Sunday, July 3, 2011

Sacramento Bee Columnist Dan Walters: Ballot War on for 2012 Election

Dan Walters: California ballot war on tap for 2012

Published: Sunday, Jul. 3, 2011 - 12:00 am | Page 3A
 
We'll never know for certain who is responsible for scuttling the months-long negotiations between Democratic Gov. Jerry Brown and some Republicans over a bipartisan budget deal.
We only know that the talks failed and Brown wound up doing a budget with Democratic leaders that doesn't contain the additional taxes he was seeking from Republicans, but hinges on some rather questionable revenue estimates from existing taxes.

And, of course, there's a lot of finger-pointing.

Brown says the Republicans couldn't deal due to a "religious reluctance" to accept tax increases. GOP leaders say Brown was hammered by unions and Democratic lawmakers not to accept their conditions of budget, pension and regulatory reforms.

The failure not only undercuts Brown's campaign pledge to permanently fix the state's finances but is doubly damaging to the larger public interest.

The state desperately needs to close its chronic budget deficit, bring some stability to schools, local governments and individual Californians who depend on the state for support, and pay down the huge debt that has been assembled during years of deficit spending. That probably requires some new revenue, at least temporarily.

Just as importantly, the issues that the Republicans raised were – and are – legitimate. California's economy is in the tank and is likely to remain depressed for years to come, in part because the state is not particularly attractive to job-producing investment. Pension benefits are unsustainable, and we do need a major overhaul of how we make fiscal policy.

We should either enact a realistic spending limit to avoid squandering the state's periodic revenue windfalls that generate ever-bigger deficits, or overhaul the tax system to make it less volatile and more predictable.
Brown has publicly endorsed change on all those fronts, but with the budget now in place and Republicans having lost their leverage, the chances of actually doing something on those matters in the Capitol fade.

Democratic constituencies – unions, environmentalists, consumer activists and personal injury lawyers – don't want any major changes on those issues.

Just as Democrats and their allies will now head to the 2012 ballot with tax increase measures, so Republicans and conservative groups will probably gin up their own ballot measure campaigns. And without the tempering legislative process, the measures are likely to be more extreme.

The tax measures are likely to focus narrowly on business and the wealthy, while measures dealing with pensions and the other stalled issues are likely to be equally polarizing.

Brown mused that the failure of bipartisan negotiations would lead to a "war of all against all." The likelihood of such an ideological war has just increased from possible to probable.

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