Governor to Mold Bond Campaign Around Fear

To overcome weak public support for his $15-billion bond measure on the March ballot, Gov. Arnold Schwarzenegger is planning a bipartisan campaign to unify Californians of all backgrounds and ideologies around one emotion: fear.

Schwarzenegger and a coalition of Democrats and Republicans will spend the six weeks between now and the March 2 election warning that passage of his bond measure is all that stands between the state and economic disaster.

On the stump, Schwarzenegger will use less-than-apocalyptic language, arguing that the bond measure will “help the state turn the corner” and “put California back on the right track.” But he will suggest that major tax increases and deep, painful spending cuts could ensue without Proposition 57, a one-time borrowing to cover the state’s structural deficit, and a companion measure, Proposition 58, a constitutional amendment requiring a balanced budget.

Such a campaign represents uncharted territory for a governor whose political trademark is optimism and hope. Though Proposition 58 is popular, two independent polls this week show Proposition 57 trailing, with less than 40% of those surveyed willing to adopt it.

“So much of his approval rating is based on his ability to communicate a sense of hope and optimism about California’s future,” said Mark Baldassare, director of research for the Public Policy Institute of California, whose poll Wednesday showed Proposition 57 winning the support of just 35% of those surveyed, with 44% opposing it. “It is tough to explain to people how this borrowing is going to lead to a better tomorrow.”

In fact, the campaign, whose name, “Californians for a Balanced Budget -- Yes on Propositions 57 and 58” was announced Thursday, would challenge the most experienced of governors, not to mention someone who has been a politician for less than six months.

Language in each measure requires voters to approve both Propositions 57 and 58; if either loses, both lose. And though Schwarzenegger has succeeded as a movie star and politician by selling relatively simple premises that excite the public, Propositions 57 and 58 are complicated, multi-part proposals.

Those measures are just part of a ballot that even Schwarzenegger’s supporters concede could cause confusion. Democrats also will choose a presidential nominee. And all voters will be asked to consider a $12-billion education bond and a constitutional amendment that would cut the number of Legislative votes needed to pass a budget.

“We have a campaign on our hands. We’re going to have to spend a lot of time and a lot of money on educating voters,” said Todd Harris, Proposition 57 and 58 communications director. Schwarzenegger is likely to run a campaign that tries to recapture some of the spirit of the recall election, when he appeared on a wide variety of media, from network news shows to entertainment and talk formats.

Schwarzenegger’s now familiar team of strategists -- Mike Murphy, Don Sipple and George Gorton -- will lead the effort. Rick Claussen, whose firm handles ballot measure campaigns, will handle the day-to-day management of the campaign.

The proposition campaign will have a strong Democratic cast. Democratic Controller Steve Westly is co-chairing the effort with Schwarzenegger. And Democratic political consultant Darry Sragow was named Thursday to the campaign leadership.

“At some point, it becomes a simple matter of mathematics,” Sragow said. “If we don’t pass a bond as part of a package of measures, the state will absolutely go off a cliff.”

Such talk echoes financial analysts who say that the consequences of not passing the bond could include the state not having enough cash on hand in June to run some basic government services.

“What are the consequences of the bond not passing? In a word, extreme,” said Donald H. Straszheim, former chief economist for Merrill Lynch.

But pollsters warn that voters have grown skeptical of gloomy, despairing scenarios. They have heard all the warnings on the budget over the last few years -- that the state was about to run out of money, forcing the government to shut down. But none of those things have happened.

“Instead of ‘doom awaits’, it will need to be ‘join me in this so this doesn’t happen,’ ” said Republican consultant Dan Schnur, who is not affiliated with the campaign.

Identifying a clear message could be made more difficult by the campaign’s bipartisan nature. To move Democrats, bond supporters will discuss the possibility of spending cuts if the measure fails; for Republicans, the specter of tax increases will be invoked.

Some Democrats and Republicans see potential opportunities if the measures fail.

Conservative Republicans like Sen. Tom McClintock (R-Thousand Oaks) hope that the failure of the bond would immediately force the kind of drastic shrinking of government programs that they have long advocated.

Among Democrats, California Treasurer Phil Angelides, who is expected to run for governor in 2006, is weighing whether to actively campaign against the proposal, which he calls irresponsible. Some Democrats may prefer that the bond fails so that tax increases to prevent social-program cuts will follow.

Schwarzenegger’s 2004-05 budget proposal also could hurt efforts to draw Democratic support for measures associated with the governor. A Field Poll released Thursday suggested that the governor’s popularity dropped after he submitted his budget last week. In a letter to the governor Thursday, U.S. Sen. Dianne Feinstein (D-Calif.) warned that his proposed health-care cuts would “be devastating” to the state’s poor and result in the loss of significant federal aid.

At the same time that Schwarzenegger campaigns for Propositions 57 and 58, he is likely to be battling Democrats on another front: Proposition 56.

“The Budget Accountability Act,” which the governor opposes, would make it easier for lawmakers to raise taxes. If Proposition 56 passes, the Legislature could pass a tax hike with a 55% vote, as opposed to the two-thirds now required. That would strengthen Democrats, who hold majorities of less than two-thirds in both the Assembly and Senate.

So the governor needs to persuade voters, including Democrats, to say “yes” on two ballot measures labeled “budget” -- but “no” on a third, which Democrats are expected to back.

“The more complicated the ballot measures are, the less the public understands them,” said John Allswang, the author of “The Initiative and Referendum in California: 1898-1998.” “In those situations, there has been a tendency for people to vote no across the board.”

After a speech to the California Chamber of Commerce on Thursday, Schwarzenegger’s finance director, Donna Arduin, told reporters that the state would have to borrow billions of dollars whether the bond is approved or not -- there simply wouldn’t be enough time to make the needed cuts or tax hikes to pay California’s creditors by the start of the next fiscal year on July 1.

Chamber President Allan Zaremberg suggested that the message the governor would have to convey would be one of common sense.

“I don’t think it is a message of fear,” he said. “I think it is a message of understanding what it is about. I don’t think it is a difficult message when people understand you don’t have the cash, you are close to bankruptcy, you need more time to spread the repayment of debt over a longer period of time.”