The first “independent expenditure” television advertising campaign of the 2006 California governor’s race has just begun. It is, not surprisingly, on behalf of the now under-funded former action superstar-turned-Republican Governor, Arnold Schwarzenegger.

The U.S. Chamber of Commerce has begun TV advertising on behalf of Arnold, using Arnold’s familiar theme from his endless string of free media appearances on behalf of his big infrastructure bond, “Build It.” The spot endlessly extols his program, and can be viewed here.

After three phone calls to Chamber headquarters in Washington, D.C. over a two-hour period of time, I finally got Chamber spokesman Eric Wohlschlegel on the phone.

I asked him three questions. How much is the U.S. Chamber of Commerce spending on this advertising buy to help Arnold? Over what period of time? And what is the source of the funding for the pro-Arnold advertising?

The California Chamber of Commerce has been one of the governor’s closest allies. The U.S. Chamber of Commerce is one of the closest allies of President George W. Bush’s administration. “Independent expenditure” campaigns were a staple of the Bush 2004 re-election campaign. Governor Schwarzenegger’s new chief political strategist, Mattthew Dowd, was Bush’s chief strategist in 2004. Governor Schwarzenegger’s new campaign manager, Steve Schmidt, was head of the rapid response team in the Bush 2004 campaign.

Update: I’ve just learned that Mentzer Media Services, the media buyer for various pro-Bush “independent expenditure” campaigns in the 2004 election, including the anti-Kerry “Swift Boat Veterans,” bought the time for the Chamber of Commerce’s pro-Schwarzenegger drive. I reported in late January that they were checking around the California media markets on rates and availabilities.

http://www.uschamber.com/ca/comeback

The California Comeback

California has made significant progress since 2003. The past three years have seen substantial accomplishments for the business community and economic progress for all Californians.

California employers have added more than 400,000 jobs. The state's unemployment rate has fallen from 6.7% to the low 5% range—rates not seen since before the September 11, 2001, terrorist attacks. The number of unemployed persons has fallen below 1 million for the first time in nearly four years. Total personal income is growing at more than a 6% annual rate today, compared with a 4.5% annual rate in November 2003.

Fiscal Responsibility
The California budget deficit has been reduced without raising taxes. In fact, over the past three years the state has held the line against billions of dollars in new tax hike proposals.

Importantly, the state repealed the tripling of the car tax, returning $600 million to vehicle owners and providing more than $4 billion in annual tax relief.

The budget deficit is 72% less than it was projected to be for 2006-2007, and reforms have resulted in $4 billion in new revenue.

At Governor Schwarzenegger's urging, voters passed Proposition 57, the Economic Recovery Bond Act that refinanced the $22 billion in inherited debt and saved the state from going bankrupt; and Proposition 58, the Balanced Budget Act that requires the legislature to enact a balanced budget and creates a fiscal reserve fund.

Business and Jobs Climate
In addition to an improved fiscal and tax climate, the state has made other important gains that will keep the business and jobs climate competitive. In 2003, a major workers' compensation reform package was enacted that reduced costs to business by 46%.

And Californians took a major step toward improving the state's legal climate by passing Proposition 64 last year and ending "shakedown lawsuits." In the same election, voters overturned a state law that would have imposed a crippling health care mandate on small businesses. Further, countless anti-business, anti-job legislation has been vetoed. For example, 2005 alone saw vetoes of bills that would have

Increased the minimum wage and mandated automatic indexing
Forced employers to pay unemployment for striking workers—effectively forcing them to subsidize strikes against their own companies
Encouraged new "sue your boss lawsuits"
Increased litigation costs on healthcare insurers and self -insurers
Increased harassment of employers by government agencies by requiring the referral of an unspecified labor violation to taxing agencies for a tax audit
Imposed restrictions on companies to source around the world in order to stay competitive.

International Gains
The governor and the California business community strengthened ties with China by making a successful trade mission to the world's largest marketplace of 1.2 billion people. The six-day mission included events marketing agriculture, encouraging tourism, discussing intellectual property rights and promoting business in the state.

Yet, progress in the field of trade has extended far beyond diplomacy and lobbying. Foreign trade through California ports increased nearly 25% during last two years.

Infrastructure Needs
California has finally begun to focus on its critical infrastructure needs. The governor has enforced Proposition 42, ensuring that all sales taxes on gasoline are spent on transportation infrastructure—rather than allowing their diversion to general spending. In addition, the renegotiated Indian gaming tribal compacts will deliver $1 billion in highway funding. This is only the beginning—the governor has proposed $222 billion to modernize the state's ailing transportation infrastructure.

Education and Workforce Preparation
Finally, the state has made robust investments in education. Last year California invested a record $50 billion, and the governor gave schools $3 billion in additional funding. Two bills were signed into law that promote workplace readiness, including one that created the California Career Resources Network. This year the governor has proposed increasing funding by another $4 billion, which would raise per pupil spending to almost $11,000—the highest in California history.

No one can suggest that California's recovery is complete. But it most certainly has begun. Fiscally and economically, the state is in far better shape than it was three years ago. Conditions will continue to improve if California learns from its past mistakes and continues to embrace policies of fiscal and tax discipline and trade promotion while not imposing new burdens on job creators, small businesses and entrepreneurs.

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