Rescue California

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Recall Backers Assert Victory in Signature Drive
Organizers of the move to oust Gov. Davis pull petition workers out of the field, saying they now have the support to force an election.

July 08, 2003

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through Sunday, where Republicans would propose cuts that will likely be rejected by Democrats.

Wesson added his voice to those accusing Republicans of trying to use the budget debate as an opportunity to inflict further damage on Davis.

"I do believe there are individuals that would be willing to take California to hell to take out Gray Davis, and I'm appalled by that," said Wesson.

In a statement, Brulte disputed that. "The Democrats' inability to reduce spending is the reason we don't have a budget," the Republican leader said. "Their desire to overspend is the only obstacle."

In their comments to reporters, Angelides and Westly said the recall was adding to Wall Street's uneasiness toward California and could be a contributing factor to a downgrading in the state's credit rating. That could cost California taxpayers hundreds of millions of dollars in additional borrowing costs, they said.

Recall supporters, however, rejected suggestions that their effort was responsible for the budget quagmire or the state's flagging economy.

"The budget impasse last year went until September and there was no recall, so that allegation is ridiculous," said Gilliard. "As far as the state's economy, recalling Gray Davis is the best thing we could do for the state economy right now."

Both Moody's Investor Services and Standard & Poor's put California on notice last week that they are poised to downgrade the state if a balanced budget is not passed soon. Such a downgrade could cost California taxpayers as much as $850 million on bonds that have been approved but not yet issued, Angelides said.

S&P told investors the warning reflects "the state's lack of progress in adopting a fiscal 2004 budget and the diminishing prospects that meaningful structural budget reform will result from an enacted budget."

The S&P report advised that "passage of a new budget may also be delayed due to the increasing likelihood that a recall petition for the governorship will make the ballot."

But the recall wasn't the only problem the bond raters at S&P saw. Their report also cited "the large number of relatively new and inexperienced legislators due to term limits; the drawing of legislative districts that have intensified partisan differences; intensified lobbying by various interest groups; the possibility of challenges to the state's recent implementation of motor vehicle license fee tax rate increases; and the enormous magnitude of the state's $38.2-billion projected accumulated budget gap, compared to fiscal 2003 total estimated general fund revenues of just $67.8 billion."

Davis, meanwhile, has tried to keep the recall at a distance and spent Monday in Los Angeles, visiting Marvin Elementary School in the Fairfax District to host a discussion about proposed changes to the budget by Republicans.

During a round-table discussion that included Los Angeles Unified School District Supt. Roy Romer and members of the teachers union and the PTA, Davis denounced Republican proposals to delay the start of kindergarten. Romer and others said they were concerned about the emotional impact of the GOP proposals.

"It is unconscionable for anyone to balance the budget on the backs of children," said Marguerite LaMonte, a school board member.

Times staff writers Peter Nicholas in Sacramento and Kathleen Flynn in Los Angeles contributed to this report.

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