As Tom Ammiano moved from the San Francisco Board of Supervisors to the California Assembly at the start of the month, he went from the budgetary frying pan right into fiscal fire, a place where the Republican Party’s "no new taxes" pledge has finally turned the political heat up to an unbearable level.
"I think the state’s road is very, very difficult, and the city’s road is very difficult," Ammiano told the Guardian. "There is a failure of leadership on [Gov.] Arnold [Schwarzenegger’s] part. I’m not giving [Mayor Gavin] Newsom an A+, but he at least came to the board."
The difference lies with the anti-tax pledge by the influential right-wing group Americans for Tax Reform that all Republican legislators have signed. Combined with the requirement for two-thirds of the Legislature to approve state budgets, the pledge has made it impossible to close a state budget deficit pegged at $40 billion over the next 18 months, a gap that could shut down state government by March.
"No matter how nice the Republican next to me is, or how gay friendly, they’re doctrinaire and they have everyone by the cojones," Ammiano said.
Senator Mark Leno says now is the time for Democrats to aggressively fight back against an inflexible anti-tax stand that has eroded critical government services for a generation and has now finally reached a crisis point. The conservative crusade has been led largely by ATR head Grover Norquist, who once famously said he wants to shrink government to the level where he can drown it in the bathtub.
"Every Republican has signed a pledge to someone who wants to drown government in a bathtub — Grover Norquist. So nothing will happen until we rip up those pledges," Leno told me, noting that the two-thirds vote margin is just three Republicans each in the Assembly and Senate. "Six human beings are bringing us to our knees."
Even the conservative editorial page writers of the San Francisco Examiner (who endorsed John McCain for president) on Dec. 15 wrote, "the deficit has become so overpowering that — hate it all we want — California cannot continue functioning in 2009 without at least temporary tax raises."
Yet Norquist and the Republican legislators in his thrall haven’t softened their position one bit and instead hope to win deep cuts with this game of brinksmanship. "Now it’s up to the governor to come up with a budget that doesn’t borrow money and doesn’t raise taxes," Norquist told the Guardian.
He said the problem is that California hasn’t adopted a system of making a searchable, detailed list of all government expenditures available to the public, as they have in states like Texas, Missouri, Kansas, Oklahoma, and Alaska.
"Ralph Nader and I have joined in sending three letters to your governor asking them to go transparent," he told us. "To say you’ve cut the budget as much as possible without having 30 million Californians help look at what makes sense and how to cut the budget is not serious. There’s not been a serious effort in California to scrub the budget, period."
Norquist did not return Guardian calls with follow-up questions about the fact that few credible government watchers think the budget gap can be closed with cuts alone or whether the current standoff — which even Schwarzenegger blamed on legislative Republicans — could hasten the demise of conservatism. But for now, conservatives are standing firm.
Senate Republican leader Dave Cogdill put out a statement saying, "Raising taxes doesn’t solve the underlying problem of California’s budget, which is the state spends more than it takes in." His statement may not be true — after all, raising taxes does indeed address that problem — but his caucus is sticking to it for now.
"Republicans remain strong against tax increases and that’s particularly important now when the nation is facing a recession," Sabrina Demayo Lockhart, press secretary for the Senate Republican Caucus, told the Guardian.
Leno called the tax pledge "childish and irresponsible," and akin to Democrats saying they won’t consider any spending cuts. "What kind of honest negotiations can there be when they’ve signed that pledge?" Leno said.
Lockhart countered that, "we’re bargaining in good faith for California taxpayers." Asked about the potentially devastating impact to the economy of shutting down all state spending and projects, Lockhart denied the Republicans were being irresponsible: "The responsible thing to do is project California taxpayers and jobs."
The Legislative Analyst’s Office last year put out a report entitled California’s Tax System: A Primer in which it wrote "California’s tax burden is about average," and in fact less than the industrial states’ average of under $12 for every $100 of personal income. And US tax rates are about 15 percent less than those in the European Union.
Leno has reached out to business leaders to have them try to talk some sense into the Republicans. Ironically, despite the Republicans rationalizing their pledge in the name of not wanting to hurt economic growth, the collapse of the bond market combined with the budget impasse threatens to cut off all state spending and send the already weakened economy into a nose dive.
"I wouldn’t think that anyone with a business mind or business concerns would in any way support the status quo right now," Leno said.
Leno said that even the Chambers of Commerce in San Francisco and Los Angeles are advocating for a reinstatement of the vehicle license fee, something that Schwarzenegger has voiced openness to even though his crusade against it helped sweep him into office five years ago. LAO figures show the lack of a VLF, by the end of the current fiscal year, will have cost the state $43.3 billion since it was repealed.
Leno said the Democrats are planning ballot measures for next year to raise revenue and repeal the two-thirds budget vote requirement, which only California, Rhode Island, and Arkansas have. As the state’s budget crisis devastates state services as well as those at county and city levels, Leno hopes this will be Norquist’s final stand.
"No one expects we can make $40 billion in cuts," said Leno, who hopes that the situation illustrates the intellectual bankruptcy of the right-wing stance.
"We do know there’s opportunity in crisis," Leno said. "It’s getting really ugly now and everybody knows it."