 billion dollar deficit already. So this parade of pain that Michael talks about it's already cut by 11 billion dollars but they still have another 15 billion dollars to go and those cuts will be absolutely devastating. It will be poor people, students, elderly people, kids. And the Republicans from my view they are hypocrites on this issue. Republicans aren't they always saying choice, we want voters to have a choice. They won't let the voters have a choice in the matter. The Democrats have already conceded 11 billion dollars on cuts. Democrats don't like to cut budgets. They have already conceded.

TOM FUDGE: The Republicans say we gave people a choice two years ago. Am I right? The same set of options were given to them two years ago.

D. ROLLAND: And now we have a new choice two years later. Circumstances are different. And the Field Poll came out a couple weeks ago that said at this point in time according to their poll voters would approve the extension of these tax. Before a couple years ago it was to raise taxes no it was to extend, so it was the same thing. But circumstances are different. Now we have a much bigger deficit. We have already cut 11 billion dollars and Field Poll says even Republicans, according to the poll, wanted to be asked. Republicans wouldn't necessarily vote yes, but they want to be asked the question.

TOM FUDGE: Dave Rolland is editor of San Diego City Beat, my other guests on the Editor's Roundtable are Michael Smolens government editor for the San Diego UT, and Scott Lewis chief executive officer of

We have a couple of callers. Let's hear from Joe in Laguna Beach.

JOE Thanks for taking my call. I wanted to note I think Governor Brown is absolutely doing the right thing. I think it's comparative to what is going on the larger stage politically nationally. I think Republicans on the national stage are more interested in Obama's failure just as in our state they are more interested in Governor Brown's failure. I think Governor Brown needs to hand tough. I think California is as blue as the sea. And elections have consequences. There wasn't a Republican elected statewide during the last election, and they're demanding all these concessions which are ridiculous.

TOM FUDGE: Thanks very much for calling. And Michael Smolens would you like to respond to that?

M. SMOLENS: That gets back to something my colleagues have said. The Republicans did have an opportunity to get a lot of ground here that they might not otherwise on issues like a spending cap and pension changes. There may be some actions in those areas but it will be done by Democrats it looks like unless something changes. This has been the recent history in the last couple of decades o the California Republican Party that they would rather be purist than. Look what happened just last year. It was a Republican trend everywhere but here. It's going in the opposite direction

TOM FUDGE: Where is here?

M. SMOLENS California. As the caller mentioned, there are no statewide office holders that won election that were Republican. So I think they are facing a potention problem in that regard and they are going to be potentially out of the discussion. Are they going to hope there is so much pain that will bring them back into power. That is certainly a roll of the dice. The blame is often spread around pretty generously when these things happen.

D. ROLLAND: Mike makes a good point when he says whatever happens now will be the Democrats who have done that. Some Republicans have come out and said Democrats control the government the budget deficit is their problem. I believe they're get further marginalized, they're not going to share in any the solutions as we've talked about, and importantly, the Governor Brown the other day came out with a twelve point plan on pension reform. If he can get some traction on that he has taken away a Republican issue.

TOM FUDGE: Jerry is in Banker's Hill. Jerry you are on the Editor's Roundtable.

JERRY: You have been discussing around my question which is what is the Republican's excuse for not allowing California voters to vote? And I hope Republicans are calling their representatives and demanding that they have a choice.

TOM FUDGE: We don't have anyone here who can speak for the Republican Party unfortunately, so I don't know if we can answer your question.

M. SMOLENS: I think we touched on it that they are looking at past elections '09 when voters did reject these same taxes. David is right that circumstances change. We have elections every two years and how President Obama would fare on a ballot today compared to when he was elected would be quite different, I'm sure. The reality of it is that there are philosophical differences about even putting taxes on the ballot from Republicans. But also there is real political concerns that it's no longer just do you support taxes but the support for a ballot measure to put taxes before people is tantamount in some views to approving taxes, and therefore they would be opposed by the Republican Party.

TOM FUDGE: You are listening to the Editor's Roundtable on KPBS. We need to take a little break. When we return we will talk about the state budget thing a little bit longer and after that we'll talk about some big news in San Diego regarding medical marijuana. Stay tuned we'll be back in a minute.

TOM FUDGE: I'm Tom Fudge. You are listening to the Editor's Roundtable. Our guests are Michael Smolens, government editor for the San Diego Union Tribune; David Rolland editor of San Diego City Beat; and Scott Lewis, chief executive officer of Callers if you want to take part in the conversation (888)895 KPBS. Let me go to you Scott Lewis. I know you wanted to follow up on the previous conversation about what the Republicans want and what is going on here.

S. LEWIS: I implied earlier they were going for a fight. They wanted to continue being seen as fighters against taxes and that's their electoral strategy. You have to remember there are some intelligent and more rational ways to view what they're doing. Talk to somebody like Assemblyman Nathan Fletcher. He told me the other day he'd gotten inspiration from the unlikely source of Rahm Emanuel, the new mayor of the city of Chicago who had said America is facing a crisis and we need to take the opportunity to change the way we do business. He would argue that that's the way they see this opportunity right now. It's a challenge, everybody's screaming, there's a lot of pain but perhaps we could redo the entire way that we structure revenues, run the state government. And to a certain extent that;s what Jerry Brown is doing. The realignment package of providing more power to counties and less power to the state is interesting. But there is a chance to do more comprehensive reforms to the way the state does business and to the extent they are advocating for that it's a valid stance.

On the other hand they need to lay it out, draw the line, say this is what we want to get to; get there and we'll go on and talk about recovery.

TOM FUDGE: When you say lay it out, you mean present their own budget?

S. LEWS: Yeah. They've never done a full budget of how they're going to cut that 15 billion. They haven't done a comprehensive realignment strategy for the state government. They just keep saying we've got to do that, we've got to do that. If you are going to keep opposing these alternatives that have been comprehensively laid out by the Democrats and the governor and then you are still going to oppose things like cuts to redevelopment and what not. What is your plan? Are you really against government spending or just the kind that goes to your friends?

TOM FUDGE: Lori Saldana member of the California Assembly is on the line. Go ahead Lori.

L. SALDANA I went through six of these budget cycles and one the voters did approve the tax increases in a special statewide election two years ago. But Schwarzenegger put a sunset clause and that is what we are voting on to extend the taxes that were approved two years ago for another period of time

M. SMOLENS: They weren't approved by the voters.

L. SALDANA: We had a special election in 2009 and they approved these taxes. And we also negotiated additional taxes at the time but Schwarzenegger sunsetted those things. That's what we're are up against, the sunset that Scharzenegger put in place to kick the can down the road. We have done tens of billions of dollars in cuts over the last six years. These are not cuts coming out of healthy budgets, these are cuts on top of devastating cuts to health and human services, education, and the kind of things we need more than every because of this ongoing economic situation. To put it in perspective, these cuts are on ton of another billions of dollars we already had and that's what makes them so exceptionally painful right now.

TOM FUDGE: Laurie thank you very much. Any last word from any of the editors on this?

M. SMOLENS: What she said these cuts being on top of cuts. We have been all writing stories about the impacts to the budget which seem to be devastating to schools and whatever. That is under the Brown budgets with the tax extensions. We have not weighed into what the all cuts budget would be and I'm sure Democrats are hoping that will open some eyes and change some minds.