2 Sides Differ on Size of Government

The issue that caused budget negotiations between Gov. Arnold Schwarzenegger and Democratic leaders to break down last week was not the $15-billion bond issue he had proposed -- agreement on that proved relatively easy -- but his plan for a constitutional amendment to cap state spending.

Negotiators on the spending cap spent the week talking of arcana such as “maintenance factors” and “backfills.” In the end, however, the two sides differed over a basic question of philosophy: Is government too big?

The contrast between the two sides’ expectations of the role government should play in people’s lives proved stark, as the numbers show. Both sides proposed a spending limit that would begin with a baseline number for next year.

The Republicans would have set that baseline at $72 billion. That would require reducing the current level of state programs by $14 billion, or about 16%. If aid to education were exempt from cuts, as Schwarzenegger has insisted, the rest of government would have to be cut by more than one-fifth. The size of government would then be fixed at that level, except for adjustment for inflation and growth in the state’s population.

Democrats wanted to set the base spending level at $83 billion -- enough to accommodate most current spending. They also would have provided more leeway for government spending to grow in the future.

The two sides could not bridge the $11-billion difference. “The governor was willing to come some distance, but with $83 billion you only institutionalize the overspending,” said Rob Stutzman, the governor’s communications director.

But although Schwarzenegger has backed the firm cap -- and now will seek to put it on the ballot next November -- he has offered no specifics on significant cuts he favors -- only those he opposes.

He has said, for example, that he would never embrace a proposal made by Assembly Republicans during the summer that would have cut state money that pays for food for seeing-eye dogs.

“Ridiculous,” he said.

Having founded an organization that provides after-school programs for children in 15 cities, Schwarzenegger said that he loathes taking “money away from people.”

“I hate making cuts. Because it hurts me,” he said.

At this early stage, Schwarzenegger has delegated the unpopular job of detailing cuts to Finance Director Donna Arduin, who offered a window into her thinking during a legislative hearing Nov. 25.

Health and human services programs are not restrictive enough in whom they serve, she said. Taxpayers may be subsidizing state university tuitions too heavily, particularly at the graduate and professional school level, Arduin suggested.

Local schools have been over-funded, she said, while school districts have not been held accountable for improving student achievement.

Democratic legislative leaders know the idea of a spending cap is popular. But they believe cuts such as the ones Arduin discussed would not be.

They say the governor should be required to make the effect on programs clear to the public before expecting legislators to approve a cap.

“Put forward the budget, and let’s begin that crucial debate over what we want, what we value, and how we pay for it,” said Assemblyman Darrell Steinberg (D-Sacramento).

“What we were not willing to do was to pre-determine the budget debate for the next several years before the governor even presents his first budget.”

Times staff writers Joe Mathews and Nancy Vogel contributed to this report.