SACRAMENTO -- Even before Gov. Jerry Brown held his signing ceremony touting an on-time, balanced, though pain-filled, budget, Republicans had embarked on the PR circuit to celebrate their success in blocking his plan for extending taxes.

For good measure, they derided Brown for failing to deliver on his campaign vow to break Sacramento of its dysfunctional ways.

But political observers say that it was Republicans who squandered a golden opportunity to put into law policies critical to their agenda. The party, whose statewide registration is at 31 percent and shrinking, could have widened its long-term appeal, observers said, but instead contributed to the Capitol's enduring negative image as the center of ideological purity and dysfunction.

"Republicans have once again succeeded in taking the short-term victory over their long-term interests," said Melissa Michelson, political science professor at Menlo College. "They're playing like the rules haven't changed, but they have. What if, after redistricting, this means Democrats gain seats and end up with a two-thirds majority? Then, Republicans will have lost all power to do anything, including the ability to negotiate with the governor for reforms."

Republicans blamed public employee unions for refusing to budge on the one issue they wanted resolved: pension benefits. But the handful of GOP legislators negotiating with Brown failed to understand the breadth of reforms they could have secured before labor and liberal Democrats started pushing back, said Bill Whalen, a research fellow at Stanford University's Hoover Institution and former speech writer for ex-Gov. Pete Wilson, a Republican.


"If it was pension reform or nothing, I don't understand that," Whalen said. "They could have gained on regulatory reform and other issues that would never have seen the light of day on an up-or-down vote with a Democratic majority. There's the opportunity, but the ship has sailed."

Republicans could have had the best of both worlds by securing concessions from Brown while going out and defeating a special election on taxes, said Julie Soderlund, a Republican consultant and former spokeswoman for ex-Gov. Arnold Schwarzenegger.

"There would have been value for Republicans if, in exchange for real reforms, they put the possibility of tax extensions on the ballot in March," Soderlund said. "Letting those tax increases go to the ballot and working hard to defeat them may have ended up with Republicans in a stronger position."

If voters had defeated the taxes in a June special election -- which many believed possible -- Republicans could have declared the issue of taxes resolved and forced Brown and Democrats to accept more austere solutions, Soderlund said.

Republicans understood they had leverage to get reforms they would never get through the legislative route, said Rob Stutzman, a GOP consultant who worked with Senate Republicans in the negotiations, "but they weren't going to go for a bad deal. Short of a spending cap or pension reform, it was not a good deal. These guys were putting themselves at a great deal of risk."

Republicans in negotiations had to weigh whether a deal was worth the risk of a backlash from Republican primary voters opposed to taxes, Stutzman said.

That risk may be overstated. Of the six Republicans who voted for a tax increase in 2009, only one was defeated in a Republican primary; two won primary contests for statewide offices -- races typically dominated by the most fervent of the GOP's anti-tax base.

The new landscape taking shape through the remapping of legislative district lines and top two primaries could render obsolete the fear of anti-tax backlash in the districts of the Republicans who were in talks with Brown.

The top two primaries could pit two members of the same party against each other in the general election. In districts that are reconfigured into a closer balance between the two parties, moderate challengers could threaten incumbents who refused to budge on taxes, especially if budget cuts force cutbacks to local police forces and schools, Michelson said.

Powerful forces -- unions and business groups alike -- are lining up their 2012 electoral strategies around the premise that voters in the new boundaries won't take kindly to ideologically rigid stances on taxes.
The Service Employees International Union plans to target Republicans in closely divided districts by financially backing moderate GOP candidates. Business groups -- restaurants, doctors, real estate and others -- that have typically supported election of moderate Democrats are gearing up for a similar effort in marginal GOP districts.

"I thought there would have been enough Republican legislators who looked at the new maps and figured that they'd have to moderate their politics, but the fear and orthodoxy held true," said Darry Sragow, a Democratic consultant who works with business groups in campaigns.

"I understand they believe this stuff on taxes. Fine, but this is where operating in their own echo chamber is killing them."

Republicans who played to the singular issue of taxes overlooked the importance of expanding their fast-shrinking appeal, Whalen said.

"The Republican base is thrilled that they didn't cave on taxes, but Republicans have to find ways to be relevant in ways other than simply thwarting the governor's plan on taxes," Whalen said.

"I'm not saying you improve your brand by just giving in to a tax deal, but when the only victory you can show is you foiled him on taxes, you're preaching to the already converted."

Republicans may have overreached by overestimating Brown's desperation to get a special election on taxes. But they also failed to recognize how much Democrats were willing to give, said Ben Tulchin, a Democratic consultant.

"There's a history of Democrats giving away more than they should," Tulchin said. "You know you're going to the table with a party that has a tendency to give up a lot, and yet they didn't get a deal. Democrats were willing to piss off their labor allies.

"But Republicans completely misplayed their hand."