In Search of Budget Dénouement
If ever a process was in need of someone who, as Kenny Rogers would sing, would "know when to hold 'em, know when to fold 'em," it's probably the 2011 budget saga. Even so, it looks like we're going to have to keep waiting.
"We'll know the deadline when we've passed it," said Governor Jerry Brown this afternoon.
Brown was (shockingly!) mobbed by reporters after wishing a rainy crowd well on the Capitol steps who had gathered to celebrate Ag Day, and offered a fairly daunting assessment of budget talks -- in a way that only he could.
""Whichever way I look, I see bears in the forest," said the governor.
(At the risk of taking the metaphor too far, the Guv may want to consult the many websites that offer advice for those facing a menacing bear. "Even if the bear bites you, continue to play dead," says one. Make out of that what you will.)
Brown was careful to neither confirm nor deny Tuesday's widespread chatter that he's now thinking of going around legislative Republicans in his quest for a 2011 statewide election on $11 billion in additional tax revenues to balance the budget. The conventional wisdom, until yesterday, was that the governor could throw a Hail Mary by placing the matter before voters in June via a majority legislative vote. Now, it appears he's at least pondered something even more unusual: the idea of having supporters circulate an initiative on the taxes for a November election.
As tempting as that storyline may be, it's fraught with pitfalls, according to a few smart politicos who I've spoken to on background the past couple of days. For starters, Brown would need his allies to pony up big bucks for a super-fast circulation of an initiative that doesn't even (publicly, at least) exist.
Then, assuming someone on the left-of-center side of the political spectrum would finance that (a big assumption, say insiders) there's the matter of how to then craft the 2011-12 state budget due on July 1. Could it include a revenue estimated predicated on November taxes, or would Wall Street lenders laugh state officials out the door? (See below.) Would it require an 'all cuts' budget which the voters would be told could be rolled back if the taxes pass? That seems a bitter pill to swallow for Dems in the Legislature. And would the taxes even pass, given they would now definitively be a tax increase as opposed to Brown's proposed extension of taxes set to expire in statute on June 30?
Those are huge leaps of faith, and the governor likely knows it. But today, he artfully dodged an acceptance or rejection of any path forward. "There's no final decision," Brown told reporters as he hustled up the Capitol's west steps. "You can take that to the bank."
That being said, the one musing the governor did seem to quash today is one being talked about in a lot of circles: ditching the election and trying to just find four GOP votes -- two in each house -- for the actual taxes themselves. Some Dems lament that all of this may be for naught, given the polling that suggests voters may nix the revenue plan.
When I asked him about it, the Guv seemed to summarily dismiss the idea. "I know there are some people holding that out," he said. "It's a non-starter. 'A,' I promised to go to the people. And 'B,' the Republicans have told me that there's no way they're going to do that."
And so we wait for the dénouement of these budget talks, as elections officials wring their hands about timing, legislators carry out the more mundane parts of their weekly duties, and those of us in the press remain camped out in front of the governor's door, searching for some hint of what's to come.
Addendum: The state's top investment folks say that the only way a November election would fly on Wall Street is if it comes on the heels of an enacted budget with some $26 billion in cuts. Tom Dresslar of the state treasurer's office says there would be almost no way the state's cash flow loans could be sold with a budget "balanced" on the presumption of November voter-approved revenues. Dresslar points out that such a precariously balanced budget would also delay as much as $6 billion of infrastructure bonds planned for sale in the fall -- thus actually putting some projects in jeopardy of shutting down. So the message to the folks in the Capitol: if it's going to be a November election, assume you're passing an "all cuts" budget.