Recall won't end California's woes

HARDLY ANYONE noticed -- the political horror show was too entertaining -- but two weeks ago a judge in Sacramento put a serious dent in the notion that California can paper over its gargantuan governmental problems with debt. By California standards, it was not a huge amount of money -- $2 billion -- but it represents the tip of an iceberg of debt more than five times larger than the sum that has been used to hold government together while the politicians try to resolve the worst case of gridlock in the country.

To make matters worse, other parts of a hasty agreement last spring between legislative leaders of both parties and Governor Gray Davis to tide the place over for another year have either not been put into effect as planned or have encountered serious difficulties that make their implementation doubtful.

The result is that while the outcome of today's recall election may be of vital interest to the Democratic and Republican parties and to the candidates involved, it is by no means likely that the result will help the state solve its problems without still more political chaos.

There is no sign that continued Democratic occupation of the governor's mansion will change the equation Davis has had to contend with -- an absolute refusal by Republican legislators to consider any budget solution that increases any tax, thus blocking the two-thirds majority that California's Constitution requires for the enactment of budgets.

Nor is there any sign that an Arnold Schwarzenegger "victory" in the election after a strictly partisan campaign will interest Democratic legislators in eviscerating the state's health care programs, economic infrastructure, and environmental protections to redeem a patently silly vow to solve the problem without higher taxes and no cuts in the roughly 40 percent of the budget that funds education.

To put the mess in more crassly political terms, continued Democratic rule (Davis or Lieutenant Governor Cruz Bustamante) would follow a campaign in which most Republicans would be convinced that victory over Schwarzenegger came only with the aid of dirt.

Conversely, Schwarzenegger would only become governor after a process most Democrats consider a flagrant abuse of a constitutional protection for partisan purposes. Worse, he would take office under a dark cloud -- repeated, specific, and corroborated accusations of what amounts to sexual assault that remain unchallenged.

Worst of all, for those out here with the quaint notion that elections resolve disputes, the arithmetic likelihood borders on certainty that "victory" by Bustamante or Schwarzenegger after approval of Davis's recall would occur with fewer voters having picked his successor than chose to retain Davis. That's some mandate in a flawed system that failed to provide for a majority-producing runoff between the top two finishers.

It is the budget mess itself, however, that poses the biggest obstacle to its resolution. When the situation was papered over last spring, cutting a looming $38 billion shortfall by roughly 75 percent, the key to the deal was debt via bond sales, whose legality is now in doubt.

In Sacramento the Superior Court ruling cited constitutional provisions that date nearly to the state's creation forbidding debt of more than a few hundred thousand dollars for the financing of routine government operations without an approving referendum. The problem is that the $2 billion, five-year bond sale in question was arranged to fund this year's public employee pension contribution so the state's general fund would be less in deficit. As a result, the state last week missed the due date for a half-billion contribution to the pension fund.

This ruling bolsters another lawsuit challenging the budget deal's most important component -- a $10 billion bond sale that is literally designed for budget-balancing and would thus appear to meet the classic definition of deficit financing.

There is much more that is going wrong. One example is a virtual tripling of the vehicle license fee, a $4 billion revenue item in the spring budget deal. Everybody in politics officially hates the so-called car tax, but if a repeal of the increase is enacted, the state's budget hole automatically deepens by that amount -- and nobody in politics has been willing during the campaign to deal with that likely reality. There is also the small matter that the budget already has an $8 billion hole in it left by the legislative negotiators.

In addition, Schwarzenegger -- in one of his few specific proposals -- has vowed to renegotiate the state's labor union contracts and to muscle its 61 Native American tribes into making large payments to the state in lieu of taxes on their gambling casinos.

It sounds like tough, conservative government talk, at least until one realizes that Davis has been about the same task this year with groups who have solidly supported him politically, and has little to show for it. In an effort to save nearly $2 billion, he has so far won at most $600 million in concessions (no 5 percent pay raise in return for no more layoffs), but only $2 million from the tribes. To suggest that Schwarzenegger could go deeper with groups he deliberately antagonized during the campaign is preposterous.

The idea that elections resolve arguments is about to be disproved. Apart from the egos directly involved, the real winner this week is likely to be politics, not governance. Only compromise can fix problems this big, but the recall has produced only polarization.

Thomas Oliphant's e-mail address is oliphant@globe.com.