Time for GOP to get serious on budget, dems on water

California Focus

By Tom Elias

(Updated: Friday, April 18, 2008, 9:03 PM)

As will surely become clear when the hot days of summer arrive about two months from now, California now confronts two problems more threatening to more people than any other current ones: the state budget deficit and a looming water crisis.

Yes, other problems affect tens of thousands of Californians, including the continuing spate of home foreclosures caused in large part by the real estate bubble that built through most of this decade and the questionable lending and borrowing practices that fueled it.

But unless the budget crunch is resolved, vital state services including schools, state parks, highway repairs and fire protection will be seriously diminished from levels that were often inadequate before.

And unless the state settles on new tactics to resolve longstanding water issues, they will become far more urgent as a so-far uncontested court decision mandates severe reductions in water pumped from the delta of the Sacramento and San Joaquin rivers. Besides that looming man-made water shortage, there's also the issue of climate change, considered by most scientists as likely to sharply reduce Sierra Nevada snowpacks that supply most of the state's water.

But legislators whose votes are needed to solve both these problems remain adamant in opposition to practical solutions. Republicans won't accept a budget solution involving any kind of tax increase, even one as obvious as closing loopholes benefiting only wealthy special interests. And most Democrats refuse to acknowledge the easily apparent coming need for more water storage, whether in reservoirs behind new dams or by pumping supplies into underground aquifers in times of brief winter surpluses.

Both stances are unrealistic and spurred by fears of political retribution. Republicans have seen colleagues who bolted party lines to vote for budget compromises driven from office by hard-line no-new-taxes primary election opponents. Democrats fear being blackballed by environmentalists for whom "no" is the knee-jerk answer to any new water storage proposal.

Both sides are in this situation in large part because of the current highly gerrymandered legislative districts, which make most state Assembly and Senate seats safely Democratic and others safely Republican. There's little room for non-doctrinaire compromisers in either party these days.

But California needs compromises. In these bad economic times, it's not feasible to place large new tax or fee burdens on the state's populace. But closing loopholes or restoring levies to previous levels is another matter, so long as they are the right ones.

For instance, rolling back the vehicle tax reductions of the late 1990s -- as ex-Gov. Gray Davis attempted before being recalled in 2003 -- would produce about $6 billion toward keeping the public school teaching workforce at current levels, rather than following through on thousands of pink slips already issued this year. There's also the well-publicized "sloophole," which lets Californians avoid sales taxes on boats, cars, trucks and airplanes by buying them in other states and holding them there for 90 days after the purchase.

There's also a sales tax exemption on racehorses sold for breeding and there are breaks for businesses that hire handicapped workers or workers who have been unemployed for long periods. Oil companies here do not pay extraction taxes for drilling California crude, as they do in virtually every other state.

Eliminate enough of these and you'd raise sufficient funds to at least end the current threats of larger public school class sizes and much higher state college and university tuitions and fees.

All these things could be done without touching the single largest special interest tax loophole, the homeowners exemption which helps keep property taxes down on virtually every owner-occupied residence in California. A time of foreclosures like today probably is not a good time to end this one.

In short, a lot of loopholes could be closed at a cost of about $300 per year per family. The question yet to be answered: How many Californians consider the services saved by such a tax hike to be worth the money?

Meanwhile, the water crisis festers. Many Democrats and environmentalists believe it can be resolved by conservation. But Californians have conserved water better than any other Americans for the last 25 years, since the droughts of the 1970s and '80s spurred large-scale use of things like low-flow toilets and shower heads and bans on watering lawns during the hottest times of day.

But population increases projected to continue at least 30 more years make it plain this won't be enough. Meanwhile, most legislative Democrats won't even attend meetings to talk about water storage.

All of which means it's time for both Republicans and Democrats to put aside their fears for their own political skins, focus on what's best for California as a whole and get out of their respective parties' lockstep default positions.

Failure to do that, and soon, will be a sure sign that they simply don't take the state's major problems seriously enough to solve them.