California Policy Options 2010

Page 143

you’re going to do; you’re going to get somebody,

By pushing revenue and programs down to the local

oh, Schwarzenegger, he’s rich, he’s famous, he’s

level, the proposal avoided Prop 98’s requirement that

got a wife who’s a Kennedy… (But) running an

new state revenue—such as would accrue under the

initiative campaign like Proposition 49 is not even

governor ’s tax increase proposal—be partly earmarked

in the same ballpark as running for governor… He

for K-14 education. Despite the budget squeeze, an

might think it is… But it’s not.”

50

expansion of Healthy Families was proposed, i.e.,

covering more working poor children with public

DAVIS’ FINAL BUDGET: 2003-04

health insurance. But there were cuts in other social welfare programs. Additional but uncertain revenue from Indian gaming was projected. The governor suggested the Regents should invest UC pension funds in home construction to create jobs and affordable housing—a suggestion that went nowhere.

“I’m greatly honored to be able to lead California for the next four years. There’s no question I’ve been tested by adversity, but I’m stronger and tougher and

One proposal that Davis did not make at the time,

more determined to do a good job.”

but that was already percolating in Sacramento, was

—Governor Gray Davis interviewed in early January 2003

51

triggering a hike in the Vehicle License Fee (car tax). When the car tax had been cut earlier—taking money away from local governments which the state then

Unlike what was possible at the beginning of his first

backfilled—a trigger provision had been included.

term, Governor Davis could not promise major new

The trigger would raise the tax back up if there were

gains in education as his fifth year and second term

insufficient state funds for the backfill. In the prior year,

in office commenced. There was talk about obtain-

Davis had proposed raising the car tax but his proposal

ing additional support from the federal government,

then was not accepted in the earlier budget deal.

protecting homeland security (post 9-11), and creating jobs by releasing previously-authorized bond funds

It was unclear exactly who would pull the trigger

for infrastructure. In his State of the State address, the

or exactly how a determination of insufficient funds

governor asked for more authority to make midyear

would be made. Later in 2003, however, as the recall

budget cuts, a proposal which Republican legislators

loomed, the car tax trigger became a major campaign

supported but to which Senate President John Burton

issue. But in January, the governor made a point of

responded with “not in my lifetime.”

52

Davis vowed

explicitly opposing any increase in the car tax or even

to reject any budget that did not contain structural re-

enacting a bill that would clarify the trigger. However,

form (the precise nature of which was not spelled out).

there was pressure from local governments to hike the car tax. Jerry Brown, then mayor of Oakland, suggest-

When his January budget proposal was released for

ed that Davis “with the stroke of a pen” could raise the

2003-04, it contained proposals for income tax, sales tax,

car tax so that “we can restore vital police services.” 5 4

and tobacco tax increases. Senate minority leader Jim Brulte, however, quickly declared that he was “not going to vote for a tax increase.”

53

A new wrinkle in the

For local governments, the issue wasn’t the car tax per se but that the governor was proposing that the

proposed tax plan was that the revenue would be shift-

state stop paying the backfill while not raising the

ed down to counties—framed as fiscal “realignment”—

tax. It appeared that Davis—realizing that the car tax

along with responsibilities for various state services.

was a major issue for Republicans—was resisting the

143


Issuu converts static files into: digital portfolios, online yearbooks, online catalogs, digital photo albums and more. Sign up and create your flipbook.