11:01 PM PST on Friday, November 12, 2010

By JIM MILLER
Sacramento Bureau

SACRAMENTO – The Inland region’s GOP-heavy legislative delegation would seem to be big losers from voters’ decision last week to end the two-thirds vote requirement for the annual budget bill.

The previous threshold gave Republicans a say in shaping the legislation. Now the Legislature’s majority Democrats can pass budgets on their own thanks to Prop. 25.

But Senate Republican Leader Bob Dutton doesn’t seem worried that the initiative makes Republicans irrelevant. Democrats, he said, now have no more excuses for late budgets.

“You have to be careful what you ask for. Sometimes you get it,” said Dutton of Democrats.

California faces an estimated $25.4 billion shortfall through June 2012, the legislative analyst’s office reported this week.

Prop. 25, though, leaves intact the part of the constitution that requires a two-thirds vote to raise taxes.

Two other successful ballot measures take additional revenue options off the table. Prop. 26 requires a two-thirds vote to raise fees. Prop. 22 prevents the state from grabbing local revenue to help balance the state budget.

Fred Silva, the senior fiscal adviser to California Forward, a government-reform group, said last week’s election was “good-news, bad-news” for Democrats.

“The good news is the majority party gets to determine what the allocation of resources is. The bad news is, the options they have to finance those choices, is reduced,” he said.

As a result, say some Republicans and Democrats, Democrats still will have to deal with the GOP caucuses.

“I don’t see how they’re going to be able to pass an all-cuts budget by themselves,” said Assemblyman Brian Nestande, R-Palm Desert, who sits on the budget panel.

But Assemblyman Kevin Jeffries, R-Lake Elsinore, another budget committee member, said he is worried about Prop. 25’s consequences for Republicans.

“We’re all elected to do the best we can to represent our region and the state of California. And to do our job effectively, we need to have input into the process and the outcome,” he said.

California routinely begins the new fiscal year without a budget. Democrats blame Republican intransigence and Republicans criticize the Democratic approach.

Things reached a low point this year. Lawmakers failed to pass a 2010-11 budget until early October, on the hundredth day of the fiscal year.

By then, Prop. 25 had been on the ballot for months. The yes campaign said it would end budget gridlock and played up the piece that will dock legislators’ pay and expenses if they miss the June 15 constitutional deadline to pass a budget.

Opponents, including the California Chamber of Commerce, said it would lead to more accounting gimmickry and taxes to balance budgets.

The measure passed 54.8 percent to 45.2 percent. Inland voters had a different take: the measure failed with 47.6 percent of the vote in Riverside County and 47.4 percent of the vote in San Bernardino County.

DEMOCRATS REACT

Senate President Pro Tem Darrell Steinberg said Prop. 25 will prevent Republicans from demanding concessions that Steinberg and other critics say have nothing to do with budgeting.

Past GOP budget demands have included changing overtime rules for nonunion workers and allowing schools to contract out for gardening and other services.

“I think the leveraging has gotten out of hand. In fact it’s made our fiscal situation worse in many respects,” Steinberg said.

February 2009 budget legislation contained several measures demanded by Republicans, such as tax breaks sought by businesses. An initiative creating open primaries was also part of the package.

In return, Republicans put up the votes for something that Democrats wanted: more than $12 billion in temporary tax increases.

But of the six Republicans who voted for the tax increases, none remain: two didn’t run for re-election, three lost bids for higher office, and one is termed out.

“Prop. 25 is going to allow us to pass a budget, but how are we going to fund the budget?” said state Sen. Gloria Negrete McLeod, D-Chino. “If we’re going to need a two-thirds vote, then we’re going to be in the same place as we were before.

“I don’t think that anyone really knows how this is going to work. Everyone’s anticipating how this is going to work but no one really knows,” she said.

‘UNCHARTED WATERS’

Jean Ross, of the California Budget Project, agreed, saying Prop. 25 is “uncharted waters” for the state.

If Republicans refuse to vote for tax or fee increases, she said, then Prop. 25 “doesn’t help you get to a balanced solution.”

During a visit to the Capitol last week, Gov.-elect Jerry Brown said he thought Prop. 25 would be helpful — to a point.

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