This year's budget stalemate is drenched in three decades of tortuous political history. Today's conflicts echo those we've seen in one form or another since 1978, when voters passed Proposition 13, the iconic property tax cut.
The stalemate is also heavily tinged by the irony of Democrats advocating balanced budgets, Republicans proposing loans to cover deficits and Gov. Arnold Schwarzenegger urging new taxes after years of boasting about cutting taxes.
History and irony collide in the demand by Schwarzenegger and Republican lawmakers for "budget reforms" they say would preclude future crises.
Among other things, Schwarzenegger wants governors to have the authority to unilaterally reduce spending when deficits loom. And GOP legislators want a so-called "hard cap" on state spending, perhaps limiting yearly increases to population growth and inflation. Democrats, of course, oppose both.
The historic irony is that California once had both of those spending restraints, but the most fiscally conservative governor in recent history, George Deukmejian, traded them away.
Republican Deukmejian inherited a hefty budget deficit in 1983 from Democratic predecessor Jerry Brown, one born of sharp increases in state spending for schools and local governments to offset Proposition 13 property tax losses, and of reduced revenues from an ill-advised state tax cut.
Deukmejian didn't want to raise taxes and quickly exercised a rarely used authority to cut spending without consulting the Legislature. Democratic lawmakers were incensed at being bypassed, and months of very contentious negotiations followed.
Eventually, Deukmejian and legislators agreed on a deal that included rolling part of the deficit into the following year, making some spending cuts and instituting some "revenue enhancements" that the governor insisted were not new taxes.
When the budget and its supporting bills reached his desk, however, Deukmejian discovered that Democrats had slipped in a repeal of his authority to make unilateral cuts.
"We had a big internal debate" over whether to veto the bill, recalled Steve Merksamer, then Deukmejian's chief of staff, who added that Deukmejian decided to give up the power rather than blow up the budget deal.
At that time, the state had a hard cap on state spending, thanks to a 1979 ballot measure sponsored by Proposition 13's co-author, Paul Gann, one so tough that it generated a tax rebate midway through Deukmejian's governorship. But in 1990, as Deukmejian was serving his last year, he agreed to soften the Gann Limit as part of a multipart deal that included new gas taxes for highway projects. Voters ratified the change in Proposition 111.
The Gann Limit has never been a factor in state spending since. It's so loose now, in fact, that spending would have to increase by many billions of dollars to reach it.
What goes around comes around, as they say in the Capitol.
Call The Bee's Dan Walters, (916) 321-1195. Back columns, www.sacbee.com/walters.
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