06/17/2011 03:58 pm ET | Updated Aug 17, 2011

Jerry Brown's Big Budget Veto, and Where It Goes From Here

The dust is still settling in the wake of Governor Jerry Brown's veto of the California state budget. That budget, designed by Democratic legislative leaders and their backers, had good things in it, and also some highly questionable elements, i.e., gimmicks, some of which may be replaceable in another iteration.

Can Brown get his better budget, the sensible compromise mostly blocked by Republican intransigence? That question probably becomes moot on June 30th. Why? It's simple enough. That's the point at which his proposed tax extensions become tax increases.

Meanwhile, for the first time in California's recorded history, a governor has vetoed a state budget.

Governor Jerry Brown issued the first veto of a state budget in California's history.

In 2008, as I covered extensively at the time, then-Governor Arnold Schwarzenegger promised a budget veto, which, after legislative leaders realized that their insistence that they could effectively override the veto was actually in error, drew them back into negotiations which yielded a rainy day fund. Then-Attorney General Brown told me at the time that Schwarzenegger was correct in his assessment that he held the most important cards, to a point.

Democratic legislative leaders Darrell Steinberg of Sacramento and John Perez of Los Angeles held a remarkable press conference in the Capitol Thursday in which they acted more than a bit like spurned lovers. (Today Steinberg announced that Senate confirmation of Brown's appointees is on hold.)

They seemed to believe that by passing a gimmicks-laden budget on the last day possible to ensure their not missing a paycheck that this process had ended. (I know they had another reason, producing an on-time budget to fulfill the promise of Prop 25, but the story writes itself, and is all over the place.)

But of course the process had not ended. Brown was always going to brandish their budget before Republicans as an example of what might end up being the product -- with none of the various fiscal and regulatory reforms they supposedly want (more on the "supposed" part in a moment) -- as part of his late stage negotiations with them.

Vetoing the budget is not a predictable move by Brown, but it is a bold one.

After all, he was not elected to ensure that politicians, who make far more than most people, never miss a paycheck. This is a Legislature, incidentally, and Republicans are just as much a part of this as Democrats, which routinely has "check-in" sessions to ensure that its members get "per diem" checks for days on which they don't actually work.

State Treasurer Bill Lockyer, a veteran Democrat (former state attorney general and leader of the state Senate), agrees with Brown that the budget adopted Wednesday by the Legislature is "not financeable" on Wall Street. Since he's the one who has to do the financing, that is to say, arrange the state's cash flow, that's significant. But Democratic legislative leaders are acting as though they deserve gold stars for their foreheads.

On the other hand, it is quite true that Democrats have done far more than Republicans to balance this budget. This year, that is, and in the past few years. In previous years, the two parties engaged in something of a race to the bottom -- constantly pushing their wholly antithetical interest group imperatives of, respectively, never-ending government expansion and tax-cutting and government contraction -- though the Dems became far more the realistic of the two parties in the past few years.

That's because the Great Global Recession took away the revenue stream, and because the Republicans became even more conservative, to the point where now the party is dominated by folks who are essentially cultists.

What happens next? Why, the governor negotiates with the Republicans to see if the supposedly reasonable ones get more realistic.

I have real doubt about how serious the supposed moderates who've been talking with Brown actually are. They keep pushing for the most stringent versions of their reforms, especially as the deal is supposed to go down. They may be trying to have their cake and eat it, too, i.e., avoid getting blasted by the far right cultists for backing tax extensions but be able to claim to moderate and independent voters that they were carrying the flag of reason and reform.

Democratic legislative leaders are displeased with Brown's historic veto of the California state budget. Assembly Speaker John Perez and Senate President Pro Tem Darrell Steinberg held a press conference yesterday to vent.

Folks, if you want to make a deal, make a deal.

As for the Dems, well, hey, the budget you produced isn't the worst in the world, and lots of real progress has been made this year. But deciding that the political process around this ended on the day on which your paychecks would otherwise have run out is, let's be diplomatic, silly.

Which may not have been their intent at all, but that's another matter. Fortunately for them, this is not the end of the story. And what finally emerges may, with some changes, end up looking not wildly unlike what they came up with.

Unless a handful of Republicans are willing to cut realistic deals on their hoped for reforms.

After months of negotiations, Brown has come up against the same intractable dynamics that bedeviled Arnold Schwarzenegger in his last years as governor. An ultra-government faction that wants to keep expanding government vs. an anti-government faction that wants to contract government. Add in term limits, gerrymandered safe districts for hyper-partisans, ballot box budgeting, and an odd constitution that cuts a tax on a majority vote but takes a two-thirds vote to raise one, and there you go.

The state's fiscal problems date back to the late '90s and early noughties, with each faction pushing program expansions and tax cuts based on a dot-com bubble that went bust.

Meanwhile, there is a new Field Poll of California voters. In it, Brown's job approval is about the same as it was in the last Field Poll, three months ago, but his disapproval is up. And support for his state budget compromise, including tax extensions, still has bare majority support but has slipped.

A number of media outlets, which subscribe to the Field Poll, are treating this as a series of new developments. But in reality, it's not new, not unless you define new polling data as three months old.

Because readers know that there have been a number of intervening polls with fresher information, such as the Public Policy Institute of California (PPIC) poll at the beginning of the month which Brown's job approval essentially right where it is now in the new Field Poll.

PPIC had Brown at 46-28; Field has him at 46-31. Which is not at all bad for this environment. Arnold Schwarzenegger's last job approval rating, in the December PPIC poll, was 32%, a significant improvement from his standing several months earlier.

Confidence in Brown is down for several reasons, none of which the poll discusses, of course, but which are fairly obvious. While it's inevitable that many Republicans will switch from no opinion to disapproval -- after all, billionaire Meg Whitman got 41% of the vote against Brown, and his disapproval rating in this harshly partisan environment is well below that even now -- it's not inevitable that Brown's intensity of support should diminish.

Brown signaled in a web video over the weekend, which featured his key campaign ad about tough choices, that he was loathe to sign a state budget filled with more gimmicks.

Brown has managed to eliminate most of the massive budget deficit he started off with, even if neither the Republicans nor the Democrats want the public to vote on his proposed tax extensions, as it looks at the moment. But solving most of the problem is not solving all of the problem, so that makes a difference.

What also makes a difference is that Californians simply are not seeing or hearing their governor. This has been true from early on, and has much to do with the fact that Brown's job approval rating from January on significantly underperformed his landslide victory in November.

Now it may well be that Brown is loathe to discuss the endless behind the scenes talks he's having. But he's the governor of a vast and multi-faceted state, California's civic leader. There are plenty of things for him to talk about, especially since he is not an individual with few interests.

Why don't the dominant factions in the respective parties want an election?

The Republicans are afraid they'll lose, thus blowing their only claim to fame, that is, blocking taxes.

The Democrats would rather win next year, when they have a real shot at a super-majority, and avoid giving up any more in concessions this year.

Meanwhile, here is a description of the gimmicks-laden budget Democrats' budget in lieu of Republicans voting for tax extensions, widely panned by editorialists around the state.

As you know, Republicans have used their existing super-minority status under California's super-majority fiscal system to block the public vote Brown promised on taxes. One could fairly conclude that since the Republicans refused to allow a public vote, Brown's promise of a vote is vacated, especially since it is his responsibility to apportion state resources without wrecking the state.

But that's not how he sees it, at least so far. Perhaps he will pick up the handful of Republicans he needs between now and the end of June, as they look at a future political landscape created by Arnold Schwarzenegger's 2008 redistricting reform initiative and 2010 open primary initiative. We'll know soon enough.

The state seems on the verge of more competitive legislative and congressional races, as Schwarzenegger intended, which will diminish some of the hyper-partisanship which has brought such dysfunctionality to governance. But how many more districts is unclear, despite what various experts may think they know at the moment. There are many factors which determine competitiveness, and a first blush look at lines that won't be finalized until August is only one of them.

And so the pols ponder. While the state waits.

You can check things during the day on my site, New West Notes ...

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