Purse-string posturing

Gov. Arnold Schwarzenegger has spent the last five years trying to reinvent California’s bureaucracy in line with the recommendations of an expert panel he assembled in 2004, only to hit a brick wall erected by the Legislature, interest groups and the public. Perhaps hoping that the state’s fiscal crisis would at last give these ideas some traction, he recycled many of them in his revised budget proposal released Thursday -- including, most controversially, a plan to sell off prominent state properties such as Memorial Coliseum in Los Angeles, San Quentin State Prison north of San Francisco and the Del Mar Fairgrounds in San Diego County.

It’s not that unloading surplus property is a bad idea -- does California really need to be in the business of owning sports stadiums or horse-racing venues? But it’s not a solution to the state’s immediate money troubles.

Though the time might be right politically for a fire sale, it could hardly be more wrong financially. With the real estate market at its nadir in the midst of a recession, selling these properties now would be a good way of ensuring minimal return on taxpayers’ investments. Moreover, many of them (including the Coliseum) have multiple obstacles to transfer of ownership, and a sale would encounter serious opposition from lawmakers and the public. By the time the deals were completed, years from now, the state would probably be out of its budget mess.

Schwarzenegger’s reason for proposing the property sales may be as much about politics as budgeting. He may, for example, be hoping to lure moderate Republicans into his camp. Their votes will be needed to approve a budget deal this summer, and at least one such moderate, state Sen. Jeff Denham (R-Atwater), has been campaigning for years to sell the Coliseum and other assets.

The governor also proposes to eliminate or consolidate about two dozen boards, bureaus and departments to reduce the state bureaucracy, another suggestion from the 2004 California Performance Review that he has tried to implement before. That’s a plan that could have an immediate, if minor, effect on state spending, and it would genuinely eliminate the government waste that Republicans often rail about but seldom identify.

We’ll have a clearer sense of the fiscal situation after Tuesday, when voters will weigh in on initiatives that would redirect $6 billion to make up a revenue shortfall -- yet even in the unlikely event that they all pass, the state would still face an estimated gap of $15 billion. Prepare for more belt-tightening, more taxes and fees, and a lot more posturing.