Calif. GOP Claims Win In Holding Out Against Taxes
SACRAMENTO (AP) — Republican lawmakers are claiming victory after the state budget passed last week without a single GOP vote because the plan did not include the Democrats’ top solution — a renewal of the higher income, sales and vehicle taxes approved two years ago.
But not every conservative is popping a bottle of California sparkling wine in celebration: While they held fast to their no-tax pledge, GOP lawmakers also lost a historic chance to secure their top priorities: scaling back state employee pensions; imposing a state spending cap; and making business-friendly changes to California’s regulatory and environmental laws.
Republicans hope to pin the blame for massive spending cuts to social programs and higher education on Democrats, while claiming credit for holding the line on taxes. Assembly Minority Leader Connie Conway, R-Tulare, stressed that the budget was “not ours.”
“They’re the ones that chose who got cut. They are the ones that made their priorities, and so if people are suffering and hurting, they need to contact the people that did that to them,” Conway said this week during an event to celebrate the expiration of a 1 cent addition to the state sales tax and another hike to the vehicle tax. “Our agenda was to put the money back in the taxpayers’ pocket.”
The majority vote budget came after Gov. Jerry Brown, a Democrat, conceded defeat in his attempt to persuade a handful of Republican lawmakers to support his plan to ask voters to extend for up to five years temporary increases in the sales, income and vehicle taxes.
In exchange for their votes to put the measure on the ballot, Republicans had hoped to put their own reform proposals before voters. But after nearly six months of negotiations, the two sides could not reach a compromise.
Instead, the deal Brown reached with Democratic legislative leaders contained billions of dollars in cuts to social programs and public universities and colleges, programs Democrats hold dear. They are assuming billions more in additional tax revenue than was forecast in January, but also built in immediate cuts if that money fails to materialize.
Union leaders and Democrats hope that as the deep spending cuts take effect, Californians will feel the impact and public opinion will shift toward supporting tax increases they hope to put on the ballot in November 2012. Those could include higher taxes on the wealthy and taxes on companies that pump oil in California, but there are no specific proposals yet.
Republicans could be saved by a rebounding economy. The Democratic budget relies on $12 billion more in revenue. If that is realized, voters might be reluctant to raise taxes, as public opinion polls suggest they are.
Yet any rollbacks to public employee pensions might now be left to Brown and his fellow Democrats in the state Legislature, leading to reforms that are far less sweeping than those sought by Republicans.
“We were prepared to go to the table and negotiate in good faith on a pension-reform package. We believed that a legislative package could be put out that addresses the voters concerns’ about spiking and things like that and closed loopholes … a reasonable package,” said Dave Low, president of a coalition of unions called Californians for Retirement Security.
“The Republicans appeared to not want to support any reasonable package. They missed out on their opportunity to have a voice in this process, and now they don’t.”
Gary Toebben, president of the Los Angeles Chamber of Commerce, also feels it was a missed opportunity. His group supported Brown’s proposal to extend the temporary tax hikes in exchange for structural reforms.
“The Republicans are calling it a victory because they believe that not extending the taxes, the higher tax rates, was good for the average Californian,” said Toebben, a Republican. “Our feeling is that the cuts that had to be made in order to balance the budget will long-term negatively impact K-12 education and higher education, and that’s a long-term investment.”
He said the state needs excellent schools and universities to be competitive.
So can Republicans count the budget as a win, loss or draw?
Thad Kousser, an assistant professor of political science at the University of California, San Diego, said the GOP successfully leveraged its only remaining legislative power by letting temporary tax increases expire on July 1.
“They were able to get nearly exactly the same kind of all-cuts budget they would’ve got if Meg Whitman had won the governor’s race,” he said, referring to Brown’s Republican opponent in the 2010 gubernatorial race. “In some ways, they got the best of both worlds. They got the policy they wanted, trimming government, without having to take the political heat for it.”
The GOP lawmakers’ mistake may have been in not agreeing early in the year whether they wanted to negotiate with Brown, many moderate Republicans outside the Legislature believe. In the end, just a handful of Republicans in the Senate ever entered serious talks with the governor.
Instead, Republican lawmakers offered conflicting messages and failed to lay out exactly what they were seeking in exchange for the votes Brown needed to call a special election.
Mitch Zak, a Republican political consultant who supported GOP lawmakers meeting with the governor, said Republicans should have laid out specific policy proposals on pensions, state regulations and a spending cap soon after Brown released his initial budget proposal in January.
Doing so would have forced Brown to publicly reject their plans or go against his powerful union allies, he said.
“Had they had that attitude at the beginning, I think they might’ve had some luck in getting the governor on their side. But there’s one big stumbling block that we can’t forget: The unions kept saying we don’t want to vote on pensions and spending limits,” said Joel Fox, a Republican consultant and editor of the Fox & Hounds Daily blog.
Fox was among Republicans who had urged GOP negotiations over the governor’s tax proposal.
It may be difficult to tell how voters respond to the Republicans’ approach this year.
The GOP has seen its clout in California fall, along with registration that is now below 31 percent, compared with 44 percent for Democrats and 20 percent for independents. Next year’s elections will be held under new legislative districts being drawn by an independent commission and the first widespread use of California’s new top-two primary system.
“They feel that they have raised their standing with the voters,” Fox said. “The trouble is, the test is going to come a long time after this budget decision is put to bed.”
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