Following a meager five-point victory against a bumbling opponent and facing an 18-month budget deficit estimated at $35 billion, Gray Davis will be sworn in this month for his second term as governor. He will govern a state whose voters are perfectly happy with a suburban lifestyle, at least according to the polls. So it would not seem likely that Davis is in a position to do anything innovative or trailblazing in the area of land use planning and growth policy during his second term. Yet there is probably more second-tier scuttlebutt about growth going on in Sacramento these days than at any time in recent history. Sacramento is overwhelmingly Democratic, which increases the chances that growth policy will be substantially altered. And as a lame-duck politician — he's termed-out as governor and has already announced that he will not run for president in 2004 — Davis may well be tempted by that dangerous political phenomenon known as "legacy time." In other words, something might happen on growth policy during the second Davis Administration in spite of the circumstances. Success in other states Davis is neither a visionary nor a policy wonk, and he is one of the most risk-averse politicians in recent American history. These characteristics are almost exactly the opposite of most governors during the last 30 years who have taken on growth as an issue. Maryland's Parris Glendening, for example, was a true policy wonk. A former government professor at the University of Maryland who had won narrowly the first time out, Glendening fully expected his "smart growth" effort the further weaken his chances for re-election. In the end, it did not and he won re-election easily. Furthermore, Davis's administration has never made growth per se a major issue — at least, the governor has never framed the growth issue in a comprehensive and coherent way. His predecessor, Pete Wilson, who was regarded as a growth management guru during his mayoral days in San Diego, tried hard to frame the growth issues coherently and comprehensively, though he proved unable (or unwilling) to do much about it before he left office four years ago. And even Davis's opponent Bill Simon, who ran probably the worst gubernatorial campaign in recent California history, put out a coherent position paper that took on the issues in a sweeping fashion. As the first Democratic governor in 16 years, Davis was able to bring a collection of interesting growth policy thinkers into his administration. Caltrans chief Jeff Morales has reoriented the transportation agency around urban planning. Julie Bornstein, the director of the Department of Housing and Community Development, is a strong advocate who has been innovative. Resources Secretary Mary Nichols is an experienced urban environmentalist who understands growth issues well. Even the Health and Human Services Secretary, Grantland Johnson, is an experienced and knowledgeable growth policymaker because of his long experience as a Sacramento city council member and county supervisor. How many welfare czars know what a lot split is? The fact that all these Davis appointees are interested in growth is one of the reasons that the issue won't go away. Another is the fact that the Democratic legislature won't let go of it either. The Smart Growth Caucus is not overpowering politically, but it has gained enough strength to get some bills to Davis's desk. And a final factor is that the voters — even though they are happy with suburban living, according to the latest Public Policy Institute of California poll — keep approving big bond issues that are sure to shape the state's future growth patterns. The net result of all these forces is that Gray Davis has been handed two potentially strong and powerful tools to shape growth policy in the state no matter how big the state budget deficit is. The first is AB 857, the bill that requires state agencies to integrate their capital spending consistently around a set of "smart growth" principles (see CP&DR, October 2002). The second is the tens of billions of dollars in state bond funds that voters have approved for schools, open space, housing, and other facilities important to future growth. Conceptually, the new law and all the bond money form the outlines of a California version of the Maryland smart growth strategy — a coherent policy of state investments to direct future growth that does not step on local land-use decision-making powers. More practically, they are ultimately about the use of power and money at the state level. For whatever he may lack in vision, wonkiness, and guts, Gray Davis understands how to use power and money in Sacramento to accomplish goals that are important to him. So far, the Davis administration has talked an impressive line about implementing AB 857, which calls for the state to make infrastructure investments based on promoting infill, encouraging compact development, and protecting environmental and agricultural resources. The Governor's Office of Planning and Research (OPR) has been on the conference circuit since fall telling local planners and electeds that the administration is serious about the bill. (AB 857 also dovetails with an ongoing General Plan guidelines revision that OPR is preparing.) At this point, Davis has put OPR in the hands of Tal Finney, a high-energy, high-level political operative who is close to Davis and his inner circle. A home run for bonds? Using the bond funds to effect change in state growth policy will be trickier. The vast majority of the money is earmarked for schools, and as Glendening discovered in Maryland, the school bureaucracy is more resistant to attaching smart growth strings than even the pavement crowd. Some of the other bond money — open space, for example — is already earmarked for specific projects or will go to local governments on a formula basis. Further, the bonds came out of the Legislature with certain rules and expectations that were shaped largely by Senate leader John Burton, who is the most powerful legislator in Sacramento, but not one particularly interested in growth policy. But to an extent, bond funds can be used to leverage a certain growth pattern. Bond money could even reinforce the policy choices created by AB 857. Davis appears perfectly capable of using these levers if he wants to. The question is whether he wants to. During his second term, Davis will almost certainly be obsessed by two things that would seem to be in contradiction to one another: The budget deficit and his legacy. It is difficult to imagine how a strong growth policy fits into either one of these obsessions. There is always the argument that smarter growth policy will reduce infrastructure expense and, therefore, cost the state less money. But recent experience suggests that during bad budget times, California fiscal conservatives would rather not spend infrastructure money at all. Given the fact that he will be out of office by 2007, Davis will almost certainly choose not to build things, rather than decide to build them smarter or most cost-effectively. Put another way, Davis likely will implement short-term solutions rather than address the long-term problem. He would not be the first governor to follow this path. As far as the legacy goes, the recent open space bonds provide the governor with an opportunity. It will be very tempting to build the legacy with a few high-profile open space purchases, such as Ahmanson Ranch adjacent to Los Angeles (see CP&DR Insight, December 2002). It's more difficult for a lame-duck governor whose general fund is evaporating to make strategic open space decisions that protect habitat or farmland and guide growth in a reasoned manner — especially when those decisions fail to generate headlines, and might even anger people. So, can we expect to see a comprehensive growth strategy emerge during the next four years? Maybe. But it is more likely that we will see a lot of muddling through. A few bills here and there will inch things forward, and smart growth moles in the administration will embed smart growth values in a bunch of small programs or bond criteria. Given a governor who received less than half the vote and a $30 billion-plus deficit, maybe that is the best we can expect.