Governor Brown Declares Budget Negotiations "Done"

As reported in previous editions, negotiations between the Governor and the GOP 5 have been going on for the last month or so.  But this past Tuesday, after yet another weekend of talks between leaders, Governor Brown issued a press release announcing he had abandoned negotiations, calling them fruitless.  GOP 5 members—Senators Berryhill, Blakeslee, Canella, Emmerson, Harman—also issued their own statements claiming they “did their best” but the Governor was not willing to break his ties with labor to go far enough to appease their concerns.

So what happens now?  A temporary fix to bring negotiators back to the table?  A shift to a simple majority vote?  A ballot-box war between Democrats and Republicans?  The options are intriguing.

If the Governor and Democratic leaders decide to go forward with a majority vote to put the tax and cut aspects of the Brown’s budget on the ballot, they lose $6 billion in cuts.  Options include a plan to adopt tax extensions temporarily – 90 days perhaps - while a permanent budget agreement is hammered out that could go to the electorate in September.  The new fiscal year begins July 1.  Meanwhile, rival interests are eyeing budget ballot measures going before voters in November, such as GOP-backed plans for a permanent spending cap and public pension changes, and a potential move by organized labor to protect pensions and build revenues for education.

Any increase in taxes requires two-thirds votes, but simple-majority votes would suffice in some cases, such as revising fees and shifting funding as has been done in the past.  The Legislative Counsel’s opinion, sought by Senate GOP Leader Bob Dutton, has said that in those cases, simple-majority votes are legal.  Typically, however, they have been done with two-thirds votes.

The governor has said repeatedly that he wants to place the budget before voters and “nothing has changed.”  The question is whether it will be June or some other date, even November, is uncertain.

Rumors are circulating that Senate President Pro Tempore Darrell Steinberg has told his caucus that budget conference committees will be meeting next week to craft a majority vote budget.  Another rumor is that Governor Brown called an end to the talks to force the Republicans hand and there will be one more push for a compromise.

All is quiet as of now while both parties plot their next moves.  Republicans are at a pivotal point.  If they fail to reach a compromise, they risk losing political clout in California.  The Governor and Democratic leaders offered Republicans a chance to shape key policies —rolling back government employee pensions, easing regulations on business, limiting the growth of government all seemed within reach.  All they had to do was agree to the term and provide four votes to place a tax extensions measure before voters.

On the other hand, Republicans say the Democratic concessions did not go far enough.  Reports say Republicans wanted a 5 year spending cap and Democrats were willing to give them four.  The parties seemed to be close on almost all aspects requested by the Republicans but there were some outstanding technicalities that had to be accepted by the Governor and he was not willing to go that far.  Negotiations appeared to be done on Monday; however, it’s believed labor and the unions pulled the plug at the last minute.

At this point, it appears anything can happen and no one knows how this will play out.  Stay tuned…

Gov. Jerry Brown yesterday issued a 12-point pension reform agenda his office says he will introduce in the Legislature "with or without Republican support."