Contra Costa Times: GOP Negotiations Continue with Governor Brown

California budget deadline up in air as Republican legislators maneuver

By Steven Harmon
The Contra Costa Times

Posted: 03/05/2011 09:00:00 PM PST

SACRAMENTO -- A small group of Republican lawmakers delivered reform demands to Gov. Jerry Brown last week, but that is likely only the first step in negotiations that would push past Brown's March 10 deadline.

Brown had set the deadline in hopes of getting a ballot measure ready for June. But the chances of getting a budget deal this week appear to be dimming.

"It ain't gonna happen," one Republican aide said.

For one thing, he said, legislators have not even begun to work up details that could forge a compromise between the Democrats' desire to continue current tax levels and Republicans' hope for pension, regulatory and other reforms.

"We're still at the 30,000-foot level" of general conversations, the aide said on condition of anonymity because he was not authorized to speak publicly about the negotiations.

A key sticking point is that some Republicans want to delay any agreement until after the state GOP convention, which is being held March 18-20 in Sacramento, when conservatives who make up the bulk of party delegates will be applying a lot of pressure to reject a deal that includes a vote on taxes.

But Brown continues to urge a quick agreement, a spokeswoman said.

"The governor has always said he wants to get it done in early March and that remains the goal," said Elizabeth Ashford.

A Democrat close to the administration said it is a "big misread" for Republicans to seek to push back the deadline.

"All it means is there will be greater pressure on them," said the Democrat, who asked to remain unidentified because of the sensitive nature of ongoing discussions. "What you do to reduce the pressure is you act. You don't let it build up."

The March 10 deadline would allow for a special election by June 7, but Republicans say a special election can be pushed back as late as June 21 -- just before the close of the fiscal year on June 30.

Brown wants to get the election in before the 2009 increases on sales and vehicle taxes expire on July 1. Before July 1 it would be an extension; after that date, it could be argued that he's seeking another tax hike.

Income taxes already reverted to pre-2009 levels on Jan. 1.

On Thursday, both legislative chambers are scheduled to take up a budget produced by a joint budget committee that largely accepted Brown's proposed $12.5 billion in spending reductions and the elimination of the state's 425 redevelopment agencies. The budget, however, was approved along party lines as Republicans continued to maintain that more cuts are needed.

The vote likely won't be much more than a "drill" that will display the partisan differences, observers say, particularly over Brown's plan to call for a special election to extend the 2009 tax increases on sales, income and vehicles.

At least publicly, Republicans remain opposed to the tax extension.

"Our caucus is firm and there aren't votes for taxes," said Sabrina Lockhart, spokeswoman for Assembly GOP Leader Connie Conway, R-Visalia. "But Republicans remain committed and engaged in the process."

Privately, a number of Republicans are working discreetly to find common ground with Democrats. At the risk of becoming an early target of outside groups and conservative talk show hosts, Sen. Bob Huff, R-Diamond Bar, revealed last week he is trying to keep lines of communication open for a potential deal.

One of a dozen Republicans who refused to joint a newly formed anti-tax group, the Taxpayer Caucus, Huff said the opportunity to win significant reforms in regulations and pensions may be worth the risk of going against the GOP grain on taxes.

"I'm hoping to negotiate something," he said. "I want to get at reforms that change the way the state operates. If you're going to get at the problem, which is some of the regulations, pensions, you're taking yourself off the negotiating table if you say we won't" talk about tax extensions.

Democrats need to attract a minimum of two Republicans in the Assembly and two in the Senate for the required two-thirds vote on placing a tax issue before voters.

Other lawmakers regarded as potentially open to negotiation are keeping a low profile as they attempt to navigate through the treacherous landscape of the Capitol. Some Republicans have allegedly threatened fellow Republicans with political retribution if they accepted a tax deal at the same time as outside groups such as Grover Norquist's Americans For Tax Reform are trying to apply heat.

But Republicans considering a tax vote were provided some political cover last week by major business groups. Friday, the Bay Area Council endorsed Brown's tax extension, and a day earlier, the California Chamber of Commerce signaled that Republicans who support tax extension will receive financial support for their campaigns to fend off potential challenges.

Assemblyman Bill Berryhill, R-Stockton, one of three Republicans who have not signed a no-tax pledge, is interested in discussions if Democrats are open to budget, pension and regulatory reforms and not wedded to the current proposal, a top aide said.

"There's reason to talk," said Evan Oneto, Berryhill's chief of staff. "Bill's busy investigating reforms, and looks forward to having discussions."

The offices for senators Sam Blakeslee, R-San Luis Obispo, and Anthony Cannella, R-Ceres, the other two Republicans who have not signed a no-tax pledge, declined media requests for interviews. But they and others could be central to forging what is an ideal outcome, said Rob Stutzman, a Republican political strategist.

"This is the greatest moment of leverage they've had for decades," he said. "It's a great opportunity to get robust, long-term fiscal and regulatory reforms that they could only otherwise achieve as a majority. The question is if there are enough members who can be what I call a coalition of the responsible who will explore what they can get in exchange for merely putting tax extensions on the ballot."