CA: Details torpedo Schwarzenegger's budget gimmick on civil lawsuits

Sac Bee ^ | 9/8/04 | Dan Walters

[NormsRevenge]

A few years ago, as the state's now-chronic fiscal crisis was deepening, then-Gov. Gray Davis and the Legislature were facing a seemingly intransigent gap between income and outgo, along with mounting public and political pressure to close out that year's budget.

The Capitol's politicians devised the ultimate "solution" to bring the budget into theoretical balance: add another billion dollars in federal aid to the revenue side of the ledger.

The phantom billion - which, of course, never did appear - was one of the many tricks that Davis and lawmakers used to enact state budgets that accumulated tens of billions of dollars in deficits, which eventually doomed Davis' governorship.

As Arnold Schwarzenegger sought the governorship during last year's recall election, he made much of Davis' poor performance on the budget and promised to refloat the state's fiscal ship without new taxes or deep cuts in vital programs, a pledge that didn't add up to jaundiced observers of the Capitol's perennial budget wars.

The budget that Schwarzenegger and the Legislature enacted a few weeks ago is marginally less dishonest than the Davis-era spending plans, but is still much too reliant on borrowing and contains, unfortunately, its own gimmicks - the most blatant being an assumption that the state will realize $450 million in the 2004-05 fiscal year from seizing three-quarters of punitive damages that juries impose in civil lawsuits.

When pressed by journalists about how the revenue amount was calculated, administration officials repeatedly said it was based on research by J. Clark Kelso, who runs the Capital Center for Government Law and Policy at McGeorge School of Law in Sacramento and is frequently pressed into state service as a crisis manager.

[NJ_gent]

"seizing three-quarters of punitive damages that juries impose in civil lawsuits."

You know, I'm certainly not one who likes to see someone awarded $30 million because they spilled coffee on themselves, but state seizure of damages awarded a defendant by a jury takes socialism to a new level. This is disgusting.

[calcowgirl]

>>marginally less dishonest than the Davis-era spending plans

That's arguable. I see more smoke and mirrors.

[Ironclad]

I settled a major lawsuit in CA last year, and my lawyers did a thorough analysis of settlements and verdicts actually completed to see what place we were in. Punitive damages were an insignificant part of the top 50 settlements and verdicts. They may be awarded, but are very rarely paid. The revenue from two-thirds of the punitive damages in this state might cover the governor's household budget and security detail, but that would be about all.

[William Tell]

From the article: "Even Gray Davis wouldn't buy a turkey this lame."

I see no proof of this.