Governor Brown Decides to Halt Budget Negotiations

In a video statement Governor Brown said, “Today I have broken off discussions with the Republican Party in Sacramento regarding solutions to our budget crisis.”

“It was a balanced plan and it has the support of business, of labor, environmentalist, farm groups, an amazing coalition that spans the spectrum,” he continued.

“During these discussions I proposed detailed and specific plans for pension reform, for putting a cap on state spending, and for regulatory reform,” he added.  “Unfortunately, even though we came very close, there are issues that I think are impossible to resolve at this time.”

One of the big differences was a billion dollar tax break that went to giant companies that are keeping jobs out of California.

“I don’t think we should take money from school children, public safety, and our universities and give it to companies that don’t want to create jobs in California.  That’s a stumbling block and there are others,” the Governor said.

He did add that he is not giving up. 

“The problem has taken a decade to build up, it’s very serious,” he said.  “It’s just going to take some time before we finally solve it.”

In a statement from Governor Brown he added, “Each and every Republican legislator I’ve spoken to believes that voters should not have this right to vote unless I agree to an ever-changing list of collateral demands.”

It appears that the prospects of a June Election are gone.  Senate Leader Darrell Steinberg stated that they have no plan for a majority tax extension vote.

California treasurer Bill Lockyer warned earlier that the state would face a serious cash crunch if resolution of the budget problem was pushed into the fall, possibly forcing officials once again to issue IOUs.

The result is that the state will have to cut an additional $14 to $15 billion from its budget and that will push huge chunks of the burden back onto education, social services, and the criminal justice system.

Speaker John Perez was pointed in his criticism of Republican officials.

“Democrats have made the tough decisions necessary to close an historic budget deficit,” he said in statement. “While Republican rhetoric suggests they are open to working with us, their actions have not reflected their public statements. In fact, over the past several days, they have shown their true priority is demanding tax cuts for huge, out-of-state corporations, and other costly proposals that would have put a four billion dollar hole in the budget.”

He continued, “I am deeply disappointed they have refused to let the people of California have a say in how we close the deficit and put our fiscal house in order.”

“Regardless, we must move forward on finding solutions that reflect the spirit of the Governor’s budget proposal,” he continued. “We have approved more than 14 billion dollars in solutions to close a 26 billion dollar deficit, and we will meet our constitutional obligation to approve the budget by June 15.”

“One thing is clear: the people of California would be well served if Republican actions matched their rhetoric, because we need to move forward together, as a state, to close this deficit,” the Speaker concluded.

As the LA Times noted, in their news analysis, this amounted to a lost opportunity for the Republicans.

They wrote, “Reporting from Sacramento — After years of sitting on the bench, watching much of the state’s business being conducted with little regard for their input, California Republicans in recent months had an opportunity to share the reins of government.  Now, that appears to be gone.”

They continued, “The Democratic governor and legislative leaders offered the GOP a rare chance to shape key policies — and mitigate several that were forged on the other side of the aisle over more than a decade. GOP legislation was suddenly on the front burner. Rolling back government employee pensions, easing regulations on business, limiting the growth of government all seemed within reach.”

All the Republicans needed to do was find four votes.  Instead, writes the Times, “the Republicans have cemented their fate as a dying minority party in this largely Democratic state.”

“These opportunities don’t come up too much in Sacramento,” said Bill Whalen, a GOP political consultant who was an advisor to former Gov. Pete Wilson.

“If I’m the Republicans … I would argue for a minimalist approach,” he said. “Be able to declare victory and retreat. … That should have been part of the calculus.”

The reality is missed upon the Republicans, who somehow are hoping that if the Democrats screw up enough they will get a turn in California.  Demographics and policy differences, however, suggest otherwise.

Wrote the Times, “The Republicans say they walked away from the negotiating table when it became clear the governor was willing to go only so far. In the rush to negotiate sweeping policy changes under a crushing deadline, they began to fear that the concessions on offer could be rolled back later or would not be as far-reaching as they wanted.”

They continued, “In a puzzling eleventh-hour shift, they lifted the veil of secrecy on the talks and released the sprawling list of GOP demands that had been brought to the negotiating table. It spilled over seven pages and veered into such topics as when the state should hold its presidential primary. It included the continuation of billions of dollars in corporate subsidies and tax breaks that Brown wants to eliminate to balance the budget.”

“The public move appeared intended to show that Republicans were being serious and reasonable. But the Brown administration seized on the GOP document to make the opposite case,” they conclude.

Unfortunately, the people that will lose most in this are schools that have been hammered by cuts in the previous budgets.  The lack of a tax extension likely means that DJUSD will have a $6 million budget deficit to close, only half of which will come from a passage of Measure A – if it passes.

—David M. Greenwald reporting