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Tax Opposition May Be ‘Wishful,’ Gov. Says

Times Staff Writers

Gov. Arnold Schwarzenegger, with little cash on hand to close a $14-billion budget shortfall, reiterated Tuesday his opposition to new taxes but said it might be “wishful thinking.”

“I’m going through wishful thinking that I’ll never have to go there,” Schwarzenegger said. “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 argued that new taxes would punish ordinary Californians for the failure of the government to control spending. But he acknowledged extraordinary pressures on him to increase state revenue and declined to rule out any tax increases to balance the books.

The Republican governor’s comments came during an interview with The Times that touched on his own campaign fundraising; the powerful role his wife, Democrat Maria Shriver, and other members of the Kennedy clan play in advising him on state policy; and President Bush’s prospects in California in the upcoming election.

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Schwarzenegger is consumed with negotiations over reforming the workers’ compensation system, and his attention has not turned in earnest to the 2004-05 state budget. The spending document must be approved this summer, and negotiations will accelerate in mid-May.

The governor said he needed to see more updated budget figures over the next few weeks before he made up his mind about the possibility of raising taxes. “When I look at the numbers, I can make up my mind about what that means,” he said.

Rob Stutzman, Schwarzenegger’s communications director, said the governor was not softening his stance on raising taxes but “expressing his optimism ... for a solution without taxes.” Stutzman said the governor was preoccupied with workers’ compensation and would turn his full attention to the budget once a deal was reached.

“Once he is set on a direction, he’s relentless, and he is set on solving the budget without tax increases,” Stutzman said.

Lawmakers interviewed Tuesday said they had not heard from the governor that he intended to raise taxes, nor did they think he was even sending signals to gauge reaction from lawmakers. “We’ve never had that discussion,” said Assembly Minority Leader Kevin McCarthy (R-Bakersfield).

The governor has steadfastly insisted that he does not want to raise taxes. But he made conservatives uneasy last year when he suggested that he would reconsider his pledge if “there is a change in mood in the state” and Californians embraced tax increases. He said Tuesday that there was no such public demand right now.

During the interview, which took place in a conference room adorned with busts of Ronald Reagan, Abraham Lincoln and John F. Kennedy, Schwarzenegger discussed presidential politics in California. He said Bush’s success would hinge on the president’s commitment to help the state with its problems, such as illegal immigration.

Schwarzenegger, wearing cowboy boots decorated with the California state seal, dismissed the notion that he could help Bush capture California in a matchup with presumptive Democratic presidential nominee John F. Kerry.

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“As I’ve said many times, I cannot do that. Only he can do that,” Schwarzenegger said about Bush.

“The only way he can do it is by letting the California people know that he’s there for them and we’re going through some difficult times right now. The federal government has to come through with those things the state needs.”

As the governor spoke, Shriver was working in her office nearby. She left her job at NBC News in February and is now playing a more visible role in her husband’s administration. The governor made it clear that Shriver was an equal partner in everything he did but said she didn’t try to convert him into a Kennedy-style Democrat.

Schwarzenegger said he doubted that the 2004 presidential election would divide his household, despite differing political allegiances.

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Asked whether his wife would work for Kerry, the governor said: “No, I doubt that will ever happen.

“My wife is a team player,” he said.

“She knows that I’m governor of this state, that I’m a Republican and that it was a huge majority of Republicans who voted for me to be in that position. She has grown up in a political family and is very much aware of the fact that, if you’re a Republican governor, you are supporting the Republican presidential candidate, our president. That is clear.”

Schwarzenegger said he was constantly getting advice from members of the Kennedy clan, including his wife’s uncle, Sen. Edward M. Kennedy (D-Mass.), and her parents, Eunice and Sargent Shriver.

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“It’s like ideas, ideas, ideas,” the governor said about the Shriver family.

“So many times you have to comb through it very quickly to figure out which ones you want to use and the other ones you dismiss. If you throw a problem at them, it will wind them up, all of them -- that’s the way they are. They will talk and talk and talk and talk.”

Having served now more than four months, Schwarzenegger said he was surprised by the powerful influence of special interests in the capital. But he said his administration would not be swayed.

The governor has taken in millions of dollars from businesses and interest groups with dealings before state government. Whatever the appearance might suggest, the governor said, the reality is that no one has gotten special favors.

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He said he had felt no pressure from campaign donors or his team of political consultants to trade favors for support

“I told my team I’m not here to take any money because of a favor,” Schwarzenegger said. “I’d rather give it back. No one can buy me. I don’t want to be bought by anybody. It would make me feel horrible.”


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