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Interest groups complicate California’s budget woes

As lawmakers edge closer a budget deal, teachers' unions, business groups, and even the governor hit the airwaves with their demands.

By Michael B. FarrellStaff writer / July 14, 2009

In May, the California Teachers Association and the Alliance for a Better California staged a mass demonstration in Los Angeles against Governor Arnold Schwarzenegger's policies. Thousands of teachers, nurses, firefighters, police, and union members rallied in Pershing Square, demanding the Governor back off on his education and pension reform agendas.

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One major player in California's budget impasse is showing no sign of budging – the special interest groups that pressure lawmakers on almost every key funding issue.

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After a day of some success in easing the political gridlock around California’s fiscal crisis, some Sacramento lawmakers and observers are hopeful that Democrats and Republicans will agree on a spending plan before summer recess begins Friday.

But hit by tough financial realities, business groups, the teachers’ union, and public employees have dug in their heels to safeguard their piece of the budget pie, as the state struggles to close up a $26.3 billion shortfall. And some are appealing to the public in a bid to keep the pressure up.

“Our budget process is really driven by the interest groups and the apparent inability of elected officials to shut everyone out of the room and do the work [on the budget],” says Doug Heller, executive director of the California-based Consumer Watchdog.

Interest groups take to the airways

The State Council of Service Employees, the California Teachers Association (CTA), and even the Marijuana Policy Project have produced TV spots advocating their position on the state’s fiscal woes – respectively, raise taxes on big business, protect educational spending, and tax and regulate recreational marijuana usage.

Gov. Arnold Schwarzenegger will take to the airwaves Tuesday, too. He’ll defend his steadfast demand that lawmakers balance the budget without increasing taxes and instead make tough cuts to state services.

The dueling ads reveal how important public pressure is becoming in the legislative fight over California's troubled finances. And they illustrate the power that special interest groups have over California's annual budget negotiations.

“Pressure is certainly coming from all the vendor groups … and groups whose next decision is based on what their final allocation will be. The start of school is only six weeks away,” says Barbara O’Connor, director of the Institute for the Study of Politics and Media at Sacramento State University.

The CTA, for instance, is ramping up its campaign to prevent the governor from suspending a state mandate that sets aside 40 percent of the general fund for education. That would lead to even bigger classes and further cuts to teaching staffs, the association says.

Lawmakers are also considering a severance tax on oil and natural-gas extraction to help fund education programs. But petroleum industry lobbyists have staved off such efforts before, helping make California the only oil-producing state without an oil-severance levy.

California lawmakers more vulnerable to pressure?

While lobbyists play a significant role in any state's budget process, experts say California lawmakers have become uniquely prone to outside influence because of strict term limits approved by voters in 1990. Assembly members are limited to six years in office and senators are limited to eight years.

“Interest groups, which of course have no term limits, can wield influence disproportionately in this kind of environment,” says Larry Gerston, a political science professor at San José State University.

Limited terms mean that lawmakers don’t have time to build up the political clout needed to take on powerful lobbyists, experts say. The state’s budget crises have been brokered in the past by longer-serving legislators, but few of today’s politicians wield that sort of power.

“In a term-limited environment, with a lot of politicians who tend to operate out of fear more than foresight,” says Consumer Watchdog's Mr. Heller, “the institutional memory resides in the lobbyist community.”

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