The Hangover

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My Head Hurts, My Feet HurtsBy now, most of us who lived through the saga that resulted in a package of proposals to resolve the state's budget deficit have recovered.

But in the same way you'd clean up the beer bottles, empty the trash, and try to piece together what you remember after a raucous bash, it's worth sifting through the deal making, the politics involved, and maybe a few of the lasting impressions that culminated with the events of the 20-plus hours between Thursday evening and Friday afternoon.

All HUTA All The Time: While the entire plan to take money from local government was this deal's most thorny issue, no part caused more of a ruckus than the effort to take the local share of the Highway Users Tax Account, known in Sacramento-speak as "Hootah." Dramatic moment number one came when HUTA was dying in the Senate, and the leadership pulled a rabbit out of a hat: a bill that wasn't listed on the rundown of legislation to be considered that night, a bill that switched the $1 billion HUTA deal from a simple taking of cash to a 10-year loan to be paid back at $200 million a year. Sources say the proposal originated with Republican legislators trying to find some way to avoid the lawsuit all but preordained from cities and counties. In the end, it still wasn't enough. But first, dramatic moment number two...

Hello, John? Sorry to Wake You: When all the votes had been tallied in the Senate for the second of two HUTA-related bills, the chamber sat at a 20-20 tie. Immediately, the sleep deprived and slaphappy chamber began yelling for someone to go call the actual President of the Senate -- Lt. Governor John Garamendi. The Lite Guv is the only one who can break a tie in the upper house, and immediately everyone began wondering how long it would take to get Garamendi dressed and up from his Delta home in Walnut Grove (a 20 minute drive, most guessed). The actual leader of the Senate, president pro tempore Darrell Steinberg certainly wasn't going to call Garamendi in the middle of the night for this. Sharp folks inside the chambers remembered that the last Lite Guv to break a tie was Gray Davis in 1996, voting to kill a bill banning the recognition of same sex marriages performed in other states. But what made this one all the more interesting for a time was the fact that Garamendi had an interest in the outcome of all of the night's actions, because he's now running for Congress and one of his chief competitors was in the chamber: Sen. Mark DeSaulnier (D-Concord). DeSaulnier had voted 'no' on the HUTA deal, and actually stayed away from voting for much of the deficit package that wouldn't prove popular in a hotly contested Democratic congressional primary. In the immediate aftermath of the tie, Steinberg asked two of his fellow Dems to go seek out DeSaulnier in hopes of getting him to 'flip' his vote. DeSaulnier, however, probably would have relished seeing Garamendi come in and cast the vote himself on an unpopular raid of local funds. In the end, neither scenario happened: Sen. Ellen Corbett (D-San Leandro) switched her vote, and the HUTA deal was on its way to the Assembly.

HUTA Drama, Take Three: The HUTA deal was the gift that kept on giving in the drama department. It landed with an ugly thud in the Assembly, where after much behind-the-scenes gnashing of teeth it became clear it was DOA. Once Governor Schwarzenegger sent word that he'd sign the deficit package without the $1 billion in HUTA cash, it was removed. It should be noted that cities around the state were lobbying hard to kill the HUTA deal, and are partly to credit for killing it.

The Ol' Grenade Toss: Countless budgets have been approved in Sacramento after one chamber cobbles together the necessary votes, tosses the ugly mess over to its counterpart, and then promptly adjourns... leaving one of two choices for the new holders of the grenade (or, in some circles, 'stinkbomb'): pass it warts and all, or allow the budget to explode and the state to be stuck. Friday saw the latest chapter in this sometimes friendly/sometimes not dynamic when Assembly Republicans balked at having to put up votes for the plan to guarantee a supplemental $9 billion for public schools, the issue that had stalled the deal between leaders for several days. They wanted the proposal to be a majority vote bill, meaning Democrats could do it all by themselves. But the bill wasn't drafted that way, and even though some in the Senate knew in the early dawn hours that the Assembly GOP wanted a new version to be considered... the Senate adjourned and made the proposal a take-it-or-leave-it deal. "We were under the distinct impression that we would have the option," said Assembly GOP Leader Sam Blakeselee after adjournment on Friday afternoon.

Bubbling Crude: In a similar 'I Don't Care What the Senate Did!' kind of fashion, Assembly Democrats scuttled the plan to authorize a new offshore oil drilling operation on the coast of Santa Barbara County. The bill okaying the project known as Tranquillion Ridge was one of the last considered by the Senate, and thenonly after it had been modified to hopefully assauge some of the concerns of environmental groups. But it still wasn't enough for Assembly Dems, and it failed by 11 votes in the lower house. It was interesting to see Democratic staffers attempt to dismiss the oil drilling fracas as big news, saying it only amounted to $100 million in solutions, after all. That's normally a reasonable argument for a general fund budget of about $88 billion; but remember that this deal required a a measly $8 million cut to the budget for state parks to help balance the books, a cut that will result in the closure of as many as 50 parks. This was a 'loose change in the sofa cushions deal,' to be honest. In that light, the oil drilling rejection was a big deal, thank you very much.

The Blue Pencil: Governor Schwarzenegger told reporters that he'd use his line-item veto authority to scratch enough spending in the plan for the state to be left with some kind of reserve. That's because the rejection of the HUTA and Tranquillion Ridge meant the plan would result in a small deficit still remaining, and a zero reserve left in the event of more problems.
Schwarzenegger's Post-Budget News Conference (July 24, 2009)
"We're going to comb through the numbers," said the governor on Friday afternoon, "and try to come up with cuts that are responsible and that are necessary under these new circumstances." But no one knew what those would be; Assembly Speaker Karen Bass said she had not made any agreement with Schwarzenegger about cuts acceptable to Democrats. And some wondered about exactly how much authority the governor has in this case; after all, this was a budget revision, not a budget enactment.

Murder By Numbers: If there's anything that will remain perplexing and (if my newsroom is any indication) debated long after this deal is signed into law, it's the lack of clarity about the size of the problem. The state ended up with a $23 billion deficit solution, even though Governor Schwarzenegger dubbed it a $26 billion problem weeks ago. And all along, there was some pretty marginal math done by the mainstream media in accepting numbers at face value. The reality is that Schwarzenegger's first proposal included a $2 billion reserve... a prudent decision but not an actual part of the deficit. By Monday night, the deal was pegged at $24 billion... but Schwarzenegger declared it a deal for the entire problem. What happened? According to the governor's budget office, look at it this way: strip the $2 billion reserve, strip away $1.6 billion in public education obligation that was avoided through some recalculation of revenues, add in some extra deficit caused by even lower revenues, and then tack on a new reserve valued at $921 million... and voila, $24 billion proposal. As mentioned before, part of it was rejected by the Legislature. Still, this was a plan to address an actual deficit of about $23 billion. And yet as late as today, some news organizations were still using the $26 billion number. Go figure.

[Note: This will likely be the last blog posting for a while. For almost all of next week, I'll be on furlough, part of KQED's mandated lowering of expenses to make up the organization's own budget deficit. Look for Capital Notes blogging to resume the first week of August. --JM]

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About John Myers

John Myers is senior editor of KQED's new multimedia California Politics & Government Desk.  He has covered California politics for most of the past two decades -- serving previously as Sacramento bureau chief for KQED News and, most recently, as political editor for KXTV News10 (ABC) in Sacramento. He moderated the only gubernatorial debate of 2014, and was named one of the nation's top statehouse reporters by The Washington Post. Follow him on Twitter @johnmyers.

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