Staking Out Middle Ground on Taxes, Deficit Is Paying Off for Westly

Give Controller Steve Westly credit: He has positioned himself in a terrific spot running for governor, right where there are hordes of swing voters.

He has staked out centrist ground where it will be difficult for opponents to lay a glove on him, despite all their catcalls.

After all, who can argue against the premise that government should go after the money it’s already owed from tax cheats and make better use of the funds it currently has before asking taxpayers to dig deeper?

It doesn’t mean he’d never raise taxes -- only that they should be a very last resort.

It’s simplistic. But it’s also simple logic. And Westly is the only one emphasizing it.

He has been for well over a year now, and the message finally is getting out, due largely to a self-financed TV ad campaign that has been introducing this mega-rich candidate to the electorate for the last three months.

Meanwhile, Westly’s opponent in the June 6 Democratic gubernatorial primary, Treasurer Phil Angelides, has been unable to afford TV ads in recent weeks. And his previous spots weren’t effective anyway, based on polling.

The upshot is that onetime underdog Westly suddenly is running 11 points ahead of Angelides in the Field Poll, 37% to 26%, with a third of the Democratic electorate still undecided. Westly is dead even with Gov. Arnold Schwarzenegger in a hypothetical November matchup.

The controller has adroitly placed himself in the middle between Schwarzenegger and Angelides on the most important problem facing state government: How to balance the books without cutting vital services, especially education.

Schwarzenegger stubbornly refuses to even consider raising taxes, as Republican governors have in the past. Angelides has managed to come across as a tax-first, ask-questions-later lib.

Angelides may have the right policy -- California should be investing more in its future -- but Westly probably has the correct politics. He’s offering the public a panacea without pain -- and a cogent rationale for avoiding higher taxes.

And face it: Voters may accept another soak-the-rich tax, as proposed by Angelides, but they won’t consent to what’s really needed -- a comprehensive overhaul of California’s tax structure, causing some pain -- until they’re satisfied that Sacramento has done what Westly argues it must.

What can’t be predicted yet is whether Democratic primary voters ultimately will side with the candidate who long has contended that, realistically, the state must raise taxes to check California’s downward spiral -- or whether they’ll buy Westly’s pitch.

“It’s complete mythology to suggest that the Democratic primary is dominated by liberals,” says Westly’s chief strategist, Garry South, who also ran recalled Gov. Gray Davis’ campaigns.

But pollster Paul Maslin, another Davis alum now advising Angelides, says Democrats are perfectly willing to tax the rich for schools, and they laud the treasurer for “stepping up to the plate.”

Westly, 49, brought his show -- literally it was a show -- to the Sacramento Press Club on Tuesday. He began perfecting it “off Broadway” in the rural hustings two months ago, accompanied by local TV ads.

Not having seen this former EBay nerd and Stanford business lecturer for a while, I admit to being a bit mesmerized.

Only months ago, he was a basically boring stiff behind a lectern. Now, he’s a bouncing, gesturing performer with a mobile, clip-on mike and an effective PowerPoint presentation -- sounding like he’s peddling time shares at a resort or even emulating that used car salesman in the movie classic “American Graffiti.”

Actually, the hard sell was a bit distracting, at first, until the message began penetrating and one realized this was a potentially salable product.

“What I want you to remember about what I say here today,” he began -- and then preceded to deliver and redeliver his main message: “We’re told every day there are only two ways to balance the budget. Raising taxes. Cutting essential programs. But I’m here to suggest to you there is a different way....

“Before we rush off to raise taxes or slash essential programs, let us talk about this.”

Using the PowerPoint display -- the first time I’d ever seen a candidate use one -- the controller bragged about his having netted $1.5 billion through two tax amnesty programs “without having to raise a nickel in taxes....

“But is this all of the story? No, there’s more.”

He’s going after tax cheats. Wants to hire more tax auditors. Proposes reducing the lottery prize pot to provide $126 million more for schools. Advocates procurement reform. Says to get tough collecting bad debt.

“If all those things and others we’re presently looking at don’t help close the budget deficit, then we have to consider all other options,” he concluded. “I’m merely suggesting to you that taxes should be the last resort, not the first resort. Try everything else first. So far no one has. I will.”

Fine, but he’s a living contradiction: He has endorsed filmmaker Rob Reiner’s preschool initiative that would raise income taxes on the wealthy. His explanation: Preschool “is my one priority this year” that’s worthy of a tax increase.

Does he then place a higher priority on preschool than K-12? “Yes.... This is where I think we get the biggest bang for the buck.”

Still, he pledges to “fully fund” education.

Angelides says his opponent’s numbers don’t add up -- that he doesn’t have a real plan.

But Westly’s pitch isn’t about a multi-point plan. It’s about a guiding principle -- one that many voters surely will find attractive.

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Reach the writer at george.skelton@latimes.com.