While legislators enjoy their home districts this weekend, Gov. Jerry Brown is drafting a pension reform proposal in hopes of persuading enough Republicans to support his budget.

Brown anticipates his changes to the state pension system will convince at least four GOP legislators to allow his $12 billion tax initiative on a June ballot, which plays a key role in his budget. At the same time Brown must keep his own party and supporters unified behind his $12.5 billion in budget cuts, and his pension proposal that’s soon to arrive. 

Should the tax extension measure never make it onto a ballot or fail to gain approval of voters, it could mean a $25 billion slash to public services, including a possible $5 billion hit to K-12 public education.

So far no Republicans have agreed to put his initiative on the ballot. 
Instead the measure inspired a California Taxpayer Caucus of 30 GOP legislators who vow to block it. 

Adding to Brown budget woes,  the five Republican senators he has been negotiating with declared a stalemate last week.  This “GOP 5,”- -Sen. Tom Berry Hill, Sen. Anthony Cannella, Sen. Tom Harman, Sen. Sam Blakeslee and Sen. Bill Emerson--say the state needs drastic change including a firm spending cap and pension reform before a tax hike can be pushed.  

The redistricting to come this year and the enormity of a $25 billion funding slash could persuade a few Republicans to support the governor, but so far Brown has had no such luck.

Lawmakers within Brown's own party already grumbled about some of his spending reductions, significantly reducing his cuts to welfare-to-work and Medi-Cal. Many legislators also disapprove of the governor's push to eliminate redevelopment agencies and to shift $6 billion in services onto local governments.  Most of his Democrats will most probably also dislike his proposed pension reform.

And even if the governor gets everything he wants, it still means massive spending reductions for California.  Environmental protection will be cut by 16 percent, health and human services by 22 percent,  higher education by 16 percent and the legislative, judicial and executive branches by 21 percent compared to the 2010-11 fiscal year.

Of course last fiscal year wasn't pretty either.

Former Gov. Arnold Schwarzenegger had to close a $19 billion deficit, and he and his legislature could not reach a budget agreement for a record-breaking 100 days.

In an effort to avoid that kind of deadlock and allow enough time to get his tax initiative on a June ballot, Brown declared March 10 to be his deadline.

Well, the countdown is over and the governor still has a long way to go.

Pushing The Legislature Through Cuts And Taxes

It’s all a balancing act,” said said Raphael Sonenshein, chairman of Cal State Fullerton's political science department.

A couple measures on pensions or spending could give political cover for some Republicans to support the taxes, he said, but if the bills reach too far Democrats will refuse to vote for them. 

It’s unclear whether they will support pension reform. So far Senate President Pro Tem Darrell Steinberg said Dems would consider putting a five year spending cap in place while the proposed taxes take effect.

But it looks like Republicans willing to support a tax hike may require more than that. They need business to protect them from internal tea party challenges, said Sonenshein.

And there’s no way to tell whether that’s going to work or not,” he added. 

Unfortunately for Democrats, many Republicans do not trust them with respect to the budget.

We don’t think they have the votes for even the first round of proposed budget cuts,” said Jann Taber, spokesperson for Sen. Robert Dutton, the Republican Senate majority leader.

Steinberg confirmed his caucus will back the $12.5 billion in cuts, but Assembly Speaker John Perez did not return phone calls on the matter.

Of course there's no surprise Brown feels some resistance from his Democrat-controlled Legislature. His budget takes funding away from the popular welfare-work and Medi-Cal programs, and slices away jobs from members of powerful public employees unions.

Republican leadership, on the other hand, demands Brown take the cuts even a step further by making them permanent.  It will avoid what Taber called the budget's  "Groundhog  Day" effect, referring to a movie where actor Bill Murrary repeats the same day over and over.

"We've been here before," she said.

Republicans also seek other reforms such as a budget spending cap and pension reform, mentioned earlier, plus changes to state regulation and merit-based employment in state government, said Taber.

She would not confirm whether Republicans would pass the tax extensions in exchange for some of these reforms, but so far it looks like the GOP 5 might.

Brown's Strategic Advantage

One factor working to Brown's benefit with Republicans is the anticipated redistricting Republican legislators with safe seats may soon find themselves in  competitive districts and it could persuade them to vote for the taxes, said Sonenshein. 

Some Republicans may also comply with the taxes because it could be better to defy the anti-tax people than to shut down all the public services that a $25 billion cut would require, said Sonenshein. Those Republicans willing to compromise on the budget could also avoid Democrats unfairly distributing funding cuts into their districts.

The California Teachers Association, a major state lobbying force, has already started trying to persuade Republican legislators from Modesto and Fresno to put the taxes on the ballot, said CTA president David Sanchez. 

When asked whether Democratic leadership is also trying to sway central valley representatives,  Steinberg's office would not comment on the record.

The offices of neither Sen. Tom Berryhill (R-Fresno) nor Sen. Anthony Cannella (R-Modesto) immediately responded to messages from Neon Tommy.

Of course even if pro-tax groups persuade enough GOP legislators to cross the tax line, the measure still needs to face a vote of the people in June.

"You're in an odd numbered year, not a good time for Democrats," said Sonenshein. "However, if the taxes are on the ballot organized labor will put on a fierce campaign."

He believes the taxes have a good chance of passing because they have labor  support, and the business community won't involve itself in the fight.

"[Business leaders] know if the extensions don't happen then the next step will be to go directly after them," said Sonenshein.

If the tax extensions do fail,  Brown and his legislature will need to close another $12 billion hole on top of the one they're already trying to shut.

Tax Failure

Sen. Mark Leno (D-San Francisco), head of the budget committee, asked the Legislative Analyst Office, a non-partisan state department, for a budget assuming the tax extensions don't happen.  It includes an additional $9 billion slash to public education and public safety.

"I don't know who--Democrat, Republican, man, woman, fifth generation immigrant--thinks those cuts are a good idea," said Nathan Berkankan, spokesperson for Steinberg.

California special interests groups disagree with the LAO budget analysis and the additional $12 billion in possible cuts. The California State Employees Association said the LAO recommendations would violate its contract with the state, which restricts cuts and furloughs, and the California Teachers Association said the public education system cannot take any more funding slashes.

"I mean, where would you take the money out of ?" said CTA spokesperson Sandra Jackson.

Some also believe releasing the LAO report to be a dicy political strategy.

"There's a risk Republicans say, 'Go ahead. Make the cuts,'" said Sonenshein. "There's another risk that voters become skeptical of the theoretical cuts and end up seeing it as a lot of nonsense."

Sen. Mark Leno did not answer questions about the LAO report he ordered or respond to interview requests.

Brown has said if the tax extensions fail, his proposal will be a cuts only budget.

If Republicans refuse to put the taxes on the ballot, they will ultimately be blamed for the potential $25 billion in cuts, said Sonenshein. If Brown gets his measure on the ballot and then it loses,  he'll lose credibility and the relative unity of his party.

Either outcome will lead to a drawn out budget battle, as special interests will fight to save their sectors from additional funding slashes that another $12 billion cut would require and public services try to cope with funding delays.

Lucky for the public sector and those who enjoy its services, the situation isn't quite there yet.

In the meantime, Brown must hold his party and supporters together--even through possibly tough pension reform-- and persuade a few Republicans to support his cause while convincing the Californian people that $12.5 billion in cuts and $12 billion in tax hikes is a good idea.

Reach reporter Madeleine Scinto here.