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California Budget Crisis Adds to Uncertainty in State Politics

California, America's most populous state, is wrestling with the biggest budget deficit in its history, while the state's governor, Gray Davis, faces a recall effort that has added to uncertainty in the state. The recall drive is gaining momentum, but state officials are far from an agreement on the budget.

California is facing a double crisis. The first is an unprecedented deficit of $38 billion spread over two years. In a recent voter survey, most Californians blame the governor and state legislators and are pessimistic that either can solve the problem.

But most of the anger focuses on the governor and a recall effort, the most recent of 31 recall drives against the state's top official, is the first to have much of a chance of succeeding. Los Angeles resident Brad Schulz signed the petition to force Mr. Davis out of office.

"I think he's acted irresponsibly and he's gotten us into this huge deficit situation and he hasn't taken the appropriate action to get us out," he said.

Analyst Mark Baldassare of the Public Policy Institute of California says many in the state agree the governor should go.

"About half of Californians in our most recent survey said they would be willing to vote to recall the governor," he said. "But I have to tell you that until we know who will appear on the recall ballot for the governor, we don't have the list of who will take his place at this point and we think that when the voters see that list, they will probably respond to the recall question differently."

Under the rules that govern the recall, those who want the governor out must collect some 900,000 signatures. Recall organizers say they have half the needed signatures so far.

If the recall measure qualifies for the California ballot, all of the state's voters will get the chance to vote on it. At the same time, they will select Mr. Davis's successor, who will take office only if the recall measure passes.

The recall drive has excited Republicans, who see it as their best chance to take power in Sacramento, where they hold no major state office and are a minority in both the state assembly and senate. But the effort worries business leaders, and the state's major business group is on record opposing the recall.

Jack Kyser of the Los Angeles Economic Development Corporation says the state's financial condition is shaky, threatening schools, community colleges and public services.

"Right now, we're operating on borrowed money, and probably will run out of funds about the middle of August," he said. "And somebody has asked, do you think you'll get a budget by that time? And given what's going on in Sacramento, I would say no."

The fiscal crisis stems from a drop in revenue from state taxes after the high-tech bubble collapsed two years ago. As budget talks continue, there is near-gridlock in the state capital, where Democrats refuse to cut social programs and Republican's won't raise taxes. Governor Davis has had no success in forging a compromise.

Mr. Baldassare says the contradictory views of California voters show why the impasse is so difficult to resolve.

"Most Californians don't like the idea of cutting the basic services which are provided by state government, public schools, health and human services, higher education, transportation and infrastructure programs. And at the same time, most Californians are not very enthusiastic about raising taxes," he said.

Legislators passed a June 30 deadline without reaching a budget agreement, as Democrats quickly rejected a Republican proposal for deep cuts in education and prison spending. Republicans oppose a Democratic proposal for a half-percent increase in the sales tax.

There is little movement on the budget, but supporters of the recall say their drive is on schedule. The outcome depends on two factors: First, how quickly anti-Davis forces collect petition signatures. If they meet a July deadline, state officials will schedule a special election for later this year. If they meet a September deadline, the issue will be decided in the primary election next March.

A fall special election will bring out many Republicans, but few Democrats, who may support the governor, but with little enthusiasm.

A March election would bring out Democrats in force as they vote to select their party's presidential nominee. While at the polls, many are likely to vote against the recall.

Gray Davis himself may also determine the outcome of the recall. He has launched a counter-campaign, and in the past has proven himself to be a wily politician.

If the recall effort succeeds, possible Republican replacements include Darryl Issa, a wealthy congressman who is financing the recall drive and actor Arnold Schwarzenegger, who says he may be interested in running for governor. He could well trade off his tough-guy Hollywood persona. His latest film is Terminator 3.

California's top Democrats have rallied behind Mr. Davis, but analyst Sherry Bebitch Jeffe says that could change. If the recall seems likely to be successful, Democrats may enter the fray to compete with Republicans for the governorship. Ms. Jeffe says she won't make any predictions on the outcome.

"You see, it's impossible to tell quite frankly how this will play out," he said. "I do know one thing, however, and I've made the suggestion only half in jest that because the grand prize for whoever might win the governorship if the recall passes is simply to inherit the mess we're in now, my suggestion is that anybody who files to run for governor in the recall be given a sanity test."

The analyst expects a tense time ahead for the people of California, and a bloody time ahead for the state's politicians.