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Did Davis hide extent of fiscal crisis in 2002? Now, those words are being thrown in Davis' face. In the campaign to oust Davis from office, a leading supporter of the recall contends that Davis engaged in a massive deception during the gubernatorial race, by deliberately misleading the public about the magnitude of California's fiscal crisis during a difficult election. According to the many autopsies performed on last year's budget, Davis and the Legislature didn't fully realize the true extent of the fiscal crisis and ignored key information about an economic slump. Davis became far more pessimistic about the California after the election -- proof, his critics say, that he knew all along the state was headed for a meltdown but didn't admit it. Supporters of the Democratic governor say the contention that Davis misled the public about the 2002-03 budget is false, a manufactured debate without any evidence. Nobody, they point out, predicted the $38 billion deficit California now faces. "It's an argument of convenience to the folks trying to sell the recall," said Steve Smith, director of Taxpayers Against the Governor's Recall. "It's not true. The governor did not deceive the voters during the election. There is a public record on this that is pretty clear." The budget Davis signed on Sept. 5, 2002, was dubbed a "get-out-alive deal" by Senate leader John Burton of San Francisco, an acknowledgment that the governor and the Legislature, Republicans and Democrats, faced tough elections that year and wanted to go home. Within a few months of taunting Simon at the October 2002 debate, Davis would be re-elected by a narrow margin -- and the respected state legislative analyst would reveal another huge deficit, pegged at $21.1 billion. Davis would soon offer a package of midyear budget cuts to finish the work from before the election. During the 2002 budget debate, there was conflicting evidence about the state of jobs and economic growth, and Davis took a relatively optimistic view about how much tax revenue was expected in 2002-03. His administration predicted a 5.6 percent jump in personal income and that the California economy would accelerate in the second half of the year and into 2003. The administration says it used the best available information, including a forecast from Federal Reserve Chairman Alan Greenspan that the economy would rebound in late 2002. Susan Kennedy, the governor's former Cabinet secretary and key budget negotiator last year, said the economic reports were "all over the map, and we were right in the middle. We did the best we could possibly do." But there were critical signs that the Legislature and Davis administration could have noticed. UCLA's respected Anderson Forecast predicted in June, two months before the budget was approved, that a period of painfully slow growth was expected in California, calling the budget crisis a blot on the economic landscape. But the most troubling sign was the continued steep decline in the stock market -- the Dow Jones Industrial Average dropped 15 percent during summer budget negotiations -- and dramatically reduced tax revenues. This was not factored into the equation. By January, Davis announced that $17.7 billion less was available over three years because of the tax slump.
"There is always new information coming in," said Ted Gibson, the former chief economist of the state. "But unfortunately the process
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