Governor Throws Down the Gauntlet

By raising taxes and slashing programs for the poor, the budget Gov. Gray Davis outlined Tuesday provides an opening for his opponents, Democrat and Republican alike.

But it also shows a willingness to take unpopular stands, something not usually associated with a governor who has long found solace in the center and often delayed--recklessly, critics say--inevitably tough decisions.

While it is too soon to gauge the political impact, Davis’ plan effectively throws down the gauntlet, to use the words of one campaign advisor. In both word and deed, the governor challenged Republicans in the Legislature as well as their gubernatorial candidate, Bill Simon Jr., to come up with a less painful way of closing the $23.6-billion gap.

“If someone can produce a better budget, I’d be happy to look at it,” Davis said. “If they don’t present a comprehensive budget that balances and adds up, then I’m going to stick with mine.”

Or as Paul Maslin, the governor’s pollster and a senior political advisor, put it, “They can either be part of a constructive process, or they can blow the whole thing up with political demagoguery and an irresponsible plan. And if they choose the latter, we’re going to make sure that sees the light of day over and over and over.”

Simon quickly took up the challenge. Even before Davis unveiled his budget, the GOP nominee held a press conference in Los Angeles to criticize the governor.

He said Davis should have anticipated the looming shortfall and trimmed state spending accordingly. Instead, Simon went on, “Gov. Davis has been more interested in his campaign treasury than the state’s treasury.... Because Davis is so focused on fund-raising, he’s neglected his responsibility to provide leadership on the budget.”

Simon has issued a patchwork of proposals, including a 15% cut in operational spending and reductions in health care and education programs, as a means of closing about half the budget gap. He has also called for trimming the state tax on capital gains and a reduction in homeowners’ taxes, without saying how he would offset those further reductions in state revenue.

In fact, Simon has yet to issue the sort of detailed document that Davis was forced to produce on Tuesday, and has no intention of doing so, said spokesman Jeff Flint.

“We’ll certainly talk about some of the proposals Bill has made before,” Flint said, as well as “the principles and methods” Simon would use in approaching the deficit.

Even absent those details, the Davis camp was quick to invite comparisons between the two plans, offering its own highly partisan analysis.

“Sure, you don’t want a budget deficit in an election year,” Maslin said. “But it also offers a very clear choice between responsibility and irresponsibility, between a balanced approach and one that would cut the life out of education, health care and policies for the aged.”

Gale Kaufman, a Democratic consultant who has frequently faulted Davis for equivocating, praised the governor on Tuesday for taking “some tough and risky steps.”

“When you’re cutting things and raising taxes ... I think you have to call that leadership,” Kaufman said.

Republicans, of course, found other words and in that way the budget battle--and a critical phase of the gubernatorial campaign--was joined.

Like any budget, the spending blueprint the governor outlined is a political document. The revised budget is structured in a way that provides Davis with maximum protection. By far the bulk of Californians won’t notice any tax hike until after November’s election. An increase in the vehicle registration fee, for instance, won’t kick in until Jan. 1.

There are major cuts, particularly in Medi-Cal--the main health care program for poor people--and welfare recipients won’t receive cost-of-living increases under Davis’ plan. There may even be layoffs of state workers, as many as 4,000 by administration estimates. But within the Capitol, welfare and Medi-Cal recipients aren’t viewed as likely voters, and state public safety workers aren’t among those who face pink slips.

That’s not to say there won’t be pain, or that the budget will pass without a fight.

Davis needs two-thirds votes in both houses to gain legislative passage, meaning he must hold on to Democratic lawmakers--who may balk at many of the spending cuts--and win over at least a handful of Republicans--who have every reason to prolong the agony.

“Far more damaging than the nastiest attack ad is a steady stream of headlines about the horrible, ugly things Gray Davis will have to do to fix this mess,” said Dan Schnur, who was communications director for Gov. Pete Wilson in the early 1990s, when the Republican imposed deep cuts and raised taxes to close a $14-billion deficit.

Schnur envisioned a ghastly series of imagined stories: “‘Governor Cuts Programs For Children’ ... . ‘Governor Cuts Programs for Poor Children’ ... ‘Governor Cuts Programs for Poor Handicapped Children’

Davis--and California--are hardly alone in their fiscal straits. Roughly 45 governors across the country, both Democrats and Republicans, are facing significant budget shortfalls. Many political analysts say California’s deficit, vexing and painful as it may prove, is not enough to recast the dynamic of the governor’s race--at least not yet.

“It’s another thing, like the energy problems, like the perception of ethical questions,” said John Kohut, who handicaps gubernatorial contests across the country for the Cook Political Report, a nonpartisan Washington publication. “You could sit down and make a list of two dozen factors and go, ‘Wow.’ In another state, two or three alone could kill the incumbent. But in California the circumstances are different.”

The state is so overwhelmingly Democratic, Kohut said, that a candidate with Simon’s conservative stance on social issues such as guns, the environment and abortion--which the candidate downplays--faces a built-in disadvantage even when times turn sour.

That said, a prolonged budget standoff could hurt Davis in ways both subtle and immediate.

“It relates to the competency issue, the thing that hurt him in the energy crisis,” said Tony Quinn, a GOP analyst in Sacramento. “It looks like he spends all his time raising money and isn’t minding the store.”

Right now, Quinn said, the budget is “an ethereal thing. It’s in the newspaper, but it doesn’t affect people. [But] if police officers aren’t paid, if the Highway Patrol isn’t on the street, if people aren’t getting their pension checks, that’s different. If this drags into the summer, it could be like those blackouts last year, which very much affected people in a personal way.”