Governor’s Words on Taxes Irk Some Allies

Gov. Arnold Schwarzenegger’s statement that his refusal to raise taxes could end up being “wishful thinking” irked some key California conservatives on Wednesday. If Schwarzenegger agrees to higher taxes in the coming months, “his conservative support would crumble,” said Jon Coupal, president of the Howard Jarvis Taxpayers Assn.

“I think he realizes the consequences of imposing taxes,” Coupal said. “Not only economically, but politically it would be devastating to his administration.”

Schwarzenegger vowed during his gubernatorial campaign that he would not raise taxes unless the state was hit by a natural disaster.

In talks with the Legislature on closing the state’s $14-billion budget shortfall, he had stuck to that position. But in an interview Tuesday with The Times, he said, “I’m going through wishful thinking that I’ll never have to go there. Because I just don’t like it. I try to work around and find ways so we don’t have to do that. So that’s the stage I’m in right now. Maybe someone else will say it’s denial, but I’m at that stage where I say you can’t do that.”

Schwarzenegger has proposed spending cuts, borrowing money and accounting maneuvers to close the budget gap. Democrats who control the Legislature are pushing to add higher taxes to the mix.

Mike Spence, president of the California Republican Assembly, one of the state’s biggest conservative groups, said Schwarzenegger risks trouble on the right if he seeks reelection in 2006 after having raised taxes.

The governor would probably face a conservative challenger in the GOP primary, Spence said. Californians “who thought he was a man of his word,” he said, could wind up “sitting on their hands” instead of backing his reelection.

“His popularity would plummet, because obviously you couldn’t trust his word on any issue if he’s willing to break this pledge,” Spence said.

Rob Stutzman, Schwarzenegger’s communications director, said the conservatives who were raising concerns about the governor’s stand on taxes “need to chill out.”

“The governor’s comment was that many people tell him that he’s using wishful thinking, but he went on to say how committed he is to not raising taxes to eliminate this deficit that he inherited,” Stutzman said.

Conservative voters are among Schwarzenegger’s most loyal supporters: 71% of them backed him in the October recall election, a Times exit poll found.

But his remarks on taxes this week fueled unrest among conservatives who were peeved by his earlier comments on gay marriage and driver’s licenses for illegal immigrants. Schwarzenegger had said that it would be fine with him if state law were changed to allow gay couples to wed.

He also said he might sign a revised law to give driver’s licenses to illegal immigrants if it were to meet his public-safety concerns.

Despite rumblings of discontent, many conservatives remain for the most part staunch supporters of Schwarzenegger.

Stephen R. Frank, a Simi Valley conservative activist, said that if Schwarzenegger raised taxes, conservatives and other voters would blame Democrats in the Legislature.

“Their No. 1 anger would be toward the Legislature for not controlling spending,” he said. “They’ve seen the governor do his best to control spending.”

Tony Quinn, co-editor of the California Target Book, a nonpartisan analysis of California campaigns, said conservatives were unlikely to abandon Schwarzenegger -- even if he were to raise taxes.

Like Gov. Ronald Reagan, a Republican who increased taxes shortly after taking office, Schwarzenegger could blame the move on a fiscal mess that he inherited from a Democratic predecessor, Quinn said.

In interviews Tuesday with newspaper reporters, Schwarzenegger vowed to fight at least three proposed initiatives for the November election that would raise taxes for specific programs.

“I think this is the wrong time to even go after any tax money, or to increase taxes and then to earmark it for a specific thing,” he told the San Francisco Chronicle.

Times staff writer Evan Halper contributed to this report.