As constituents start to feel the pain of state cuts to city and county budgets, voters may look to the incoming governor for more municipally-friendly policy.

“The nexus between state and local government will play a significant role in the governor’s race,” predicted Mark Baldassare, president and CEO of the Public Policy Institute of California, a nonpartisan research center that conducts extensive voter polling.

At a Sacramento Press Club meeting, Baldassare also suggested voters might be open to taking another look at changes to Proposition 13 tax restrictions, including the creation of a split role tax to update commercial valuations more frequently than residential property tax bills. Baldassare even saw the 2/3 vote requirement for passing new local taxes as vulnerable in some polling.

Gubernatorial candidates seem to be listening.

Republican candidate Tom Campbell, a former U.S. congressman, state senator, director of finance and, most recently, dean of the Haas School of Business at UC Berkeley, has outlined his tax reform positions and budget plan to save $24 billion on his Web site.

His philosophy on borrowing from counties?

“I would not take money from the cities and counties, even on a ‘loan’ basis permitted by Prop. 1,” he said in a follow-up phone call.  “The cities and counties have responsibly managed their finances, they should not be penalized by a state that hasn’t.

“Further, the services that they provide are closest to the people of our state; rather than cut police and fire, cities and counties would undoubtedly seek to increase fees or impose taxes.” He added, “It is hypocritical for the state to say it is avoiding a tax increase when it is, effectively, requiring cities and counties to impose one.”

Insurance Commissioner, former businessman and Republican candidate Steve Poizner, who also visited the Press Club, said borrowing from local government only “procrastinates the inevitable.”

Poizner suggested creating SWAT teams to analyze delivery of services and eliminate health and welfare programs that don’t impact people.

Another Republican candidate, Meg Whitman, former CEO of eBay, is also not a fan of borrowing from cities and counties, but acknowledges the possibility was an option written into Proposition 1.

Modifying property tax laws, however, is not an option in Whitman’s book.

“Meg Whitman has pledged not to touch Proposition 13. The state does not have a revenue problem; it has a spending problem,” said Mitch Zak of Randall Communications, Whitman’s campaign spokesman.

Zak credited local government with doing a better job of cutting than the state. “It is ironic that the city of Rocklin is laying off more people than the state of California,” Zak said.

San Francisco Mayor and Democratic candidate Gavin Newsom is very familiar with the challenges of balancing a $6 billion city budget. He credits the creation of a Rainy Day reserve as essential in weathering the roller coaster progressive tax-funding stream.

Newsom has made eliminating the “antiquated 2/3 majority vote requirement” at the state level one of his budget reform goals.

Newsom has endorsed the idea of a Constitutional Convention to reform the ballot initiative process that birthed Proposition 13.

“All options must be on the table,” Newsome said.

Democratic Attorney General Jerry Brown, who served two stints as governor and two more as mayor of Oakland, did not return repeated phone calls and has responded to other media requests that he is not a declared candidate yet although a Jerry Brown 2010 Web site has been launched.

JT Long can be reached at