March 11, 2011


California’s top lawmakers have publicly distanced themselves from budget talks between five Republican senators and Democratic Gov. Jerry Brown. Behind the scenes, they have played key roles moving them along, according to people familiar with the matter.

Sen. Bob Dutton, the Republican minority leader in the state Senate, has voiced opposition to the budget plan from Mr. Brown. But several weeks ago he assigned a pair of top staff members to help the five moderate Republican senators negotiating with the governor craft their proposals, some of these people said. These proposals include revisions to the pension system for public employees.

If enough changes are agreed to by Mr. Brown and Democratic legislators, at least some of the five Republicans—Sens. Tom Berryhill, Sam Blakeslee, Anthony Cannella, Bill Emmerson and Tom Harman—are likely to support Mr. Brown’s plan to ask voters to extend several tax increases. A compromise on how to close the state’s $26.6 billion deficit could be unveiled within days.

A spokeswoman for Mr. Cannella declined to comment. Spokeswomen for the other senators didn’t respond to requests for comment.

Mr. Dutton and Sen. Darrell Steinberg, the Democratic president pro tempore of the Senate, have each met with members of the moderate GOP group, said some of these people familiar with the matter.

In addition, Mr. Steinberg last month approved a $20,000 contract to hire a former state finance director and a longtime legislative staffer to help the Republicans with their proposals for the negotiation. The consultants, Michael Genest and Peter Schaafsma, are now partners at Capitol Matrix Consulting, a Sacramento firm. The Republicans have asked the consultants to analyze some options for pension changes as well as a spending cap.

The indirect involvement of Messrs. Dutton and Steinberg in the current talks carries political risks. For Mr. Dutton, aiding an effort that could result in an extension of tax increases puts him at odds with most of his fellow Republicans in the Senate. Many in Mr. Steinberg’s Democratic caucus oppose dramatic pension changes and other Republican proposals, and could question their leader’s role in any compromise on those matters.

The legislative leaders, especially Mr. Dutton, see their private help as a way to influence any budget deal while tempering the political consequences of being seen as making concessions to the other party, said some of the people familiar with the matter.

In a letter earlier this week, the group of five GOP senators said they wanted to “require responsible state spending” and “eliminate abusive pension practices,” among other ideas. A spokeswoman for Mr. Dutton said the minority leader “continues to provide support for the efforts to achieve the needed reforms the [five senators] outlined in their letter to the governor.”

Mr. Steinberg, said a spokesman, “continues to have talks with the governor, the [Speaker of the Assembly John Pérez] and other lawmakers in the hope of reaching a successful conclusion to this budget problem sooner rather than later.”

A spokesman for Mr. Brown referred questions about the legislative leaders’ involvement to those leaders.

Former Gov. Arnold Schwarzenegger used to focus on talks with legislative leaders in the Senate and Assembly, a group called the “Big Five.” Mr. Brown has publicly eschewed that approach in favor of working with rank-and-file lawmakers.

Mr. Brown has said he was willing to compromise in some areas, including changes in pensions and regulations. He has proposed $12.8 billion in cuts and fund shifts, along with $14 billion in additional tax revenue. Some of the extra revenue would come from extending several 2009 tax increases for five years, a proposal that Mr. Brown hopes to take to voters in a special election.

To call the election, Mr. Brown needs support from two-thirds of the legislature, a group that must include a handful of Republicans. The governor hopes to woo Republicans with policy changes to the public-pension system, spending rules and possibly other compromises, but he has said he couldn’t go too far without losing Democratic votes.

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