Democrats Discussed Extending Budget Crisis

By Evan Halper and Nancy Vogel
Times Staff Writers

July 22, 2003

SACRAMENTO — In a meeting they thought was private but was actually broadcast around the Capitol on Monday, 11 Assembly Democrats debated prolonging California's budget crisis to further their political goals.

Members of the Democratic Study Group, a caucus that defines itself as progressive, were unaware that a microphone in Committee Room 127 was on as they discussed slowing progress in an attempt to increase pressure on Republicans to accept tax increases as part of a deal to resolve the state's $38-billion budget gap.

The conversation was transmitted to roughly 500 "squawk boxes" around Sacramento that political staff, lobbyists and reporters use to listen in on legislative proceedings.

According to Republican staff members who captured parts of the meeting on tape, Los Angeles Assemblywoman Jackie Goldberg and others discussed holding up the budget to dramatize the consequences and build support for a ballot initiative that would make it easier to raise taxes.

"Since this is going to be a crisis, the crisis could be this year," Goldberg said, according to a transcript. "No one's running [for reelection]. And maybe you end up better off than you would have, and maybe you don't. But what you do is you show people that you can't get to this without a 55% vote."

The ballot initiative would let the Legislature approve any tax increase with a 55% vote. The state Constitution requires a two-thirds majority. That means that under the current makeup of the Legislature, at least eight Republicans must join the slim Democratic majority for a tax increase to pass.

Fabian Nunez, also of Los Angeles, agreed. "If you don't have a budget, it helps Democrats," he said.

While a delay might serve the tactical advantage of Democrats, its consequences are already being felt by students, vendors and the poor: Since the new fiscal year began July 1 without a budget, the state has already begun to cut off money to some programs.

Republicans noted that many caucus members have charged the GOP with holding the budget process hostage. Yet, those same Democrats are now caught on tape discussing ways to hold things up.

Assembly Budget Committee Vice Chairman John Campbell (R-Irvine) said he listened to about 20 minutes of the meeting on the squawk box in his office.

"It sounded like they were hoping to create a crisis at some point to further their political gains in other areas," he said. "I thought that was outrageous."

Campbell said Democrats also discussed whether delaying the budget would increase the chance of a union-backed initiative that would lower the threshold for new taxes to a 55% vote of the Legislature. The state Constitution currently requires that budgets pass by at least a two-thirds majority, which today would require that a few Republicans join a united Democratic majority.

Campbell said that the Democrats discussed leveraging the public's distaste for the Legislature.

"They were worried that if the Legislature appeared to have dealt with the budget crisis, the initiative may not play well," he said. "This is very surprising, considering they are in charge."

After about 90 minutes, a staffer interrupted to alert lawmakers that their meeting was not private at all:

"Excuse me, guys, you can be heard outside," an unidentified staff member said.

"Oh [expletive], [expletive]," Goldberg said.

"The squawk box is on," the staff member said. "You need to turn it off right there."

"How could that happen?" Goldberg said.

Democrats who attended the caucus session included Patti Berg, Eureka; Judy Chu, Monterey Park; Mervyn Dymally, Compton; Loni Hancock, Berkeley; Hannah-Beth Jackson, Santa Barbara; John Laird, Santa Cruz; John Longville, Rialto; Alan Lowenthal, Long Beach; and Patricia Wiggins, Santa Rosa.

Goldberg made no apologies about her comments with regard to the timing of a "crisis."

She said it was part of a discussion over whether it would be better to make deeper cuts this year, to show Californians the severity of the state's money troubles, or to disguise the problem this year and make more drastic cuts next year.

"It meant whether or not we do the things this year or next year that let the public understand how serious the situation is," Goldberg said. "They think if we skate by, it was all hyperbole up here.

"We're in a crisis," said Goldberg. "You don't have to precipitate one. The question is whether we should make that crisis happen now when it's really happening.... When you wait a year, you double the amount you have to cut.... Is it better to do it now or next year?"

Caucus members were girding for what many in the Legislature believe will be a budget approved by the Senate in the coming days with no new taxes.

The liberals in the group have been pushing for billions of dollars in tax hikes to preserve education and health programs, and were discussing whether to vote for the budget approved in the Senate or to keep fighting.

"There is a wide degree of unhappiness at the state of affairs and how the budget might be lobbed over from the Senate," said Assemblyman Mark Ridley-Thomas (D-Los Angeles), who belongs to the caucus but was not at the meeting that was broadcast.

"Some of us believe the budget is neither workable nor reasonable without revenue enhancements," he said. "Why should we support an unreasonable and unworkable budget? The Republicans have no monopoly on principle. If they can strike a hard line, why can't we?"

The sentiment suggests that the budget impasse could drag on even if the Senate brokers a deal.

Many Republicans in the Assembly are already saying that they won't vote for a budget the Senate passes because it assumes that the recently enacted tripling of the state vehicle license fee, or "car tax," will stand.

Dymally said the meeting room the caucus used was unfamiliar to members.

"The [microphone] switch was on, but there was no light on the switch, so we didn't know it was on," said Dymally.

He called the incident "small potatoes."

"Nothing secret, nothing intimidating, no grand scheme," Dymally said.

"We did not plan to precipitate any crisis.... We were trying to figure out how to avoid a crisis."

Times staff writer Dan Morain contributed to this report.