Seven big-city California mayors are scheduled to meet with Gov. Arnold Schwarzenegger today to urge him to replace revenue lost when he rolled back the car tax increase -- at a time when the governor is softening the anti-tax message he delivered during the campaign.
The mayors said they will make the case that Schwarzenegger needs to plug the approximately $4-billion gap created by the repeal of a vehicle license fee increase so they can provide essential police, fire and emergency services backed by the car tax. Schwarzenegger has already pledged to do just that. But with the state facing a shortfall exceeding $17 billion and the governor under enormous pressure from fellow Republicans to narrow the gap through budget cuts, the visit suggests that the mayors are using their collective political leverage to ensure that cities are spared.
Those expected to attend are mayors James K. Hahn of Los Angeles, Dick Murphy of San Diego, Heather Fargo of Sacramento, Beverly O'Neill of Long Beach, Ron Gonzales of San Jose, Miguel Pulido of Santa Ana and Curt Pringle of Anaheim. Oakland Mayor Jerry Brown has a scheduling conflict but said he would attend in spirit.
Schwarzenegger's press office confirmed the meeting but would not provide details.
"I have heard very clearly that the governor supports providing backfill for local governments," Pringle said. "I want to make sure we show our appreciation for that."
Julie Wong, a spokeswoman for Hahn, said, "The mayor's been very appreciative of the statements that Gov. Schwarzenegger has made about wanting to support local governments, so he takes him at his word." Hahn hopes "to underscore how important this is to cities like Los Angeles."
The car tax debate illuminates the unappealing choices that confront Schwarzenegger as he tries to bring the state's budget into balance. He fulfilled a major campaign promise on his first day in office by abolishing the threefold car tax hike adopted in the waning months of the Davis administration. But in pledging to make up the difference so that cities and counties are not shortchanged, Schwarzenegger also committed himself to deepening the shortfall.
The car tax cut will cause the deficit to grow by $3.6 billion this year if the state did not cut funding of programs to cities and counties that it would have paid for. One option the administration is weighing is closing the hole with $1.9 billion in cuts -- focusing on reductions in welfare, medical and higher education programs -- plus $1.6 billion in new revenue the state is expected to get as a result of the improving economy.
Were Schwarzenegger to follow this course, he would still face a $14-billion imbalance between what the state gets in revenue and what it spends on programs.
To keep the government running without major cuts, the governor wants to put on the March ballot a bond issue of up to $15 billion. He is now casting the bond measure as the more palatable alternative to something he said he doesn't want but may be forced to embrace: new taxes.
The day after his victory in the recall election, Schwarzenegger stated in a news conference that he would not tolerate a tax hike under his watch.
"I campaigned that I would not raise taxes, and I say this again, that I will not raise taxes," Schwarzenegger said.
But in recent days, Schwarzenegger has been laying out scenarios in which a tax hike would be unavoidable, or in which voters might signal a preference for new taxes that he would feel bound to heed.
Schwarzenegger called in to a conservative radio talk show in Sacramento late last week to rally support for the bond measure. The governor is framing the debate over the bond as a choice between borrowing or raising taxes -- a dichotomy that some Republican lawmakers do not accept.
"Well, again, the Republicans have a choice. It is the recovery bond, the fiscal recovery bond, or raising taxes. That's a choice that is up to them, because I am only going to make cuts to a certain point," Schwarzenegger told KFBK-AM (1530).
Should voters reject the bond issue, Schwarzenegger said that would be tantamount to a statement that they would prefer new taxes to borrowing. Casting himself as a populist eager to execute the people's will, he indicated he would yield to such a message.
"We always have to act according to the will of the people," he told talk show host Larry Elder on KABC-AM (790) in Los Angeles on Thursday night. "I think if the people say that they want to raise taxes, then we have to raise taxes." The governor quickly added that, "I'm not a believer in raising taxes."
What Schwarzenegger said on the radio does not seem to have been absorbed by some Republican lawmakers, whose support he needs to get the bond measure to the ballot.
State Sen. Dick Ackerman (R-Irvine) said Monday that he was not aware of the interviews. He said he and some fellow Republicans met privately with Schwarzenegger last week and were reassured that the governor does not support a tax hike.
"Everything I heard, including a meeting we had with him last week, indicated his intention is not to raise taxes," Ackerman said.
Sen. Pete Knight (R-Palmdale) said he had not been aware of Schwarzenegger's statement that he would be open to new taxes if the people want them, though he added that he was not concerned. "You know, he's new up here, for one thing," Knight said. "He's not quite sure of how to go at it yet."
An opponent in the recall campaign, state Sen. Tom McClintock (R-Thousand Oaks), said the governor doesn't need to raise taxes or take on more debt. Spending cuts are sufficient to shore up the state's finances, he said.
"I cannot support the bond issue," he said. "It was a bad idea when Gray Davis proposed borrowing $11 billion to paper over the deficit. It is still a bad idea to borrow $15 billion to paper over that same deficit."
Times staff writer Evan Halper contributed to this report.