Sacramento Update: Budget Deficit, Governor's Race
MAUREEN CAVANAUGH (Host): I'm Maureen Cavanaugh, and you're listening to These Days on KPBS. Sometimes it seems the legislature in Sacramento is caught in its own version of the movie "Groundhog Day." Is it fair to say that lawmakers are still facing a $20 billion budget shortfall? Or is it more accurate to say legislators are facing another $20 billion shortfall? Either way, we seem stuck in an ongoing fiscal nightmare. But the state legislature continues to search for solutions. We will hear about the swearing-in of the new assembly speaker. And the race for governor is shaping up, becoming a lot more clear on one side, and more competitive on the other. Joining us now with an update on the latest from the state capital is my guest John Myers, Sacramento bureau chief for “The California Report.” John, welcome back to These Days.
JOHN MYERS (Sacramento Bureau Chief, “The California Report”): Thank you, Maureen. Good morning.
CAVANAUGH: Good morning. So, okay, what is the current state of the California budget? We seem to have that $20 billion figure again.
MYERS: Yeah, we have a $20 billion figure pared down a little bit but probably not as much as everybody thought it would be pared down by the end of last week. There was a package of bills that left the legislature last week solving what Democrats estimated was about $4 billion of the $20 billion problem. Much of that solution, though, is in the budget year to come, which is the budget year that begins in July because the $20 billion problem stretches an 18-month span. And that clarification is important because late yesterday, the governor vetoed about half of the amount, a little bit more than $2 billion, saying that the cuts were unrealistic. He said that, furthermore, they were for a budget that hasn’t even been acted – been enacted. Again, that’s that issue of that we haven’t even gotten to the July beginning of a fiscal year. And he said, well, they were recommendations, they weren’t actually deficit reductions. Now, to be fair, part of the reasoning in his veto message that some of the cuts were unrealistic assumptions has frankly been true of about just about every budget the governor has ever put his signature on.
MYERS: All kinds of assumptions that have made budgets balance on paper in years past, and so that’s not terribly new. But this new dynamic of saying, well, we don’t have a budget in place, you can’t be acting on it yet is an odd dynamic. And I think really the bottom line is we’re still looking at at least about an $18 billion worth of solutions that the legislature and the governor need to resolve. We should stress, though, that that’s based on revenue estimates. We’re going to know a lot more about tax data come tax day in April and really what the state has to spend and what we have to do as a result.
CAVANAUGH: Okay, let’s assume that $18 billion figure is somewhat accurate. There was so much cut last time around, what is left for legislators to play around with?
MYERS: Yeah, that’s going to be, you know, really tough to resolve because, you’re right, last year, in 2009, if you step back and think about it, the legislature and the governor resolved what was about somewhere on the order of $65 billion of deficit over two different negotiations in the winter and the summer of 2009. And there was a lot cut. There were a lot of tough decisions made, and there are going to be a lot more tough decisions, obviously, in 2010. I mean, there is a discussion of new revenue. That seems unlikely. The governor seems opposed. Legislative Republicans continue to be opposed. The question then is how much spending can be cut, how much of it can be deferred, how much of it can be maybe transferred in ways that, again, look like they solve the problem on paper and some of that is a – you know, is a dodge, to be fair, of lawmakers. Some of it is lawmakers who are saying, you know, let’s not doing something that we can’t recover from when the economy comes back. I mean, some of the cuts that are being proposed sometimes would eliminate programs in such a wholesale fashion that it would be very difficult to start them back up when good times come back and so there has been this notion of, you know, can we just kind of bridge the gap, can we, you know, just, you know, hold on until things get better and then we can try to figure out what to do. That, I think, is going to be one of those big themes about are we doing short term or long term fixes this year.
CAVANAUGH: Right. So a lot of the problems facing the legislature is not new but there are some new faces at the head of the legislature, especially the California Assembly. There’s a new Speaker, and his name is John Pérez. What can you tell us about him?
MYERS: Well, Speaker Pérez, most notably, I think, is a freshman. This is his first term in the legislature. He’s running for his first reelection here this fall, and that’s not the norm, at least it was not in California history before term limits. I mean, obviously the role of Speaker was someone who had amassed an amount of power and an amount of experience to lead their house. Fabian Nunez from Los Angeles was – pretty much broke the mold of the freshman Speaker back in 2004 and so John Pérez, I think, is going to be very similar to that. The biggest advantage that Democrats thought in, I think, in electing Pérez because of that is that he has the potential to be Speaker for about five years, which in the term limits era, is as long as anyone has been Speaker. That was Nunez’s case, as well, almost. Go ahead. I’m sorry.
CAVANAUGH: No, no. I was just going to point out that both Speaker Pérez and Senate President Pro Temp Darrell Steinberg are both not termed out until 2014 so it might – it sounds like the Democrats could have this power structure in place for quite some time.
MYERS: Yeah, and I think that would be a very fascinating dynamic to watch, especially as a new governor comes in in January, Republicans have turned over some, and there will be this institutional memory at least again in the post-term limits era in the Assembly and Senate of the leadership there. And Pérez is an interesting guy. I mean, he has a labor background which some conservatives will say, ah, that’s automatically a disqualifier but he’s also talking about jobs, he’s talking about stimulate the economy, even some good government people like some of the ideas. He made a little hat tip towards reform last week where he said there’ll be no texting between lobbyists and lawmakers on the floor. I’m not sure how you implement that with cell phones these days or how you enforce it, I should say.
MYERS: But Pérez is an interesting guy and I think, again, you’re right, that dynamic with stable leadership among the Democrats will be fascinating to watch.
CAVANAUGH: Now, as I said in the opening, Jerry Brown made his official announcement last week that he is running for governor. You talked with Jerry Brown last week. I wonder, what are some of the main themes of his campaign?
MYERS: Well, I think that, you know, the great question for Jerry Brown and for voters with Jerry Brown is what Jerry Brown are they voting for? Or what one are they considering to vote for. I mean, you know, he has a track record that is longer than we could even get into, it’s 40 years in politics. You know, Brown said in his announcement video that he has an insider’s experience but an outsider’s mind, and I asked him what in the heck that meant, you know, when we sat down. And he goes back to part of Jerry Brown’s history as one-time training to be a Catholic priest, as a Jesuit, and he said he was always taught to be in the world but not of the world. And it’s an interesting distinction because I think he sees himself as a, you know, someone who is here and knows what’s going on in government, what needs to be fixed, but he’s not of it, he doesn’t consider himself an insider that way. Whether the voters can split that out or not is another issue, I think. But I think he’s going to run on that experience theme. I think he is – he’s dedicated about the issue of taxes unless the people vote for them, which may not be popular in the Democratic Party, and I’d also think there’s going to be a bit of populism in the campaign about the evils of corporate America, especially if his challenger becomes Meg Whitman on the Republican side, who was a CEO.
CAVANAUGH: Absolutely. Tell us a little bit, if you will, about the Republican candidates, Meg Whitman and Steve Poizner. We’re already starting to see their ads on TV. I wonder, what will be the focus of the Republican primary? Do you see that shaping up as really sort of brutal?
MYERS: Well, possibly. I mean, right now if you believe the polling, this is a one-way race and Whitman has a lead that has been as big as 30 points in some of the polls. And some of that reflects the fact that she has spent an enormous amount of money on radio ads and now television ads. And Poizner, who also is independently wealthy has not been spending money to that great extent. So, I mean, right now it’s difficult to see this as a competitive race. I think the real Republican race for governor comes down to this issue of who is a real Republican, who can fix the state? This notion of consistency of beliefs through the years is something that Meg Whitman has been pushing Steve Poizner on because one of the things that a lot of people don’t know about Poizner, who is the insurance commissioner, is that he ran for the State Assembly from the Bay Area, from the south Bay Area near San Francisco in nineteen – in 2004, excuse me, and in that race he sounded a lot more moderate to liberal than he does on the Republican stump about abortion rights, about taxes in some instances. And the Whitman campaign is just really trying to hammer him with that. Then at the same time, Meg Whitman doesn’t have a record of anything, so it’s really kind of hard to pin her down on a lot of things. So I think consistency of beliefs and, really, who has the vision to lead the state, and Republicans have to resolve this in the wake of Arnold Schwarzenegger, you know, what does his legacy mean for Republicans. And then who can beat Jerry Brown, I think that’s really their question, too.
CAVANAUGH: What do you think, if it is, not to count out Steve Poizner too soon, but if it is a Whitman-Brown race, what do you think the governor’s race will come down to?
MYERS: You know, a lot of folks are wondering that and, obviously, we’re going to have to get a little closer to it to really get a good feel. But right now, if that race was happening, I think it would be the experience versus the newcomer, what is the best solution for California’s unbelievable systemic problems, experience of knowing what you’re doing or an outsider who doesn’t – who can look at it with a fresh set of eyes? And, you know, even the polling seems that Californians are somewhat conflicted on that. They see the merits of experience but they don’t want a career politician and Jerry Brown’s going to have to deal with that. And they like the fresh ideas but they don’t want someone who doesn’t know what they’re doing and that’s another issue that Whitman’s going to have to deal with because some of her ideas so far really don’t have any real details on it. She talks about cutting 40,000 state workers, but she hasn’t really showed us how you get 40,000 state workers, for example, out of the government payroll. So I think experience versus newcomer, and it will be an unbelievably expensive race. I mean, I think either way but especially with Whitman, who has said she’d spend upwards of $150 million, probably of her own money, most of it, to try to run that race, Jerry Brown’s going to have to have a lot of backers awfully quick to pony up some money.
CAVANAUGH: I’m speaking with John Myers about what’s going on in Sacramento. He is Sacramento bureau chief for “The California Report.” You know, just quickly, John, what’s the lastest on Governor Schwarzenegger’s devotion to Senator Abel Maldonado? He wants to perhaps push him again to become the next Lieutenant Governor of California?
MYERS: Yeah, what I called a bro-mance in my…
MYERS: …my blog, exactly. Yeah, the soulmates as Arnold Schwarzenegger said with this somewhat moderate Republican from the central coast who he’s picked to be lieutenant governor. That nomination’s been in limbo. People may remember that it didn’t make it through the legislature completely on its first go-around. The governor renominated Maldonado. It’s tough to say. There are some – there is some chatter that possibly the Maldonado nomination will get a more favorable treatment in the Assembly, where he ran into trouble, next month and one of the reasons, if you believe the way of politics, and some people maybe hear this and just roll their eyes about politics, but there – but Maldonado’s seat, if I can tell you quickly, Maldonado’s seat…
MYERS: …on the central coast, his Senate seat, is a competitive district. It is a district the Democrats think they might be able to pick up, which would mean they are one vote closer in the State Senate to passing budgets without Republican votes. And so they would really want that seat but their best chance to get that seat is if the Democrat gets to be on the ballot in November. Well, a special election if Maldonado becomes lieutenant governor makes that difficult unless Maldonado doesn’t take the lieutenant governor’s job until April, the special election is called to consolidate a runoff in November, the Democrats get the upperhand. That is the way that things happen in politics a lot of times…
CAVANAUGH: I see.
MYERS: …is you’re looking three or four steps ahead and the Democrats who may not want to give a Republican the job of lieutenant governor may give it to him if they think they can get an advantage at the polls in November to fill his seat and to bring another Democrat to Sacramento. And so that’s that real calculation that’s going on, I think.
CAVANAUGH: That’s the way of politics.
CAVANAUGH: Before we leave this off, John, I just want to go back to the budget conversation because it seems that a big part of the budget debate this year will circulate about – around how much money is spent on K-thru-12 and higher education in the state and it sounds like the battle could pit education advocates against social service supporters. How do you think that’s going to play out?
MYERS: Well, I think that’s a battle that none of those groups want to have but when you just look at the simple math of the budget—and I think this is the part that voters have to wrestle with as well—when you take K-thru-12 education, that’s about 40 cents of every dollar we spend and that’s the single largest amount of the budget. If you add in higher education, you’re getting almost close to 50 cents of every dollar we spend. If you take social service programs, that’s about another 30 cents. You’re now at 80 cents of almost – So those are the three issues. I mean, K-thru-12, higher education, social service programs. So how do you keep all of those programs intact when you don’t have any money? And I think that’s going to be a really, really tough thing to resolve. The education groups are mounting a campaign now about rejiggering the voter approved formulas under Proposition 98 about saving money there. They don’t like that. Social service people say you’ve already cut us to the bone last year, you can’t do that. We saw those massive protests about higher education, and all the lawmakers have said, oh, no, we support higher education. I don’t know. I mean, I think that is the great question. Those three areas are the vast majority of spending in the state budget. How do you fix a problem if you don’t touch those?
CAVANAUGH: Well, John, it sounds like we’re going to be checking back with you later on that. Thank you so much for speaking with us.
MYERS: My pleasure, Maureen. Thank you.
CAVANAUGH: I’ve been speaking with John Myers. He’s Sacramento bureau chief for “The California Report.” If you’d like to comment on what you hear on These Days, go online, KPBS.org/thesedays. Coming up, a uniquely San Diego kind of therapy: surf rehab for injured veterans. That’s as These Days continues here on KPBS