Photo by Ted Soqui

The Latino Legislative Caucus, which created a large stir in last year’s gubernatorial race when it withdrew its endorsement of Gray Davis, will present an alternative budget to counter the governor’s drastic cuts, the Weekly has learned. The Davis budget is expected to include huge reductions in human services even beyond his first round of proposed cuts last month, which had advocates for education, health care and the poor, many of them Latino, screaming in frustration.

The Latino Legislative Caucus met late Monday — the day of the governor’s drastically scaled-down inauguration festivities — and directed its staff to develop a menu of tax hikes and budget cuts to be considered at a three-day retreat in San Francisco starting January 17. In the next week, the legislators and their staff will examine Davis’ proposals to overcome California’s budget deficit, a horrific $35 billion over 18 months. Although it is true that the federal budget deficit is ballooning and every state has budget problems, California’s is the worst state budget crisis in American history. California’s deficit exceeds the actual budget of every state except New York.

This new move by the Latino Legislative Caucus could be quite significant. In a sense, it is similar to what the Congressional Black Caucus regularly does, providing a critique of establishment policies and creating a political pivot point for congressional progressives. But the Congressional Black Caucus represents a core Democratic constituency whose relative numbers are declining. The Latino Legislative Caucus represents a fast-growing community, especially in California, where one in three residents is Latino.

From just a half-dozen members a decade ago, the Latino Legislative Caucus has ballooned to 25 members, nearly a quarter of the 120-member Legislature. Such is the growing importance of the Latino Legislative Caucus that the new caucus chair, replacing longtime, now termed-out Senator Richard Polanco of L.A., is the most recent Assembly majority leader, Marco Firebaugh, also of L.A.

It’s a large and impressive group whose numbers, while not quite as large as the Latino portion of California’s population, exceed the 16 percent share among the state’s registered voters. And very much exceed the mere 10 percent of Latinos who actually bothered to vote last November. (Only 20 percent of Latino registered voters are Republican. Sixty-two percent are Democrats, and the rest are independents and minor-party registrants who frequently lean Democratic.)

Before last year’s dispiriting election, Latino turnout of the vote had risen in election after election. When Davis was first elected in 1998, his landslide win was buoyed by Latino voters, who made up 13 percent of the election’s participants. But the Latino vote dipped in this most recent election, reflecting widespread dismay in the Democratic base with the unrelentingly negative tone of the campaign for governor. And the Latino Legislative Caucus itself probably dealt a blow to the governor’s prospects by pulling its endorsement of his re-election in the wake of his vetoing a bill by L.A. Senator Gil Cedillo to enable undocumented immigrants to get California driver’s licenses. While head of Service Employees International Union Local 660, Cedillo helped develop several alternative budget plans in the early and mid-1990s and is involved in the current caucus planning on the budget.

Because Davis signed the controversial farm-labor bill — after the farm-workers union staged a 165-mile march and a massive rally outside the Capitol — other Latino leaders like former Assembly Speaker Antonio Villaraigosa and United Farm Workers co-founder Dolores Huerta campaigned hard for the governor’s re-election. But the rebuke from the Latino Legislative Caucus was a major embarrassment for Davis, though most members individually endorsed him.

The decision to develop an alternative budget is another major political step for the caucus, whose members are not talking on the record about the move. “Gray is going to have to listen to the Latino Legislative Caucus on the budget if he wants to get anything done,” said Huerta at Davis’ scaled-down swearing-in.

The political plan is to take their budget proposal to the Legislative Black Caucus and the Gay and Lesbian Caucus, among others, and to craft a majority of “minorities.” A decade ago, whites were 57 percent of California residents; today only 47 percent. They are hoping for a bloc of 40 votes out of the 120 in the Legislature. They’re also looking to some possible tactical alliances, perhaps with the California Manufacturers Association, on job-related issues. While Republicans fiercely assert that they will not countenance any new taxes, business leaders are less certain. California Chamber of Commerce chief Alan Zaremberg told the Weekly that he is not ruling out tax increases.

The Latino Legislative Caucus plans to work closely with the California Budget Project, a widely respected left-leaning think tank, and to coordinate its numbers with the state Legislative Analysts Office. California Budget Project director Jean Ross and other sources say that it will probably be easier for the caucus to agree on tax hikes and other revenue enhancements rather than on budget cuts. Some caucus members have been great advocates of program areas already falling under the governor’s budgetary ax, such as education and health care.

On the revenue side, reinstating the top bracket of the income tax — cut by former Governor Pete Wilson — would raise $3.1 billion. Restoring the full vehicle-license fee (also cut by Wilson) would raise $3.9 billion. Clearly, even with major cuts, that’s not enough to deal with a $35 billion shortfall.

A new 50-cents-a-pack cigarette tax backed by Davis during an earlier round of negotiations on the current budget would raise a few billion more. A sales tax on services is also talked about, which could raise upward of $5 billion. But the real money looks to be in corporate taxes, which yield far less revenue that most Californians suppose, less than a fifth the revenue from the personal income tax and less than a third the revenue from the state sales tax. Various tax expenditures, such as business tax credits, will be looked at with a hard eye, as will an increase in the overall corporate tax rate. Then there is the so-called split-roll property tax, which would alter Proposition 13 to tax business real estate at a higher rate than personal property. Depending on the various rates decided upon, these moves on the corporate-taxation front would raise billions more in revenue.

After THEGOVERNOR’S not especially glitzy Inaugural Gala — as part of the “new austerity,” Davis PR experts all but canceled the traditional inaugural ball in favor of something more akin to a noisy street fair, though there was a band and some dancing — the Weekly and friend ran into the governor at a posh Capitol restaurant where he and first lady Sharon Davis had gone with their families. Perhaps under her influence, he seemed unusually relaxed away from his typical retinue of handlers.

Davis said he knows that the struggle over the budget crisis will be trying, with other players “laying down markers” for the debate to come. Yet he seemed fine with it, even a little Zen-like, if one can momentarily invoke the spirit of his former mentor and boss, ex-Governor Jerry Brown.

LA Weekly