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Time ticks for Schwarzenegger to seal his legacy

Gov. Arnold Schwarzenegger has made the rounds of national television news shows in recent months, met with President-elect Barack Obama and convened conferences, discussing the world economic crisis, the pitfalls of partisanship and the virtues of clean energy.

Now, in the new year, he has returned to Sacramento with a narrower, and much more painful, task. He must address Californians on Thursday about the state of their state, with the government he was elected to repair five years ago in a crisis worse than the one he inherited -- one that has left the state’s coffers short of cash, services sputtering to a halt and negotiations in the Capitol at a standstill.

The first California governor elected in a recall election will leave office in two years, giving Schwarzenegger a limited window to determine which narrative becomes his legacy. Will he be remembered as a leader who leveraged his star power to promote visionary ideas? Or as the action-movie hero who unseated a sitting governor with a vow to make government function again, but was unable to deliver a happy ending?

Although Schwarzenegger and others say his good intentions have been foiled by extremist state lawmakers, an unstable tax structure, a broken budget system and a global recession, none of that may matter when history is written, some analysts believe.

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“So far, he hasn’t solved the problem that he was elected to solve,” said Gary Jacobson, a political scientist at UC San Diego. “In crisis you have opportunity to be great, if you can pull it off somehow. If you can’t, it’s hard to be perceived as a success.”

Schwarzenegger and his aides have been searching for ways to broaden his focus to ideas for which he would like to be known, such as improving healthcare and education, even as he proposes to slash billions of dollars from services in those areas.

The governor, who takes pride in a lifetime of achievements in bodybuilding, Hollywood and business, would like to replicate what he considers some of his best political moments.

He signed a landmark bill to reduce global warming and advanced other policies to increase the use of clean energy; teamed with lawmakers on a successful campaign for $42 billion in voter-approved public works construction bonds; and issued a call for post-partisanship that reverberated across the nation.

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“What he’s been able to do is to take leadership on national issues, and really ahead of everybody else, and I think he’ll continue to do that,” said Duf Sundheim, who was state Republican Party chairman through Schwarzenegger’s first term.

“He was talking about infrastructure well before anyone,” Sundheim said. “Now that is a key part of what Obama is talking about. He was talking about green technologies. . . . Last night, I went from CNN to NBC to Fox, and all of them were talking about post-partisanship with respect to Obama. That was a term that Schwarzenegger came up with.”

The governor’s initial vision for the state has not turned out as well. He took office in November 2003 with a commitment to “saving California.” In his first State of the State speech, he boldly told constituents: “Never again will government be allowed to spend money it doesn’t have.” He championed a last-ditch borrowing plan, a Constitutional amendment for a balanced budget and a rainy day fund he said would take care of the problem.

Five years later, the governor is describing the future as fiscal Armageddon. His administration has been struggling to align expenses and income for the last year and a half, laying off employees and canceling contracts.

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Today, Schwarzenegger presides over a California that could run out of cash to pay bills by Feb. 1, forcing officials to halt tax refunds and issue IOUs.

He has repeatedly criticized lawmakers as ideologues and slaves to interest groups. His fellow Republicans abandoned budget negotiations in December.

And the populist who destroyed a car to symbolize what he would do to a hike in the vehicle license fee and who swore never to raise taxes, now proposes raising $14 billion mostly with new taxes, fees and a reduction of the child tax credit. Instead of introducing his next proposed budget with a speech, as governors normally do in early January, he had his aides release it quietly on New Year’s Eve while he was on vacation in Idaho.

Among Californians, Schwarzenegger’s approval ratings have dropped from 60% to 42% between November 2006 and last month, according to polls by the Public Policy Institute of California.

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Outside the state, though, Schwarzenegger has remained a highly touted expert on national affairs, receiving generally fawning coverage. A December segment on “60 Minutes” touched on the state’s financial crisis, but mostly focused on how Schwarzenegger would “revolutionize” energy policy. The CBS correspondent showed off by lifting weights in front of the governor and took a ride in Schwarzenegger’s vegetable-oil-powered Hummer.

“The national media has yet to really figure out that things are a mess out here,” said a former Schwarzenegger advisor who asked for anonymity out of concern for offending the governor. “Here in the state, the voters have grown tired of it.”

Schwarzenegger has continued to focus beyond California. On Wednesday, a day after saying that the state would go off a “cliff” if it runs out of money at the end of the month, he joined New York City Mayor Michael Bloomberg and Pennsylvania Gov. Ed Rendell in a conference call with reporters about the importance of building infrastructure. Obama had just included the idea in his economic stimulus plan.

“We have been dealing . . . with this issue for many, many years here in California,” Schwarzenegger said.

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He did not mention that only a few weeks ago, his state’s fiscal morass forced an abrupt halt to construction on some of those projects that were in progress to build roads, schools and stronger levees.

Bill Hauck, a California State University trustee and president of the California Business Roundtable, said the school system shut down $1 billion in projects that had workers on the job and materials purchased. Hauck is close to the governor, who he says is “making every proposal he can reasonably make” to stabilize state finances.

“I think that is clearly the mandate that he had coming into office, and I know that he feels strongly that he needs to accomplish that objective before he leaves office,” Hauck said.

Schwarzenegger pushed successfully last year for Proposition 11, an initiative to create more competitive legislative districts. He is expected to campaign this year for voters to create an improved rainy day fund, is backing a commission to reexamine the state tax structure and is flirting with supporting an initiative to create open primaries and elect more moderate candidates.

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But others say that he does not have enough time left for significant progress. Fred Keeley, a former Democratic assemblyman and now a leader of California Forward, a government reform group, said Schwarzenegger wasted his early popularity taking on unions in 2005 instead of seeking meaningful solutions to flaws in state term limits, the budget process and the tax system.

“Gov. Schwarzenegger will leave a very, very positive legacy with regard to the environment,” Keeley said. “Almost all of the rest of his efforts will underscore how broken California’s governance structure is, and how there’s a crying need for dramatic change.”

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michael.rothfeld@latimes.com

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