Friday, August 8, 2008

Republicans see opportunities in budget crisis

SACRAMENTO — Where there's a budget crisis, there's opportunity. At least, that's how many Republicans view the current standoff, now in its 38th day.

As both parties appear to be waiting each other out in a high-stakes game of chicken, GOP activists are cheering on Republican lawmakers to continue to hold out for budget reform that would cap spending in good economic years and give the governor new powers to cut spending when the state is facing a deficit.

Republicans also say the debate regarding raising taxes to cover a $15.2 billion revenue shortfall could help their cause in capturing closely divided legislative districts, as voters begin to worry about their pocketbook in the fall. So far, Republicans have resisted all proposals to raise taxes while insisting that the problem is spending, which has risen 39 percent since Gov. Arnold Schwarzenegger came to office in 2003, not revenues.

Their fondest, and probably faintest, hope would be to extract concessions from the all-powerful public sector unions, which Republicans say are the biggest drain on state resources. But whatever the outcome of the budget negotiations — declared to be at an impasse this week by Senate President Pro Tem Don Perata, D-Oakland — Republicans say they're in a better position to influence its final shape than they have been in recent years.

"This year, unlike last year and many previous years, Republicans in the Senate and Assembly are Advertisementcoordinating and acting as a team," said Jon Fleischman, publisher of the conservative blog FlashReport. "This year, (Republican leaders) have made it clear that reaching deeper into the pockets of taxpayers is not an option."

Typically, Republicans are relegated to the sidelines for much of the legislative doings at the Capitol. But when budgets come around, they find themselves at the center of attention, thanks to the constitutional requirement that two-thirds of both houses must approve the budget. Democrats need two GOP votes in the Senate and six in the Assembly to reach the two-thirds threshold.

At times, Republicans have appeared to relish their spoiler role — even as Schwarzenegger expressed exasperation at the lack of progress in budget negotiations, as he did Wednesday when he said he would refuse to sign bills until the budget was finished.

Assembly GOP Leader Mike Villines, R-Fresno, on Wednesday called on Democrats to put their budget plan — which includes a $9 billion tax increase, mostly on the wealthy — to a vote on the Assembly floor. Two weeks ago, Perata pulled the budget from the Senate floor, saying he didn't want to exacerbate budget negotiations with a nasty confrontation between the parties. But since then, the four legislative leaders have failed to meet.

"Assembly Republicans are prepared to have that debate," Villines said. "We are prepared to tell the people of California how much money Democrats will take from them to pay for their continued overspending ... at a time when businesses are leaving the state and families are struggling."

Ron Nehring, the chairman of the state Republican Party, says the growing stalemate can only work in the GOP's favor.

"The longer this continues, the greater an opportunity is presented for people to recognize California's budget system is broken," Nehring said. "Everyone knows the state has a spending addiction. That's why there's a need for serious reform so we're not in this cycle of perpetual crises."

If the role of Republicans is to force Democrats to cut wasteful spending, public pensions are an obvious place to start, said Mark Herrick, president of the California Republican League, a group of self-styled moderates.

"We're in a moment here where people will see the negative effects the state public service pension plans are having on California," Herrick said. "I don't think public employees should be allowed to use money from their salaries — paid for by the public — to elect Democrats, who pay them back by giving them generous pension programs. The problem is it's all the public's money."

Herrick said the state could save billions by forcing state workers to work longer before they are eligible to receive a pension. Currently, they can start receiving a pension after 20 years service after reaching 50 years of age.

As taxes continue to be at the center of the partisan divide, they could become the centerpiece to the fall campaigns, particularly in closely divided districts such as the 15th Assembly district, where Democrat Joan Buchanan and Republican Abram Wilson are vying to replace Assemblyman Guy Houston, R-San Ramon.

"This is one of those fault-line issues for Republicans," said Tom Del Baccaro, vice chairman of the state Republican Party and Contra Costa County GOP chairman. "It's certainly a rally cry and it's been effective in getting more volunteers — and for using in fundraising letters."

But, even as they try to exploit what leverage they have, Republicans risk a potential backlash by overreaching, observers said.

"The risk comes when their own constituents start hollering," said Jack Pitney, government professor at Claremont McKenna College. "If state funds start drying up, eventually the consequences will be felt in Republican districts in things like education, road maintenance. It could reach the point where even fairly safe members start feeling the heat if it goes deep into September and you start hearing from irate parents."

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