Governor's Budget Bill Comes Due (Arnold Caught Between Democrats And Republicans)

Los Angeles Times ^ | 01/05/04 | Peter Nicholas And Jeffrey L. Rabin

[goldstategop]

The governor's choices are limited. Because of voter-backed initiatives, constitutional mandates and contractual obligations, as much as three-fourths of the state's $100-billion budget can't be touched, Ross said. Within the narrow slice of the pie over which he has discretion, Schwarzenegger is expected to call on lawmakers to cut spending on state programs such as Medi-Cal and Healthy Families, along with prisons, colleges and universities.

"Virtually every aspect of state government is going to be asked to shoulder part of the savings and sacrifice to get our fiscal house in order," Palmer said. ...

Some Democrats applauded the reversal, interpreting it as a sign that Schwarzenegger will resist the steeper cuts embraced by conservatives in the Legislature and his own administration.

"The governor has shown himself to be his own man, as he begins to learn the correlations between what he believes and what programs serve those beliefs," said Sen. Don Perata (D-Oakland).

Barring a tax increase, Schwarzenegger will have no choice but to propose deep and broad-based spending cuts that may clash with his own values if he is committed to balancing the budget, lawmakers and financial experts said.

"Whatever decision he makes, it's going to have a human impact," said state Sen. Martha Escutia (D-Whittier). "He has to weigh what his bottom line is in terms of how much human pain to impose. And I don't frankly see how he can get out of it — whether it's the developmentally disabled or poor children who need health care or middle-class children who want to go on to higher education. There's going to be pain."

If Schwarzenegger relents and raises taxes, he risks alienating his base of Republican voters. Some are already unnerved by a comment that signaled flexibility on the question. Were voters to show an appetite for new taxes, the governor said at a news conference, he would be inclined to listen.

"Every conservative advisor he has howled in protest when he made those comments, and he was chastened by that," said Stephen Moore, head of a Washington, D.C., political group called Club for Growth and a Schwarzenegger appointee to a committee that reviewed California's finances. "It was really a matter of him being a political newcomer and new to the game.

"I said to Donna [Arduin, the governor's finance director], 'Even if you actually thought that maybe we could raise taxes in a year or two, you wouldn't want to say that now because it weakens your bargaining position.' It was tactically and politically a blunder."

Perata said he believes a tax hike is necessary. At a meeting with Schwarzenegger, Perata said, he gave the new governor a copy of "The Sopranos Family Cookbook" as a gift. But he said he wishes he instead gave him longtime journalist Lou Cannon's recent biography of Ronald Reagan, which describes how the Republican raised taxes in his first year as governor of California in 1967.

"He ought to be taking a page out of Ronald Reagan's playbook," Perata said, "because faced with the same kind of inherited problem ... Reagan raised a series of taxes and he did it within six months" of taking office.

[goldstategop]

State Senator Don Perata wants a tax hike. Steven Moore of the Club For Growth says that undercuts Arnold's campaign pledge. The Governor is caught between the Democrats and Republicans on the state budget. Both his State Of The State address on Tuesday at 5:00 p.m and the budget released Friday is going to tell us all just how Arnold plans to bring order to California's fiscal house - without a tax increase that can yet bring on board the Democrats who say one is needed to balance the budget. Its going to be an interesting year in California.

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