And Fodder for All From the Governor

There was ample fodder in Gov. Arnold Schwarzenegger’s State of the State speech for nearly everybody: centrists and conservatives, compromisers and combatants.

Admirers and adversaries.

Anyone who just enjoys being amused -- or hearing half-apologies.

“I am honored to call you my colleagues,” he told the legislators. “Sometimes I call you other things, but that’s in the spirit of political fun.” The term “girlie men” surely came to mind.

He sounded like a passionate California native: “I love riding my motorcycle along the Pacific Coast Highway -- the freedom of the road and the smell of the sea.”

Yes, he’s a charmer.

Schwarzenegger also provided some ammunition for antagonists. And let’s get right to that.

The governor declared that his proposed reforms “will demand political sacrifice from all of us” and lectured: “Political courage is not political suicide.”

But he didn’t offer to sacrifice his political capital by considering a tax increase, either by tapping the super-rich or by closing corporate loopholes.

“A lot of people say, ‘Arnold, why don’t you just raise taxes and be done with it?’ Well, we don’t have a revenue problem. We have a spending problem.”

He admonished: “Do the math. Our revenue increases by more than $5 billion, but our spending increases by over $10 billion.”

Here’s some math that Schwarzenegger never acknowledges: That $5 billion in red ink spending can be largely attributed to his popular cutting of the car tax immediately upon taking office. Why? The levy had provided $4 billion for local governments. When they howled, Schwarzenegger gave them a different $4 billion through a complex shell game.

But enough of this carping for now.

Give Schwarzenegger credit for honesty, even though cynics might call it a preemptive defense.

The governor admitted that the new state budget he’ll propose Monday will “not solve our ongoing structural problem, because our deficit the following year will be even worse.... It is a painful budget forced upon us by a broken system.”

His proposed reform was a surprise because he tacitly rejected the concept of a tight spending cap, based on inflation and population growth, that is being advocated by conservatives. Instead, Schwarzenegger suggested creation of an automatic budget-balancing system when deficits loom. Under his plan, if spending exceeded revenue, there would be cuts across the board -- even to schools.

The proposal was the brainchild of new finance director Tom Campbell, a moderate former lawmaker in Sacramento and Washington. A Schwarzenegger advisor said the governor liked the plan better than a hard spending cap because it provided flexibility, including the ability to raise taxes if necessary.

Schwarzenegger considers it a practical solution to the autopilot spending that has gridlocked Sacramento. Ballot-box budgeting -- most notably for schools -- has hamstrung Capitol politicians.

The governor told lawmakers: “We must take back responsibility for the budget. We must have a new approach that overrides the formulas, overrides the special interests and overrides the forces that have turned some of you from legislators into clerks.”

One more carp: Schwarzenegger was a ballot-box budgeter himself in 2002 when he sponsored an initiative to require financing of after-school programs. The measure hasn’t been implemented, however, because new tax revenue must be generated first.

Whatever, Democrats should take a hard look at Schwarzenegger’s proposed automatic-budget balancer with the idea of dealing. Perhaps legislators could be offered a brief chance to cut spending themselves before the auto-balancer took control. For Democrats, the governor’s centrist plan certainly would be preferable to a conservative spending cap.

Powerful public employee unions -- especially teachers -- are sure to aggressively oppose this proposal. But Schwarzenegger waved two other red capes at the unions that will divide their attention.

One Schwarzenegger proposal would require that salaries for future teachers be based on merit, not length of service. This has no prospect of passing, but it might spark a debate about long-overdue tenure reform and some method of merit pay.

The other red cape has a better chance of surviving, especially in a special election the governor apparently is determined to call. (He’d like to hold the election in July, but there are better odds of a July snowstorm than getting all his proposals ready for voters by then.) The proposal that might appeal to voters is the elimination of traditional pensions for future state and local government workers, including teachers. The pensions would be replaced by 401(k)-type plans, like those offered by many private businesses.

Schwarzenegger called public pensions “another government program out of control,” adding there must be a retirement system “that is fair to employees and to taxpayers.”

Score one for the conservatives.

Democrats and Republicans alike seemed to support the governor’s desire to overhaul the troubled state correctional agency. “I want to put the corrupt people in our prisons on the same side of the bars,” he said.

Throughout, Schwarzenegger sounded like a new governor still grappling with how best to make an impact. What exactly should he do and how should he do it? Answer: Focus more on compromising with legislators and less on orchestrating a costly special election.

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George Skelton writes Monday and Thursday. Reach him at george.skel ton@latimes.com.