Rivals Take a Stab at Budget

Amid the circus that is California’s recall election, two candidates -- Bill Simon Jr. and State Sen. Tom McClintock -- are courting the Republican Party’s conservative voters by focusing on the state budget crisis and vowing to fix it with cuts in both taxes and spending.

Although public anger over the budget sparked the recall, few candidates are talking about the problem in any detail. Simon, who as the Republican nominee in 2002 narrowly lost to Gov. Gray Davis, and veteran legislator McClintock both are presenting themselves as budget experts.

Investment banker Simon says his business acumen is just what California needs, while McClintock calls himself “the foremost spokesman in California on conservative fiscal policy and state governmental waste.”

Although other major candidates were still plotting strategies out of the public’s view, Simon and McClintock both were on the campaign trail Tuesday and often sounded the same themes -- though neither has offered a detailed budget plan of his own.

At a Stockton In-N-Out Burger, Simon promised to boost state revenue by creating jobs.

He railed against “job-killer bills” such as the workers’ compensation system and the recently approved tripling of the vehicle license fee, saying he would reverse the fee hike.

“The first thing I would do,” Simon said, “is call the heads of state agencies in, say I need them to help me by giving me 5% cuts within 100 days.

“If they can’t do that I will find someone else to run those agencies.”

McClintock, in an interview, criticized “regulations that are choking our economy.” Two at the top of his list: the workers’ compensation system and the increased car tax. Already, McClintock has accused Simon of mimicking his approach.

“They’re pretty much a repetition of proposals I’ve made over the years,” he said of Simon’s economic plans.

“He’s calling for a 5% across-the-board reduction; last January I called for a 9.5% reduction, which would have avoided the budget deficit without borrowing,” he said.

In addition to cutting back the car tax and reforming workers’ compensation, Simon’s campaign staff said, he would cut welfare programs by tightening eligibility requirements and time limits for payments. In a radio appearance Tuesday, Simon said that he favors a two-year budget cycle and that an audit of state government would save $4 billion to $5 billion.

He also would impose a state hiring freeze and seek efficiencies in state government purchases, his staff said.

Both Simon and McClintock want more government services privatized, an idea promoted by the Reason Foundation, a Los Angeles group that both men cite in interviews.

McClintock said he would model a Bureaucracy Reduction and Closure Commission, after the federal body that picked military bases for closing, and eliminate obsolete state boards, to save another $6 billion. If lawmakers balked, he said, he’d create it by executive order.

“I’m saying the same things I’ve been saying for 20 years,” McClintock said Tuesday. “That the state’s future depends upon rolling back the taxes and regulations that are choking our economy, pulling back the bureaucracy and restoring our public works.”

Now is the time, he said, because the state’s budget crisis has focused attention on fiscal issues as never before: “This is one of those rare elections where the public is completely mobilized and is focused on the politics of state government.”

In his radio appearance, Simon echoed the sentiment. He called the recall “a once-in-a-generation type situation with a terribly unpopular governor with very serious crises led by the financial crisis.”

Simon and McClintock both have called for constitutionally limiting government spending increases to the rate of population growth and inflation. But David Doerr, chief tax consultant for the business-backed California Taxpayers Assn., expressed doubts that a Democratic Legislature would allow such a proposed amendment on the ballot. That would force Simon or McClintock to seek the change through the initiative process.

Economist Stephen Levy, director of the Center for the Continuing Study of the California Economy, said the criticism that spending increases exceeded population growth and inflation can be explained by the fact that the school-age population has grown faster than the overall population and that health care cost increases have often exceeded inflation.

Levy said economic growth alone cannot balance the budget. “If they are arguing the California economy can grow so much the deficit will go away, no one agrees with them,” Levy said.

The billions of dollars needed to correct a structural imbalance in the budget, Levy said, means deep spending cuts or tax increases will be required. He questioned whether any candidate could pass meaningful spending cuts, because the spending increases in recent years have primarily been in education and health care and were backed by both parties.

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Times staff writer Jeffrey L. Rabin contributed to this report.