Crisis could bring changes

SACRAMENTO —  There was relief in the governor’s face, and there were warm embraces between lawmakers who narrowly averted disaster. But beyond the state Capitol, among Californians embarrassed by the spectacle of elected officials who’d become the butt of late-night jokes, there was a question.

How can we stop this from ever happening again?

In a state where fed-up voters have a tradition of imposing their will, the crisis that led to a deficit of historic proportions and ended as the sun came up Thursday was seen as a potential defining moment for changing the way government and politics are run.

The sense that California’s state government does not function has been building for several years -- since before the recall that swept Gov. Arnold Schwarzenegger into office -- but residents and experts said nothing has so crystallized it as the turmoil of the last few months.

“I am horrified that our elected representatives let this happen,” said Lauren Black, a Los Angeles County employee who lives in South Pasadena. She and others said it is time for a reckoning in Sacramento.

“I think,” said Hillary Moglen, a public relations account executive from Culver City, “you have to capitalize on this catastrophe.”

Until recently, Sacramento budget disputes largely played out during the summer and were then resolved. But now they have lasted longer, become more intense and recurred in quick succession. Taxpayers will feel this latest round acutely, in delayed income tax refund checks and more money forked over to the state. Californians’ opinions of state officials and their performance are dismal, polls show.

“It seems to me that the public is probably more aware than any time in the last 20 or 30 years that there’s something broken up there with respect to the budget process,” said Bruce Cain, a political scientist at UC Berkeley.

Nationally, the economic crisis and the desire for change that resulted in the election of President Obama both bolster the tide for reform in the state, experts say.

There is a swirl of ideas in the air, including forcing the state to plan its finances for multiple years at once, docking the pay of lawmakers who don’t approve a spending plan on time, removing from political parties the power to select candidates and eliminating the requirement that two-thirds of state lawmakers approve budgets -- which would effectively give Democrats the power to approve them without support from any Republicans.

A commission supported by Assembly Speaker Karen Bass (D-Los Angeles) and the governor is expected to recommend changes in the tax code this spring. Bay Area business leaders are trying to sell the state on holding a full-blown constitutional convention to address California’s thorniest problems, including water, prisons and budget paralysis.

Dan Schnur, director of the Jesse M. Unruh Institute of Politics at USC, said many of the issues are not easily explained to a distracted electorate.

“It may be too difficult to explain to voters why something called the Constitutional Convention might improve their lives,” he said.

Voters, meanwhile, have already proved eager to start the overhaul. Last November, they approved a redistricting ballot measure that reformers say will help ease the partisan grip on the Capitol.

The wounds now are even fresher. Jay Leno flashed pictures Wednesday night of state lawmakers sleeping at their desks.

“Welcome to California, now available on EBay!” he crowed to open his “Tonight Show” monologue.

Schwarzenegger said the crisis had created opportunities for two ideas he and the state Legislature are now sending to voters, and for which he will campaign. One is a rainy-day fund to sock money away in good times. The other, a measure for so-called open primaries that Sen. Abel Maldonado (R-Santa Maria) demanded in exchange for his budget vote, is touted as a way to elect more moderate representatives.

“The people are sick and tired of politicians fighting,” Schwarzenegger told reporters Thursday. “There are various different things that are broken, and what we are trying to do is systematically fix those things. Very, very difficult to do.”

California Forward, a nonprofit group supported by foundations, is advocating proposals to change the nuts and bolts of the state budget process, some of which could be done by lawmakers and some by voters.

The group supports requiring the state to budget for two years at a time, revising the way lawmakers approve budgets to increase their oversight of spending, reducing borrowing and ensuring that the state doesn’t rely on income sources likely to someday disappear. The group has ties to leaders in business, unions and politics.

“We’re actively building a coalition to help support these reforms,” said Jim Mayer, the group’s executive director. “We don’t think the Legislature is going to do it on their own.”

Already circulating are two ballot measures for the controversial idea of ending the gridlock by requiring only 55% of lawmakers to approve budgets, instead of the two-thirds requirement that now gives Republicans a powerful veto.

One of the measures would also scale back the threshold for approving new taxes.

Voters in 2004 soundly rejected a similar measure backed by teacher and public employee unions. But 50% supported the idea last month in a survey by the Public Policy Institute of California -- the highest level in the more than five years that the group has polled on that question.

“That was amazing to me,” said Mark Baldassare, the institute’s president.

In interviews Thursday, several Californians expressed enthusiasm for another idea that almost became part of the budget deal: docking lawmakers’ pay if they can’t approve the budget by a certain deadline. Instead, voters will get to decide whether to deny elected officials a raise when state finances are in the red. It could go on the statewide ballot as early as June 2010.

“Stop the Legislature from getting paid!” said Bob McLaughlin, 65, as he ate lunch at Presidente Restaurant in Santa Clarita. “That’s their job, to pass the budget.”

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Ann M. Simmons, Paloma Esquivel, Joanna Lin, Anna Gorman and David Kelly contributed to this report.