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Have you read the Cato Report? What a joke! They don't care about borrowing, as long as taxes aren't raised. Borrowing is just another tax--Later! They misstate the deficit that Arnold inherited ($8 Billion, not $15). And the car-tax was soon to be dead, whether Arnold was in office or anyone else. They give him credit for the California Performance Review which was filled with unsupported "plans" of which he has since abandoned. They also give him credit for his "blowing up boxes" campaign to abolish boards and commissions, which he has also abandoned. Now that he has abandoned the spending cap proposal, I guess they'll give him an A+, as long as he doesn't raise taxes. Like I said, Read the Fine Print, Not the Propaganda.

Here's some CATO snips:

Full Text of Policy Analysis no. 537 (PDF, 1 MB)
SPENDING RESTRAINT
The freshman class governors with the best spending restraint records are Craig Benson of New Hampshire, Jennifer Granholm of Michigan, and Arnold Schwarzenegger of California.
Governor Schwarzenegger started his term in office with some much-needed budget cutting: a net of around $2.5 billion from Gray Davis’s baseline spending level. Although part of Schwarzenegger’s budget-balancing plan included a large and controversial amount of debt, Schwarzenegger did do a substantial amount of cutting and realigning programs to avoid future cost overruns. He also recently held a huge “garage sale” of unused state assets, such as computers and furniture, to raise funds for debt retirement. Although his 2005 budget compromise with the state legislature increased spending above what he requested—indeed, it raised overall general fund spending by 4 percent in real per capita terms and brought spending levels close to where they had been when he entered office—the state is still far better off with him in charge. The state is no longer teetering on the verge of bankruptcy and inability to pay its bills, even if it still remains one of the most indebted states in the union.
TAX POLICY
The freshman class governors who have so far racked up excellent records in tax policy are Arnold Schwarzenegger of California, Craig Benson of New Hampshire, Mike Rounds of South Dakota, Phil Bredesen of Tennessee, and Mark Sanford of South Carolina.
Schwarzenegger’s main strength was in resisting the call for tax increases to balance a badly overextended budget. In fact, Schwarzenegger repealed the unpopular car tax hike put into place during the waning days of the disastrous Gray Davis administration, thereby providing a tax cut of more than $2 billion in 2004.
OTHER
The freshman class of governors has within it some rising stars who deserve praise for cutting taxes and controlling spending, especially in light of the budget deficits they encountered upon entering office. The bright new stars in the GOP are Arnold Schwarzenegger of California and Mark Sanford of South Carolina. The longer those governors stay in office, the more they must resist the temptation to relax their vigilance.
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Arnold Schwarzenegger’s historic win in California’s recall election has been a salvation for the state’s beleaguered taxpayers. Within hours of taking office, Schwarzenegger cut taxes by more than $2 billion by repealing Gray Davis’s tripling of the car tax. Inheriting a $15 billion budget deficit, Schwarzenegger proposed a balancing plan that did not raise taxes. He proposed slashing spending by around $6 billion over two years and relied on a $15 billion bond issue to cover the rest. The legislature gave him much of what he wanted, and for the first time in years spending was under control in Sacramento. Borrowing is not as preferable as cutting the state’s obese $105 billion budget further, but it is far preferable to the alternative: raising taxes. The budget negotiated in 2004 reversed some of the gains of his first: it increased net general fund spending by around $1 billion but is still below where it was headed under Davis. Schwarzenegger held a government-wide “garage sale” to get rid of excess state property, from computers to staplers. He created a budget task force that found that $32 billion could be saved over five years and recommended, among other things, abolition of more than 100 state boards and privatizing state assets. By the look of things, Schwarzenegger isn’t through shaking up the power structure in Sacramento.