Lawmakers Will Miss Deadline Today as Budget Talks Continue

SACRAMENTO —  Despite all the talk about how much has changed in the Capitol since the recall, at least one thing will remain the same: For the 19th year in a row, the constitutional deadline for lawmakers to pass a budget will come and go today without that happening.

Legislators acknowledged Monday that the date will once again pass them by. They promised, however, that an agreement is just around the corner and will be reached by the July 1 start of the fiscal year. That’s the day government services can begin to shut down if a spending plan is not in place. Lawmakers have taken to calling it the “real” deadline.

While a frenzy of fiscal negotiations between a select few went on in back rooms, more time was spent debating lowering the voting age on the Assembly floor than on how the state should spend its money.

“Everybody’s got a calendar in their office and they know what the deadline is,” said H.D. Palmer, spokesman for the state Finance Department. “Everybody understands it is not going to be met. The question is how to get a responsible budget done in a responsible manner. You can expect the governor to be extremely focused and extremely engaged in that.”

According to Assembly Speaker Fabian Nunez (D-Los Angeles), Republicans and Democrats are some $1 billion to $2 billion apart.

For a state with a $103-billion budget, it’s not much of a gap.

“We’re talking horseshoes here,” said Fred Silva, a budget analyst with the Public Policy Institute of California. He said the deals the governor has brokered with school groups, local governments and others in which they accept cuts now in return for promises of protection later have left little to battle over as the budget season comes to an end.

And with polls showing the governor winning the approval of as many as 65% of likely voters and legislative elections coming up in the fall, all indications are that majority Democrats will work with him to get the budget done. They long ago abandoned plans to fight for a tax increase, and the $15-billion bond that voters approved in March will preserve -- at least for this year -- many of the programs they want to preserve.

The sticking points for Democrats are mostly in places where they believe the public will come down on their side.

They include fighting the governor’s proposed cuts to higher education that would divert 7,000 qualified students from the state’s public universities this year. Democrats also plan to resist a cost-of-living increase and cuts in home care for the aged, blind and disabled.

Democratic leaders were in private talks s with the governor over those issues on Monday. They expressed confidence that some of the money will be restored. Administration officials have hinted the governor is willing to give a little in those areas.

Democrats are also refusing to heed the governor’s call for the Legislature to take away several hundred million dollars in pension benefits and promised raises for government employees.

Nunez said that instead of calling on lawmakers to support breaking contracts or otherwise antagonizing state employee unions, the governor should negotiate a pact with them himself.

“We are very supportive of the governor opening the contracts,” he said. “But we are not going to delete budget figures irresponsibly to make a point.”

Administration officials, however, say it is up to the lawmakers to take action.

“The Legislature has the authority right now to go in and act to prohibit those state employee raises that have been negotiated with the previous administration from going into effect,” said Palmer.

There is, however, one major issue both sides are ready to agree on: that the state should borrow billions of dollars to make it into next year.

The borrowing will allow the governor and the Legislature to get a spending plan in place by the end of the month. But it will also give California the dubious distinction of being one of the few states in the country that would still have a multibillion-dollar deficit next year.

“We’re almost certain to have a deficit even two years from now,” said Stephen Levy, director of the Center for the Continuing Study of the California Economy. “And most states should be in a pretty good position by then.”

There is also another kind of borrowing in the budget. It’s the kind that involves lawmakers and the governor overestimating the money that can be generated from various proposals.

Few in the Capitol, for example, believe the administration can generate $450 million by directing the bulk of punitive lawsuit damage awards from civil trials to the state.

Most every legal analyst who has looked at the issue has said it would be nowhere near that.

But all sides support putting the inflated number in the budget.

And lawmakers are dubious about the governor’s promise to save more the $400 million by renegotiating contracts with state workers. Or $1 billion by lowering the state’s contribution into their pensions.

But those numbers, too, are also likely to appear in the final budget.

“I think there is a real desire to try to get a budget done by the 30th on both sides,” said Assemblyman Joe Canciamilla (D-Pittsburg), a fiscal moderate who has been critical of his own party’s handling of the budget. “And if that means looking the other way when some of these figures get bandied about, that’s what is going to happen.”