California budget negotiations a breeze for Jerry Brown

dsiders@sacbee.comJune 14, 2013 

California lawmakers have adopted on-time budgets so rarely in recent decades that the one they negotiated with Gov. Jerry Brown this week filled the Capitol with an air of self-satisfaction -- if not disbelief.

"Ho-hum," Senate President Pro Tem Darrell Steinberg said at a news conference Tuesday announcing the accord. "Another on-time, balanced budget in California."

Brown had already thanked Steinberg and his colleagues for "doing their job and doing it well."

By the time lawmakers approved the budget bill and began taking up the rest of the 22-bill budget package Friday, the only question was whether they could finish in time to start their weekend without returning for final votes this morning, the constitutional deadline.

Yet this contentedness belied the extent of the rift between Brown and legislative Democrats over the budget as recently as a month ago.

Brown dismissed a surge in tax revenue and promoted a relatively conservative spending plan, while Democratic lawmakers said they wanted more money for state services and programs.

Meanwhile, lawmakers balked at the signature element of Brown's budget, a bid to shift more school money to California's poor and English-learning students. Brown had promised critics of his proposal "the battle of their lives."

It was hardly necessary.

The budget the Legislature began adopting Friday included Brown's lower revenue estimates and a slightly modified version of his school financing plan.

Legislative Democrats, who initially urged about $2 billion more in spending, settled for about one-tenth of that amount. The $96.3 billion agreement the Legislature is finalizing includes about $200 million more in discretionary, general fund spending than Brown proposed.

"It looks like Brown prevailed, let's put it that way," said Mike Genest, Gov. Arnold Schwarzenegger's former finance director.

The negotiation between Brown and legislative leaders evolved over a series of meetings between staff members in recent weeks, with the most significant dispute involving Brown's school funding plan.

Nearly every lawmaker represents at least one school district that expected to do worse under Brown's proposal than under a traditional funding scheme. Legislative leaders wanted more money to improve funding for those districts, but the governor would agree neither to significantly increase overall spending nor to alter the basic architecture of his plan.

Instead, to free up money, Brown reduced by about $650 million the sum he originally proposed to pay down debt owed schools under Proposition 98, California's school-funding guarantee. The allowance, which ran counter to Brown's effort to reduce the state's "wall of debt," was one of only a few concessions the governor was forced to make.

Once lawmakers had more money to distribute to schools, "it became, really, an algebra problem," said John Mockler, who helped write Proposition 98.

The result, he said, was "good policy, and good politics."

District-by-district spreadsheets were ready for lawmakers to review by the weekend, and the two sides reached agreement by Sunday night.

The following day, only one minor issue remained: language proposed by Brown authorizing the administration to reverse the state's expansion of Medi-Cal under the federal health care overhaul if the federal government reduced funding for the program below a certain threshold in the future.

Assembly Speaker John A. Pérez considered it an unnecessary power grab. Pérez, Brown and Steinberg met at least twice in Brown's office Monday before settling on compromise language that afternoon.

More significantly to the legislative leaders, Brown had previously agreed to endorse spending on mental health services and college student aid, priorities of Steinberg and Pérez, respectively.

"Everybody got what they wanted - at least of the Big Three," said Jeff Cummins, a political science professor at California State University, Fresno. "Not a lot total-wise, but they were able - Steinberg and Pérez had staked out their position on what their pet programs were. ... They can at least claim credit for getting a couple of the main pieces that they wanted to out of the deal."

The relative ease with which the budget moved toward passage is highly unusual. Lawmakers have approved a budget by June 15 only a handful of times since 1975.

Brown, governor before from 1975 to 1983, often quarreled with the Legislature over spending, including a legislative override when he vetoed a pay raise for state employees.

More recently, budget negotiations have been aided by a 2010 voter initiative that required lawmakers to pass a budget by the June 15 deadline or go unpaid. Still, lawmakers and Brown quarreled publicly just days before the budget deadline last year, and the Legislature passed the spending plan without first reaching agreement with the governor.

Brown had infuriated Democrats in 2011, when he became the first governor in state history to veto the budget bill.

In the two years since, however, Brown has enjoyed a relatively favorable relationship with Steinberg and Pérez. The state economy is recovering, and the November passage of Brown's ballot initiative to raise taxes improved not only the budget's financial outlook, but the governor's political footing.

John Foran, a former Democratic legislator who worked on budget issues when Brown was governor previously, said Brown is "more down to earth and pragmatic, and more of a problem solver" than before.

But Foran said the Democrats with whom Brown is negotiating are different, too.

"The Democrats, particularly those that have gone through this horrible deficit every year, wanted - whether they say it outwardly, they want a situation in which they don't have this terrible deficit every year to face," Foran said. "So I think they probably are more pragmatic than they used to be."

Democratic lawmakers said this week that they may revisit their call for additional spending at midyear if state revenues outpace Brown's expectations. They will have little leverage, however, and Brown suggested he has little interest in such a reopening.

"In general," Brown said Tuesday, "I think prudence rather than exuberance should be the order of the day."

Brown is expected to run for re-election next year, and Democrats will be seeking to maintain their narrow supermajority in the Legislature. If revenue grows, as Democrats expect, having a budget surplus to point to could be politically appealing.

"He wanted to ensure that he put himself in the best place possible, not just for him but for everyone going into an election year," said Gale Kaufman, a Democratic strategist.

She said that as she watched a budget news conference earlier this week, "I thought, it's been a while since you had much to say for an incumbent that was positive. Now you have at least a little bit of a story to tell."

On the Senate floor Friday, Sen. Hannah-Beth Jackson, D-Santa Barbara, said: "California's back. I think this budget is a reflection of that fact."

By Friday afternoon it was apparent that lawmakers would, in fact, have to return to the Capitol today to cast final votes. As Democrats celebrated, Republicans complained about the secretive nature of the negotiations and their own lack of input.

Two years after Brown failed to negotiate a tax and budget agreement with GOP lawmakers, their ranks are so diminished the governor no longer needs them.

"He's just ignored the Republicans," said Tony Quinn, a political analyst and former Republican legislative aide. "So has the media, so have the Democrats, so has everybody else. Their irrelevancy is a simple, political fact of losing."

In the governor's negotiation with Democratic lawmakers, Quinn said, Brown demonstrated an ability to temper the more liberal elements of his party while exacting support for his own initiatives.

The result, Quinn said, is a Capitol where the governor is "really in charge."

Call David Siders, Bee Capitol Bureau, (916) 321-1215. Follow him on Twitter @davidsiders. Jon Ortiz of The Bee Capitol Bureau contributed to this report.

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