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Did Davis hide extent of fiscal crisis in 2002? Gibson said there was evidence floating around during the summer budget negotiations that a significant deficit remained, even after the $23.6 billion budget gap was closed, but it wasn't being addressed. On the campaign trail and in public, Davis "simply refused to talk about it," he said. Elizabeth Hill produced a report for Senate Republicans in July 2002 showing an unanswered deficit of between $9.6 billion and $12.3 billion every year for the next five years, even if the governor's budget were approved. The information essentially was ignored by budget writers. Since lawmakers took so long to approve the budget last year -- it was 67 days late -- the state had access to fresh information about the economy and state tax revenues, which looked bleaker and bleaker. They knew, for example, that taxes collected between May and July had fallen $700 million short of expectations. But that information was not included in the 2002-03 debate. This is the way most budgets are done -- it's simply too hard to make last- minute changes based on a few months' worth of information, budget writers say. But Davis' critics contend the governor should have looked harder at the numbers during the summer, instead of refusing to budge from what was known in May. "You don't tell the man, as he is considering the budget, 'By the way, revenues are down June, July and August?' " said Jesse Huff, the former finance director for ex-Gov. George Deukmejian and a campaign budget adviser to Simon. "You don't tell him that? I don't believe it." Assembly Democrats did something in the final hours of budget negotiations last year that ended up shifting $1 billion in shortfall to this year instead of it being addressed in 2002. Senate Republican leader Jim Brulte immediately dubbed both proposals fake -- and he was mostly right. The governor had proposed increasing the cigarette tax and vehicle license fees. Assembly Democrats, to get GOP votes, abandoned both proposals and simply ordered Davis to cut an unspecified $750 million out of state operations and save another $285 million by offering state bureaucrats a "golden handshake" to retire. The retirement package went bust, with only 111 state workers taking the buyout and $236,000 in savings, after the cost of implementation. The cuts saved for later. Kennedy said the Davis administration told the Legislature the golden handshake would not work and that it would take time to identify $750 million in operational cuts but accepted it "with a stiff upper lip." Huff said it would be natural for the Legislature to want to jam through a cooked-up, "get-out-of-town" budget, but the governor has a responsibility, through his blue-pencil veto pen, to show leadership and slash government spending even if the Legislature refuses. Kennedy, however, said the final budget "wasn't the governor getting out alive. It was the Legislature getting out alive" by rejecting major tax increases or budget cuts proposed by Davis in January. The allegation that Davis misled the public, which is being made by Republican Rep. Darrell Issa, a candidate on the potential recall ballot, has spurred another debate about the very nature of recalls. The law doesn't require a specific reason to hold a recall election. Article 2 says only that citizens have the right to introduce ballot initiatives and recalls "when the public good may require."
But voters may well ask: Why are we doing this, so soon after electing Davis to a second term?
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