After promising a new day of fiscal responsibility in Sacramento, Gov. Arnold Schwarzenegger acknowledged when he introduced his budget proposal that “certain things will always happen as in the past.”
His $99-billion budget carries lots of familiar refrains. Like former Gov. Pete Wilson’s, it proposes to snatch away $1.3 billion from city and county property tax funds, despite earlier promises to keep the localities fiscally whole. It is similar to former Gov. Gray Davis’ proposal of last January in cutting some from here and some from there, curbing health and welfare programs and raising college and university fees.
Since the debt is larger now, of course, some of the numbers are bigger, with cuts amounting, by most estimates, to just under $5 billion. Like almost every deficit-burdened budget of the past, Schwarzenegger’s relies on smoke and mirrors -- including transferring gas-tax money to the general fund -- and even more borrowing. It doesn’t have any new taxes yet, but it’s far from the final budget.
Democrats unsurprisingly decried the social welfare cuts and tuition increases. The conservative California Taxpayers Assn. hyperbolically claimed “an end to the state’s fiscal nightmare.” However, that nightmare won’t really end until fundamental reforms can stabilize fluctuating revenue and spending patterns, and give localities more power to keep locally generated taxes at home.
Los Angeles Mayor James K. Hahn, who only weeks ago was praising Schwarzenegger, angrily predicted the take-backs would cost the city $45 million, which “you can’t make up ... by counting paper clips.”
Friday was only the opening gambit in what will be a long tussle between Schwarzenegger and lawmakers. It was important that the governor set a firmly bipartisan tone in his opening remarks, complimenting Democrats on their earlier bipartisan agreement on a $15-billion debt-financing bond. Legislators, even if they plan to struggle mightily for changes before the July 1 budget deadline, should not say something regrettable before the bargaining even starts.
Is there room for compromise? Obviously, Schwarzenegger said. He declared his own opposition to new taxes, but did not rule out bargaining about them. “We will negotiate, look at what their needs are, what our needs are,” he said of Democratic legislators.
The budget bears the strong stamp of finance director Donna Arduin, introduced by Schwarzenegger as “my genius.” It is similar to budgets she fashioned in Florida for Gov. Jeb Bush, cutting higher education and health services for the poor, protecting tax cuts and promising privatization of some services. Schwarzenegger joked about how many cigars might have to be smoked collegially on his office patio before a final budget emerges. Here’s hoping he can keep his sense of humor and inject some into the Legislature. The state’s fiscal situation is terrible, but press-release headlines like “Children’s Lives on the Line,” from an advocacy group protesting curbs on the Healthy Families program won’t help.
Schwarzenegger has set out on a course that everyone in Sacramento recognizes. The state’s political revolution will not be in the budget’s final numbers, but in whether the governor can corral Democrats and Republicans into agreement.