Why the Bid to Recall Governor Gray Davis Is the Wrong Response to California's Budget Crisis

The bid to recall Governor Gray Davis of California gets wrong who, exactly, is to blame for California's budget crisis. It also is likely to get wrong who should succeed Davis if he is recalled.

David Should Not Be Held Solely Responsible for California's Fiscal Crisis

California is set to run a budget deficit next year of almost $10 billion. But the crisis is largely the result of changed economic circumstances - not gubernatorial decisionmaking.

In Governor Davis's first term, the national economy was booming, and California was a vital engine of that growth. With a budget not very different from the current one, the state sustained expensive services and even ran a surplus, and Davis was routinely touted as a potential presidential candidate.

Then the economy soured, led by the financial markets' retreat and the disappearance in billions of dollars of high tech wealth. Davis couldn't be elected dogcatcher.

Davis was no more responsible for the boom than he is for the bust. Governors do not control a state's economy, just as presidents do not control a nation's. The California State budget was the beneficiary of the good times, and is now the victim of the bad times.

With Respect to the Budget, Davis Has Faced More than His Fair Share of Blame

Of course, a budget is not an economy, and here governors do bear responsibility. California, like most states, is forbidden by law from running a deficit. When revenues declined, the state's legal obligation was to balance the budget by bringing its expenditures in line with its revenues.

There are only two ways to do that: raise taxes or cut spending. Davis would have preferred more of the former; California's Republicans preferred more of the latter. The budget crisis was so severe that the state plainly needed a heavy dose of both.

California's political leadership has been unable to do much about taxes, for two reasons. The first is structural: as a result of Proposition 13, a ballot measure passed in 1978 by California voters, it's almost impossible to raise revenue by raising property taxes. This has long impeded intelligent budgeting in the state. Even Warren Buffett, candidate Schwarzenegger's chief financial adviser, has criticized Prop. 13.

The second barrier to new taxes is political: the state requires a two-thirds vote in the legislature to raise most taxes, and Republicans have enough votes to block such efforts.

Meanwhile, Davis's own party is largely unwilling to attack California's insupportably expensive level of state services. But here the blame must be shared between the Democratic governor and the Democrats in the state legislature, who have no love for Davis and who are, in the main, to his left.

Why the New Governor Is Unlikely to Be Any More Effective Than Davis Has Been

The problem with the recall, then, is that it gathers the voters' frustration with the budgetary mess - a product alike of the actions of Democrats and Republicans, the executive and the legislature - and focuses it all on one person: the governor. The recall pretends that Gray Davis is the problem. But he is only "a" problem; he's just not important enough to merit the definite article.

And for that reason, among others, the recall promises to be an unusually unedifying election.

Most of the major candidates to replace Davis have promised to roll out their precious plans for fixing California's budgetary mess. There is unlikely to be anything new in any of this - most measures for cutting spending or raising taxes were long ago proposed, debated, and - for the moment - rejected in Sacramento.

Indeed, the only thing most of the candidates can agree upon is that they will repeal Davis's hated car tax hike. Ironically, then, in the midst of a budget crisis, there is consensus only on a measure that will make the crisis worse.

But all of these candidates will have to contend with the same limitations that Davis does: structural and political impediments to raising revenue and cutting spending. They will all wade into battle with the legislature, an intractable bureaucracy, and entrenched, powerful interests. California's teachers do not care that Arnold Schwarzenegger played the Terminator; in real life, the teachers' unions will eat the Terminator for lunch with ketchup and a little carton of milk.

The Candidates' Catch-22: The Need to Sell Plans, When Plans Are Certain to Fail

But if the candidates' plans are worthless, why the criticism for failing to offer them in the first place? Why, in other words, can't Peter Ueberroth simply sell us his ability to get things done?

For many reasons. First, California is not calling a plumber to fix a leaky faucet and go home; it is selecting a governor. A campaign focused exclusively on fuzzy generalities about solving the state's budget crisis could leave the state with an unknown quantity on countless issues of real, everyday importance to its citizens. Where do all these people stand on services for illegal immigrants, for example?

Second, even in the upcoming budget battle, we need to know where these people stand. For some of them, the answer is obvious - Bill Simon won't raise taxes. But the leading Republican candidate is Ahnold, who has told us nothing and has little incentive to do so. Schwarzenegger (like Ueberroth, for that matter) has little in the way of a record. Where will he compromise? What are his non-negotiables? Even if he claims to tell us, why would we believe him?

Finally, when all of this is over, there is an excellent chance that the next governor of California will command the affection of an even smaller fraction of the electorate than Davis currently does. After all, the winner of the recall election might garner ten percent of the vote; Davis's approval ratings usually hover around twenty.

Numbers like these do not readily translate into mandates, and hardly suggest that the next governor is likely to succeed where the present one has not.