By Dan Balz
Washington Post Staff Writer
Saturday, December 11, 2010; 2:18 PM

SACRAMENTO – In the Year of the Republicans, California is the great exception.

Whatever force hit the rest of the country in November stopped at the California border. Democrats won every statewide office on the ballot. They increased their already hefty majority in the State Assembly and maintain a sizable majority in the Senate. Their congressional delegation remains intact, as well.

For Democrats, that is cause for celebration, given the battering they took almost everywhere else. But it is also cause for sober reflection. Are they up to the task of governing?

Now in full control of California’s government, Democrats here face the obligation of showing whether they can shake up a sclerotic status quo and turn around one of the most troubled states in the nation.

Events here last week suggest that some of their leaders are ready to try, but finding and implementing real solutions will require that they challenge their allies as much as – or more than – they compromise with their opponents.

On Wednesday, Gov.-elect Jerry Brown (D) held an extraordinary public meeting with legislators and others as he began, even before being sworn in, to lay the groundwork for a serious attempt to deal with a persistent budget crisis that has crippled state government and turned legislators into objects of derision among ordinary Californians.

A day earlier, Los Angeles Mayor Antonio Villaraigosa used a forum hosted by the Public Policy Institute of California to publicly call out the leadership of United Teachers Los Angeles. He branded the union “the most powerful defenders of the status quo” and later told me the speech marked the beginning of a campaign to challenge political orthodoxy in his party.

The two men’s styles were strikingly different. Villaraigosa was deliberately provocative and chose his venue carefully for maximum impact. As a former union organizer, he knew he would attract attention by escalating his long-standing differences with the union leadership over school reform.

Brown, the former and future governor, was more low-key, appearing deliberately circumspect about the choices he will make when he offers his own budget early next year. He will need consensus to succeed. He has long hinted that a real solution to the budget crisis will require painful spending cuts and probably new revenue sources, and he isn’t in a position to start alienating anyone.

The public policy challenges that Brown and Villaraigosa are tackling are among the biggest of this era: state and local budgets reeling from the weak economy and years of mismanagement, and public schools that are failing and in need of innovation.

California has wrestled with its budget for years, but the scope of the problem is not as well understood as it should be. Two days before Brown’s public forum, Mac Taylor, California’s legislative analyst, laid it out in grim terms.

“I have nothing but bad news for you,” he said.

The current state budget, which was just negotiated in October, is already $6 billion in the hole. The budget for the coming fiscal year faces an additional deficit of $19 billion.

What’s worse is that fixes from last year, as in many years past, were a combination of gimmicks, temporary tax increases and one-time solutions.

“We have dug ourselves a deep hole,” Taylor said.

The state cannot maintain the same approach indefinitely. At some point, there are no more gimmicks or short-term fixes. The reason California hasn’t been able to find real solutions is that Republicans opposed tax increases and Democrats opposed serious spending cuts.

On Monday, Gov. Arnold Schwarzenegger (R) declared a fiscal emergency and offered the legislature a package of proposals that he said would erase the $6 billion gap in the current budget.

The governor rightly said that action now would help make next year’s budget battle a little easier, though it was clear he was also anxious to remind people he was still in charge.

“The bottom line is I always said I would go and charge through the finish line,” Schwarzenegger said.

But after seven years, with his tenure coming to a close amid mixed reviews, his powers are diminished. Democratic legislators turned their backs on him and said they preferred to wait for the new Brown administration before re-engaging in the budget wars.

Brown’s transition has been opaque – as unorthodox as his campaign, according to people around the capital. But his public meeting on the budget, the first of several forums he plans, began the process of educating people and cajoling lawmakers.

Soon he will present the legislature and the public with hard choices, including trying to solve the budget problem without tax increases, which would mean draconian cuts in services that already have been reduced.

One major change that voters backed last month – stipulating that the budget can be approved by a simple majority rather than a supermajority – may help Brown. But voters also supported a measure making it harder to raise fees.

Brown’s challenge is mostly one of political management. The budget experts in Sacramento can find the combination of spending cuts and tax increases that would put the state’s fiscal house in better order, just as the Simpson-Bowles deficit commission offered a plan for putting the national budget on a straighter path.

What’s been missing in Sacramento is political will and political consensus. Brown has the necessary experience and knowledge of the process to surmount the budget crisis. But does he have the political skills?

Villaraigosa isn’t the only politician who is challenging public employee unions around the country, but those who have drawn the most attention generally have been Republicans. The mayor believes the leaders of the teachers union need to be confronted before they will become partners in reform.

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