Breaking The Siege

"There is a point at which you just have to give the terrorist what he asks for because the hostages are tired," sighed Democratic assemblywoman Delaine Eastin. And so California's Democrat-controlled legislature wearily acceded to most of Republican Governor Pete Wilson's hard-nosed school-spending cuts and at last produced a balanced $57.4 billion state budget. Wilson's signature at 1:45 a.m. Wednesday, Sept. 2, half an hour after the approving vote, concluded a fiscal tug-of-war that had locked the state in financial limbo for 63 days. Out of cash since July 1, Sacramento issued 1.5 million IOUS worth a total of $3.4 billion -- at least when state employees or dependent-care workers could find a bank willing to cash them. Among those cut off altogether: thousands of suppliers and contractors, state medical-insurance (Medi-Cal) recipients and California State University students on financial aid.

After all that duress, Californians might have expected a polished gem of a budget. What they got instead was a very rough stone that cuts local governments by $1.3 billion, welfare payments by an average of 6% and, most brutally of all, education funding by nearly $2 billion, or 2.2%. Even though Wilson agreed to an intricate 11th-hour compromise that spread some school cuts over two years -- despite the objection of major education groups -- the Governor was judged to have won most everything else in his battle for an all- cuts, no-new-taxes budget in line with what he called "our hardest times since the Great Depression." With two years to go before his own re-election challenge, he outtoughed legislators who ultimately cringed at possible voter reaction against them this November. "For the first time in my 10 years here, I was embarrassed to be a member of the legislature," admitted Republican senator Frank Hill. Lamented a forlorn Democratic assemblyman: "We might as well have painted targets on our foreheads."