Recall: Postponing recall may not help Democrats

A recent federal court decision may delay the California recall
election, possibly until March when a presidential primary is
scheduled. The common wisdom among political observers is that such
a delay would help the Democrats. Democrats will turn out
disproportionately for the presidential primary and will also vote
against the recall and for Lt. Gov. Cruz Bustamante, so this
thinking goes. Plaintiffs in the lawsuit to delay the recall may
well have had the same idea, but delay may have just the opposite
effect.

While the presidential primary could turn out more Democrats if
the recall is delayed until March, the state’s precarious
budget could turn out more pro-recall voters and more
Republican-leaning voters. This past August, a budget for the
fiscal year 2003-2004 was signed into law by Gov. Gray Davis. But
that budget depends on massive borrowing and assumes revenue that
may not be forthcoming. The borrowing involves a so-called deficit
financing bond of $10.7 billion, a pension bond of $3 billion and a
tobacco bond of $2 billion. All of these are subject to legal and
market challenges. For example, the deficit financing bond was
enacted without a vote of the people, something normally required
by the state constitution for General Obligation debt.
California’s state controller, Steve Westly, says he needs $3
billion in “revenue anticipation notes” to have enough
cash to pay the state’s bills. These notes are supposed to be
sold in September but, as yet, State Treasurer Phil Angelides has
not issued a prospectus for them. It appears he is having trouble
on Wall Street arranging the sale of the notes, given
California’s deteriorating credit rating.

If California is unable to float its various bonds, the August
budget deal may unravel and require new and painful spending cuts
for the current year. That will not win votes for Davis or
Bustamante. In any event, even if the current year’s budget
holds, the governor must present a new and detailed budget for the
next fiscal year in January. With a delayed recall election, Davis
would be forced to present a new budget which will inevitably
propose tax increases and/or more spending cuts. The other
candidates could remain vague about their budget solutions, but not
Davis. Proposals for increased taxes or decreased spending will
again cost Davis votes. And the details of the governor’s
January proposal will automatically be reviewed by the nonpartisan
Legislative Analyst who will point out any inconsistencies.

In short, when the budget is factored into the equation, it is
likely that Davis and Bustamante would be better off with a quick
Oct. 7 recall rather than a delay until March. Recent polls show
that a declining share of the electorate would vote for a recall.
If the trend continues, Davis might not be recalled at all. And if
he is, of all the candidates to succeed Davis, Bustamante seems to
be leading. Those pushing the lawsuit to delay the recall may have
thought they would be aiding the Democrats. They are probably
wrong.

Mitchell is Ho-Su Wu chair in management at The Anderson
School at UCLA.