The budget train wreck cometh

By Jon Ralston

Friday, March 20, 2009 | 2:01 a.m.

As lawmakers conduct the important business of declaring a state insect and vividly dance toward the end of the session, the question buzzing through the Legislative Building hallways is whether they can rescue the state budget, lying there like a damsel in distress, before the familiar onrushing train crushes it.

How much can the Gang of 63 do to restore elements of a budget they have derided in the harshest rhetoric ever reserved for an administration package, balancing what they believe is essential with the realities of a devastated economy? Alas, they can’t pass that one off on the fourth graders who selected the vivid dancer damselfly as the state insect.

With memories of past train wrecks fresh in many minds and the abomination of the double special-session nightmare of 2003 most redolent, the result is still very much in doubt and likely to disappoint those who want to see the Democratic leaders bridge a $2.3 billion gap or perform serious surgery on the tax structure.

And if only a minor tweaking occurs — fiddling with a minuscule payroll tax that was the centerpiece of the 2003 debacle, sticking a teaspoon into mining coffers to extract a few pieces of gold, affixing familiar Band-Aids (let’s steal from local governments!) to fill in the gaps — they will be setting the stage for The Man Formerly Known as Governor to declare the words that will make them shudder: I told you so.

From Day One, Ø has argued that he had to present a budget dramatically scaled back from 2007 service levels — more than $2 billion less — and he has challenged the frothing Democrats to show what they would do differently. If they take his slightly more than $6 billion package and change it by only 10 percent or less — as now seems likely — couldn’t he rightly argue that he wasn’t so far off, after all?

I understand the lawmakers’ dilemma. Their best laid plans — construct a substantial tax package and financial system restructuring — have been laid low by an economy that has gone from bad to worse to cataclysmic. There generally are too few vibrant corporate incomes, too few booming sales, and too few robust properties to tax.

It is a delicate balance for legislators between boosting services the administration cut indiscriminately and ensuring that they don’t further weaken an economy for residents and businesses. They don’t want education, health care and infrastructure to atrophy further, but they feel handcuffed.

What businesses can truly withstand the effects of taxation? Will they be able to present compelling numerical data to bolster suffering horror stories to make the case? How small will the plan really have to be?

There is more than the economic component, too. There is, of course, a political dynamic to consider. And it is just as delicate, centering on the youngest majority leader in upper house history.

Steven Horsford will need to be a world-class juggler by the time the session concludes. His courtship of Minority Leader Bill Raggio, key to a veto-proof margin for any tax package, has gone well so far, by all accounts. But this is a June wedding. And partisanship is always a press conference or news release away, enough to sever the tenuous bond.

Horsford also has to contend with a Democratic caucus that is occasionally restive, frequently unpredictable and always ambitious. And his alliance with Assembly Speaker Barbara Buckley will be sorely tested as sine die comes on the horizon because he has a different set of priorities, political principles and ambitions than she does. Will he want to do all she wants to, and vice versa?

Buckley and Horsford likely realize whatever they do will be labeled a partisan plan, especially if it has all 40 Democratic votes and just a handful of Republican nose-holders. The end of the session is likely to be marked by a tax package passing, being vetoed by The Man Formerly Known as Governor and then the veto overridden by the Legislature. It would be immensely helpful to have Raggio, Horsford and Buckley standing together at the end-of-session news conference, but is that really possible?

If lawmakers pass a tiny revenue package, acknowledging they are handicapped by economic conditions, they will have to explain clearly and cogently why they could not do more and how their vision differs so dramatically from the man they have excoriated all session.

Otherwise they risk turning a Ø into a hero, a man with an empty set of principles into a prescient leader who didn’t handle the economic disaster much differently than the Gang of 63 ultimately did.

That would be the worst train wreck of all.