State legislators go unpaid as California reverts to dysfunctional type

Jun 23rd 2011 | LOS ANGELES | from the The Economist print edition

WHAT a lot of history California has been making this month. For the first time since 1933, the (Democrat-controlled) state legislature has the power to enact a budget with a simple majority, thanks to a ballot measure voters approved last year. So it passed a budget on June 15th, meeting the constitutional deadline—also for the first time in years. But the next day Governor Jerry Brown, himself a Democrat, vetoed that budget—apparently the first such veto in California’s history. The budget was not balanced, he said, and contained “legally questionable manoeuvres”.

His fellow Democrats scolded him. Mr Brown scolded them back, and the Republicans to boot. The Republicans were already scolding everybody, and saw no need to stop. Joining this free for all, the state’s independently elected state controller, John Chiang, decided to stop paying legislators. The new budget rules require withholding salaries from legislators for every day that a budget is late, he said. But our budget was not late, the legislators objected. Your budget had gimmicks and was not even balanced, Mr Chiang told them. He will get sued for his pains, it goes without saying.

Mr Brown’s Republican predecessor, Arnold Schwarzenegger, used to call the ritualised drama that is California’s budget process a “kabuki”. But Japanese kabuki plots only start ridiculous and complicated, before speeding up and resolving themselves with a cathartic bang in the fifth act. California will be lucky if it follows such a script. Indeed, Mr Brown’s second spell of governorship now runs the risk of failing in its first year.

Here is how the year has deteriorated so far. In January, facing what was then a deficit of more than $25 billion, Mr Brown proposed to solve half the problem by cutting spending and the other half by extending some temporary taxes. For the cuts, he expected support from his fellow Democrats. For the revenues, he did not ask for support from hostile Republicans, merely for their consent to put that question before voters in a special election, which requires a two-thirds majority in the legislature. The Democrats duly enacted their part, the cuts. But the Republicans refused to agree to put the revenue question to voters. A handful of them almost broke ranks, but then retreated into the safety of their caucus.

All through this the polls, which at first showed support both for the governor and for his proposed tax extensions, have been turning against Mr Brown. This undermines the strategy of going for a special election, even if he could still get one, since voters would probably reject the revenues anyway. Meanwhile, the economy and tax receipts have grown just enough to make Mr Brown’s argument look weaker and to shrink the remaining budget hole—to about $10 billion—but not nearly enough to solve the problem.

So there they are. The new fiscal year starts on July 1st, and California had no budget as The Economist went to press. Standard & Poor’s, a rating agency, says that California’s credit, at A- already the worst among the 50 states, is “at a crossroad”. Voters are angry. So are legislators. So are the governor and his wife, though presumably not their new dog, Sutter. That, though, is about the only bright spot.

from the The Economist print edition | United States