Schwarzenegger begins campaign for ballot measures

Gov. Arnold Schwarzenegger on Thursday kicked into gear his campaign for a slate of ballot measures to come before voters May 19 -- proposals that he says would bring an end to the state’s chronic financial crisis.

The package is intended to keep the state from falling again into a deep fiscal hole. Californians will be asked to prolong new but temporary tax increases while simultaneously limiting government spending; to borrow against the state lottery; and to move money they approved for preschoolers and the mentally ill to other purposes for a while. They will decide whether to restore some funds to schools and community colleges and will gain the power, if they want it, to punish elected officials in the event the state does incur future deficits.

The campaign, which Capitol staffers say will be the governor’s focus over the next several weeks, offers Schwarzenegger an opportunity to do over his disastrous 2005 special election, in which voters rejected his entire package of changes to state government.

Today, as in 2005, the core issue is spending restraints that would put a tight rein on government growth. But the proposal has been crafted differently this time, and many of the well-funded interest groups that worked to defeat Schwarzenegger in 2005 are so far sitting this campaign out.


Some of those former opponents have something to gain if Schwarzenegger’s new package passes. The temporary tax hikes that fund programs supported by teacher unions and other interests would remain in place for two additional years, and schools eventually could be guaranteed more money if the governor is successful.

In a speech Thursday before the Commonwealth Club of California in San Francisco, Schwarzenegger called the package of six ballot measures “the agreement that ends the current budget deficit and changes our approach to budgets in the future.”

The governor said that after five years of seeking to change how business is done at the Capitol, and at times finding himself as frustrated as the people who elected him, “I am not frustrated today. I feel good about the change this budget reform will bring to our state.”

Though opposition to the measures is unlikely to be well-funded without major union support, it is shaping up to be aggressive.


The Howard Jarvis Taxpayers Assn., conservative talk radio hosts and anti-tax lawmakers are fighting to stop the tax hike extension, which they say would harm the economy. Advocates for the poor are banding together to battle the spending cap, which they say could trigger devastating cuts in services.

The League of Women Voters of California, which has long advocated an overhaul of the budget process, is urging voters to reject almost the entire package of propositions. League President Janis Hirohama called the measures “hurriedly drafted positions” that “will only make our fiscal situation worse.”

Supporters of the ballot package are expected to mount an aggressive campaign that includes television and radio advertisements and considerable time on the stump for Schwarzenegger.

The governor’s campaign is being spearheaded by some of his close political advisors, along with the California Chamber of Commerce, the Business Roundtable and other interest groups, operating as a campaign committee called Budget Reform Now.

Opponents have not yet opened a formal campaign account. But Jon Coupal, president of the Howard Jarvis Taxpayers Assn., predicted they would ultimately raise enough money to run advertisements on radio, if not on more-expensive television.

“I think we will be better financed than people realize,” Coupal said. “We’re not going to be able to raise the millions of dollars the other side will, but I do think we will be effective in getting our message out.”

He said that effort would be bolstered by two Republican candidates for governor in 2010: former EBay President Meg Whitman and Insurance Commissioner Steve Poizner. And he said he’s had private conversations with a dozen Republican Assembly members who voted for the spending cap but were now prepared to renounce it because they were not aware it was linked to an extension of tax increases.

The six proposals were placed on the ballot as part of a bipartisan budget deal the governor struck with lawmakers last month. Some of the measures are crucial to keeping the new budget -- which wiped out a roughly $42-billion deficit -- from falling apart.


In addition to limiting government growth, the electorate will be asked to borrow $5 billion against future lottery profits, raid mental health and early childhood education programs for hundreds of millions of dollars annually over five years and eventually restore billions of dollars that were recently cut from education.

Voters will also be asked to bar lawmakers and the governor from receiving pay raises when the state runs a deficit.

The extent to which Democrats will be involved in the campaign is unclear. Many have expressed ambivalence about the ballot measures, which would keep revenue flowing to the state temporarily but could ultimately force substantial cuts in government healthcare and social service programs.

Some point to Colorado, where in 2005 a GOP governor and business officials found themselves asking the public to relax a spending cap they had championed years earlier. Because of the cap, they said, the state had run short of funds for basic road projects and other government programs.

In California, Schwarzenegger and GOP legislative leaders were able to push the spending curbs into the ballot package despite the spirited objection of many Democratic lawmakers.

As part of that deal, they agreed to temporary tax increases on vehicles, personal income and sales long sought by Democrats but resisted by Republicans.

The tax hikes will remain in place for four years if voters approve the spending restraints; otherwise they expire in 2011.

Assembly Speaker Karen Bass (D-Los Angeles), who helped negotiate the package, said it would be important for Democrats to explain to their supporters why the state’s fiscal crisis made it necessary to siphon money away from popular mental health and children’s programs.


“I completely anticipate that many or most of my members will be out campaigning” for most of the propositions, she said, adding that the Democrats may choose to speak to local groups or raise money for the “yes” effort.

The fiscal restraints would prohibit the state from spending the revenue windfalls that are typical in California when the economy is good and direct surplus money to a rainy-day fund for leaner times.

“States that have a rainy-day fund are doing better than those that don’t,” Schwarzenegger said. “We need this discipline.”