Governor Puts Agenda on the Ballot

His ultimatums rebuffed by lawmakers, Gov. Arnold Schwarzenegger on Monday ordered a Nov. 8 special election that could trim the power of California’s Legislature and dampen the influence of the public employee unions that help finance its Democratic majority.

Along with Schwarzenegger’s agenda, the ballot is expected to include initiatives that, if approved, would change the way minors obtain abortions, electricity is sold and prescription drug prices are set.

But at its heart are three measures that Schwarzenegger hopes will alter -- in his favor -- the way Sacramento operates. The centerpiece initiative would give him much more power to cut state expenditures, a change he said was essential for California’s fiscal health.

“Without reform, we are destined to relive the past all over again: $22-billion deficits, higher car taxes and the threat of bankruptcy,” Schwarzenegger said in a 3 1/2 -minute address broadcast from his Capitol office. The speech was bypassed by many television stations consumed by the Michael Jackson acquittal.

Coming a year before he is up for reelection, the speech was a blunt acknowledgment of how much Schwarzenegger’s relationships with state lawmakers and many groups have eroded in the 1 1/2 years since he took office.

Other initiatives he endorses would delay teachers from gaining tenure -- a slap at one of Sacramento’s most powerful interests -- and stop legislators from designing districts that ease their reelections.

Schwarzenegger had demanded in January that the Legislature act on his proposals, but Democrats dismissed them as partisan power grabs that would not improve the lives of Californians.

“I still hope the Legislature will join me, and we can go to the ballot together with a bipartisan plan,” Schwarzenegger said in his speech. “But one way or another, with the people’s help, there will be action this year.”

The election promises to be an expensive bare-knuckles fight between the two most powerful lobbies in Sacramento: the business interests and Republican activists that have been filling Schwarzenegger’s campaign coffers all year, and the unions that are at risk of losing much of their political clout if the governor succeeds.

In anticipation, the California Teachers Assn. raised dues over the weekend to collect $50 million more from members. The state prison guards union has moved to raise its dues as well, hoping to gather $18 million extra. Schwarzenegger and his allies are preparing to spend more than $40 million.

The unions’ opposition has been multiplied by an initiative that could crimp their ability to use members’ dues for political purposes. The effort to defeat it is expected to draw union support from across the country.

Democratic leaders Monday denounced the election.

“This governor has invested everything in an election about nothing,” said Assembly Speaker Fabian Nunez (D-Los Angeles). “The governor got elected by espousing a populist agenda. There is nothing here that reforms any aspect of California, that improves quality of life in this state for anybody.”

Schwarzenegger characterized the election as a “fantastic bargain” for taxpayers. “For a buck and a quarter per citizen,” the governor said, “you can fix a broken system and save the state billions of dollars.”

The California secretary of state’s office projects that the election will cost taxpayers $45 million, plus $7 million to $10 million for voter pamphlets.

Democrats and others called the election needlessly costly and said Schwarzenegger could easily have waited until the next scheduled election, the June 2006 primary, to put his ideas on the ballot.

Though the governor cannot call off the special election, he and lawmakers have until the end of August to place any compromises they negotiate on the November ballot and urge voters to choose them over the initiatives. That is what they did last year when they hammered out a deal on aid to local government.

But Schwarzenegger’s proposals this year ask far more of Democratic legislators and their allies. His proposed budget overhaul -- which Schwarzenegger made clear was his top priority -- would limit the amount by which lawmakers could increase state spending each year and give the governor new authority to slash outlays during the fiscal year if expected revenues didn’t materialize.

“It would be a dramatic shift of power from the legislative branch to the governor,” said Jean Ross, director of the California Budget Project, a Sacramento nonprofit organization.

Another Schwarzenegger-backed proposal would give a panel of retired judges the responsibility to determine boundaries of districts for the Legislature and California’s congressional delegation. Schwarzenegger tried unsuccessfully in the last election to unseat several Democratic incumbents.

Dan Schnur, a veteran Republican consultant, said a ballot fight was inevitable because “there’s no way the Legislature would ever pass any of these things.”

He said Schwarzenegger’s aggressive approach was to be expected after his experiences trying to find common ground with a polarized Legislature.

“This happens to every governor: They come to Sacramento pledging to put aside partisan differences and work together. They try it for a year; it doesn’t work,” he said. “They come back the second year ready to move much more aggressively. Gray Davis went through this; so did Pete Wilson.”

Other proposals are expected to draw money, passion and attention from around the country. They include not only the union-dues measure but also two initiatives concerning prescription drugs; a measure that would alter the state’s energy regulation rules; and another that would require the parents of minors to be notified before their children obtained abortions.

With the exception of the abortion measure, petition signatures for the initiatives were rushed in anticipation of the election and in the hope that lawmakers, feeling pressured, would negotiate with Schwarzenegger.

“The warring parties have really made us a sideshow in Sacramento,” said state Senate President Pro Tem Don Perata, an Oakland Democrat. “They have diminished the Legislature.”

A Public Policy Institute of California poll released last month found that only a third of the electorate thought a special election was necessary this year. Indeed, the shape of the election is quite different from what Schwarzenegger envisioned in his State of the State speech in January.

Then, he highlighted the increased costs to taxpayers of California’s public pension system, and asked lawmakers to replace it with 401(k)-style accounts. He also proposed improving public schools by using merit instead of seniority to pay and promote teachers.

But only two of his four proposals survived in some form for the November ballot. Schwarzenegger was forced to abandon the pension proposal this spring, after analysts said it would have abolished death benefits for survivors of police officers and firefighters killed on the job. He has said he will press for a revised pension plan next year.

The governor’s supporters also were unable to collect enough signatures for his merit pay measure, so they went with the tenure proposal.

Schwarzenegger’s stature has had a rocky six months as well. His public approval rating has dropped from 60% at the start of the year to 40%, according to the Public Policy Institute’s most recent poll. Polls have also shown little public enthusiasm for his proposals.

Democratic state Treasurer Phil Angelides, who wants to run against Schwarzenegger next year if the governor seeks reelection, accused him of “misleading the people of California into this special election.” He predicted that “before this is over, this special election will be Arnold Schwarzenegger’s Iraq.”

The governor’s allies are confident that his salesmanship will rally the public with the same success that he showed last year in campaigning for ballot initiatives.

“You look at the [Public Policy Institute] poll and you realize the public could benefit from a five-month discussion about how the budget functions in California,” said Alan Zaremberg, president of the California Chamber of Commerce, which helped place Schwarzenegger’s initiatives on the ballot.

“It appears the public doesn’t have a full grasp about how their tax dollars are being spent and what the consequences are,” he said.

The array of groups rallying to oppose Schwarzenegger’s agenda is broad. They include teachers, school groups, nurses, local governments and some public safety organizations that helped pick apart his pension proposal.

They are already denouncing his budget measure, saying it could lead to substantial reductions in spending on schools, healthcare, and police and fire departments.

“I think he’s overplayed his hand pretty significantly,” said Rose Ann DeMoro, executive director of the California Nurses Assn.

Though the election is five months away and the state budget for the fiscal year beginning July 1 is not yet done, a campaign-like atmosphere has descended on the Capitol

In anticipation of the governor’s announcement, supporters and foes rallied throughout the day. A shouting match ensued on the north steps of the Capitol between a band of fewer than 30 Schwarzenegger backers and more than 100 public union supporters, the remnant of a much larger crowd of union members who had gathered earlier in the day.

“We didn’t want to get into a bloody battle today,” said Janis Mickel-Szichak, a coordinator with Service Employees International Union Local 1000. “It’s going to get worse over the summer.”

Times staff writers Evan Halper, Robert Salladay and Nancy Vogel contributed to this report.

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(BEGIN TEXT OF INFOBOX)

Focal points

Gov. Arnold Schwarzenegger has endorsed three of the eight initiatives expected to appear on the ballot. The measures would:

Impose spending restraints on the state budget.

* Transfer the authority to draw California’s voting districts from the Legislature to a panel of judges.

* Increase the time required for public school teachers to obtain tenure.

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Likely initiatives on the ballot

Gov. Arnold Schwarzenegger on Monday called a Nov. 8 special election that is expected to include eight statewide initiatives. Five have already qualified for the ballot.

Schwarzenegger has embraced three:

Spending cap

Would limit amount that government spending could increase each year. Would force automatic cuts if the state budget was not in place by the July 1 deadline. Would give the governor the power to cut programs midyear if the budget fell out of balance. Would remove some school spending obligations from state law. Supported by Schwarzenegger, California Chamber of Commerce, California Business Roundtable. Opposed by California Teachers Assn., California Labor Federation, California Nurses Assn.

Teacher tenure

Would increase to five years from the current two the period of service required before public school teachers could receive tenure. Would allow teachers to be fired after two consecutive unsatisfactory performance evaluations. Supported by Schwarzenegger. Opposed by California Teachers Assn., other unions.

Redistricting

Would require a panel of retired judges to draw election districts for state legislative, Board of Equalization and congressional offices. Takes away power of state legislators to draw their own districts. Voters would approve or disapprove the judges’ redistricting plan. Supported by Schwarzenegger. Opposed by various GOP and Democratic lawmakers.

Two additional measures have qualified:

Union dues

Each member of a California public employee union would have to consent every year for any portion of his or her dues to be used for political campaigns. Supported by anti-tax advocate Lewis Uhler. Opposed by numerous public employee unions.

Abortion

Would ban abortions for minors (younger than 18) until 48 hours after a parent or guardian was informed that the abortion was going to be performed, except in a medical emergency or with a waiver from the parent or guardian. Would require doctors to keep statistics on abortions provided to minors. Supported by James Holman, publisher of the San Diego Reader. Opposed by Planned Parenthood of California, Feminist Majority Foundation.

Three more initiatives are expected to qualify for the ballot

by the June 30 deadline:

Prescription drugs 1

Would allow Californians with low and medium-level incomes (up to $38,280 for individuals) to receive discounted drug prices negotiated with pharmaceutical companies by the state Department of Health Services. Prescriptions for drugs made by companies that declined to negotiate discounts would be discouraged in the state’s Medi-Cal program. Supported by Health Access California. Opposed by drug companies.

Prescription drugs 2

Would allow Californians with low and medium-level incomes (up to $28,710 for individuals) to receive voluntary discounts negotiated with pharmacies and drug companies by the Department of Health Services. No penalties for companies that did not reduce prices. Supported by pharmaceutical industry. Opposed by Health Access California.

Electricity service regulation

Would partly move away from deregulation by restricting electricity customers’ ability to switch from private utilities to other providers. Would also require all electricity sellers, not just private utilities, to purchase 20% of their energy from renewable sources by 2010. Would raise fees to expand regulatory oversight by the Public Utilities Commission. Proponents are Robert Finkelstein and Michael Peter Florio.

Sources: California secretary of state, Times reporting

Los Angeles Times