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
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