Schwarzenegger Says Won't Raise Taxes Davis,hand out $53 million in grants to environmental groups

Reuters ^ | Wed August 20, 2003 | Dan Whitcomb

[comnet]

Schwarzenegger Says Won't Raise Taxes in Calif. Wed August 20, 2003 08:52 PM ET

By Dan Whitcomb LOS ANGELES (Reuters) - With a veteran diplomat and a business legend at his side, Arnold Schwarzenegger said on Wednesday that as governor of California he would wrestle the state's mammoth debt into submission without raising taxes.

Emerging from a meeting in Los Angeles with 19 business and academic leaders, Schwarzenegger laid down his economic program for the first time since declaring his candidacy in the Oct. 7 recall, sounding notes of fiscal conservatism.

"I'm very much a believer that the people of this state have not been under-taxed," Schwarzenegger said, flanked by former Secretary of State George Shultz and billionaire Warren Buffett. "I am in principle against taxes because I feel the people of California have been taxed enough."

Buffett, a top Schwarzenegger advisor and a Democrat, drew a collective gasp from horrified Californians last week when he suggested that Proposition 13 -- the state's landmark, voter-approved measure limiting property taxes amid skyrocketing land values -- should be reconsidered.

But Schwarzenegger, who saw his first campaign turbulence over Buffett's remarks, said he had no intention of tinkering with Proposition 13 and joked that the so-called Sage from Omaha would be wise to adopt the same line.

"I told Warren that if he mentioned Proposition 13 one more time, he has to do 500 sit-ups," the actor said, tossing Buffett a friendly but menacing stare.

Schwarzenegger is one of 135 candidates vying to replace Gov. Gray Davis should voters decide to unseat him in the unprecedented recall election. Although he has never held public office, polls show the action film star among the top candidates.

His campaign appearance came as a federal judge in Los Angeles refused an American Civil Liberties Union request to delay the election, thus removing a major hurdle to the vote. ACLU attorneys had argued that voters in Los Angeles and five other counties would be disenfranchised because they would still be using error-prone punch-card machines.

DAVIS SLAMS SCHWARZENEGGER

Davis, meanwhile, appeared with Democratic Sen. Barbara Boxer in the Los Angeles beach suburb of Santa Monica, not far from Schwarzenegger's restaurant, Schatzi, to hand out $53 million in grants to environmental groups.

Davis took shots at Schwarzenegger's economic round table, saying: "When I had an economic forum two years ago I had a big tent. We need to seek advice and guidance from a number of people. Anyone who wants to take my job ought to have specific plans, not just sound bites or rehearsed phrases from old movies."

Schwarzenegger, who has come under fire from Democrats, the media and even fellow Republican candidates for offering only vague ideas of his platform amid promises to "clean house" in Sacramento, on Wednesday gave details for the first time.

The "Terminator" star said that if elected he would immediately order an independent audit of the state's finances, which he said were hopelessly tangled, quickly work to bring spiraling worker's compensation costs into line and call a special session of the legislature to work on the budget.

"We must have a constitutional spending cap and must immediately attack operating deficits head on," he said. "Does this mean we are going to make cuts? Yes. Does this mean education is on table? No. Does this mean I am willing to raise taxes? No. Additional taxes are the last burden we need to put on the backs of the citizens and businesses of California."

Asked by reporters how he would get cooperation from California's state legislature, which is controlled by Democrats, Schwarzenegger made joking reference to his wife, Maria Shriver -- a member of the Kennedy family.

"I've lived with a Democrat for the past 17 years," he said. "I'm trained to work with Democrats."

Buffett, one of the world's richest men, meanwhile said that one of California's most fundamental problems was its credit rating, saying that "a change was needed" in the state government to see it restored.

He said that credit was like oxygen in that "when you have it, you don't even notice it. But when it's gone, you can think of nothing else."

As for the summit, Schwarzenegger campaign spokesman Sean Walsh rejected any notion that it was a staged event. "Warren Buffett and George Shultz are not a photo opportunity. They are brilliant minds with decades of experience." (Additional reporting by Michael Kahn, Arthur Spiegelman and Gina Keating.)

[Commander8]

Okay, he says he won't, but I'm still very skeptical.

[Newbomb Turk]

Grey Davis will do his level best to bust the bank even harder before he is ousted.

Just like the Clinton pardons he has to get every dime he can now before he is thrown out.

I would bet the slickster is advising him how to do it.

[Hugin]

Davis, meanwhile, appeared with Democratic Sen. Barbara Boxer in the Los Angeles beach suburb of Santa Monica, not far from Schwarzenegger's restaurant, Schatzi, to hand out $53 million in grants to environmental groups.

I'm confused. I thought the state couldn't afford 30 million for the recall election.

[lizma]

hand out $53 million in grants to environmental groups

I think thats OK.....if he uses his own money.

[Torie]

Schwarzenegger Says Won't Raise Taxes in Calif.

Yep, sure whatever. The dirty little secret is that taxes are going to be raised, and raised substantially, no matter who is elected governor next year. The only issue is what systemic reforms will be enacted so that the tax raises are temporary, and subject to a sunset clause. Massive reform is needed, which will probably have to be effected by initiative (public employee pensions, privitization, public school reform, repairing the business climate, etc.), while in the interim perhaps leaving the state without a budget, and returning public employees to the minimum wage. That will take time. Who is most reasonably calculated to declare a Jihad on the state legislature and go for the throat?

Ya I am a moderate, and that sounds immoderate, but I do have some skill with numbers. At least I can add and subtract, and know how to read an income statement in a budget.

Folks, the denial of reality by just about everybody in this state of California is simply awesome.

Next year in California is going to generate a LOT of threads. We live in interesting times.

PS: John, thanks for the kind words on the other thread. When we first became friendly, we disagreed about half the time; now it is down to about 25% of the time. I think that is in part because we really communicate with each other in good and honest spirit.

[AF68]

Every left-wing whack-job organization in the Republik of Kalifornia will find their coffers bulging with taxpayer dollars, courtesy of Gray Davis' largesse, before this recall is over. He's going to beg, buy or steal every vote he can find.

[TBP]

"Read my lips..."

[TBP]

The dirty little secret is that taxes are going to be raised, and raised substantially, no matter who is elected governor next year.

Not if it's Simon or McClintock. But anyone else in the field will raise taxes, or at least try to.

[Torie]

No, the numbers dictate that taxes must be raised, and raised substantially. There is no other way out of the box. Even if the right legislation is enacted (and much of it won't be except by initiative, and in the meantime, much of the spending is mandated by Constitutional requirement), it will take time to kick in. You see, California has no borrowing power left, and has looted all of the trust funds, and done all the deferrals of expenses until the next budget (that trick only works once), that it can. Next year's budget must really be balanced, no ifs, ands or buts. Period.

[section9]

I'm not sure that you'll see public employees down at minimum wage, but that pension system that Davis gave the unions as a present for their support will break the State. That has got to go. Arnold was smart to leave himself an out on taxes. A McClintock, were he compelled to raise taxes from one source or another, would have been crucified as he's already signed "the pledge". Still, I don't see Arnold going at Prop 13 or the Income tax.

Again, what do I know? I'm just a shmuck Floridian who thought about moving back to the state of my birth a year ago. Instead, I thought better of it. Florida is a CCW state, "shall issue" is the standard here, with a growth rate that is phenominal, no state income tax, but plenty of receipts to the state.

It helps, of course, to have a unified Republican Party that refuses to form a circular firing squad. We control both houses of the legislature as well as the governor's chair. No Grayouts here.

I was in California last month. Visited my family in Woodland Hills and dropped by a friend of mine who lifes in La Crescenta in the foothills of the San Gabriel National Forest. This was late July, just as CA was on the cusp of the recall. My friend, who I prefer not to name, is a gun owner and plans to move, with his wife and his career, to one of the Free States, where taxes are lower and the Nanny State doesn't breathe down your back as much. He wants to move to Nevada. Taxes are high. It is harder to start a business. He works for L.A. Department of Water and Power. But he's not an engineer. He spends his hours investigating EEOC complaints to keep the lawyers off the Department's back.

Be Seeing You,

Chris

[Torie]

The only caveat is if we have another stock market bubble, and capital gains recognition kicks in again, which in California is taxed the same as ordinary income. Keep hope alive.

[cyncooper]

You're as wrong with your predictions about Schwarzenegger raising taxes as you were about the story surrounding the Baghdad museum.

[Torie]

I have read somewhere, that without a budget, and insolvency ensues, public employees drop to the minimum wage. But who knows? Maybe the courts will mandate a big tax increase ala Nevada, sort of. The only problem, is that the California Supreme Court is dominated by conservatives. Florida in that branch it ain't. Maybe the 10th Circuit federal court will kick in, which is liberal. So many combinations and permuations, it makes one's head hurt, but it is all quite interesting.

[Torie]

I hope you are right, but I doubt it.

[Lancey Howard]

but I do have some skill with numbers.

How about the number '6'?
That is how many Republican votes are needed in the Assembly to allow the scumbags to raise taxes.

[sergeantdave]

Californians could easily solve the budget crisis if every citizen smoked ten packs of butts and drank five gallons of wine each day.

[chmst]

Hokay, what if California sells some of it's state held land? With no state regulations as to it's use? Maybe reduced taxes on any company that sets up shop there as well? The tree huggers would be up in arms but it could raise a lot of cash in a short time. If you are in debt you sell something, have a yard sale. Why should a state be any different?

[ARCADIA]

The solution isn't to raise or lower taxes, but to increase the volume of taxable economic activity, while reducing expenditures. If you expell 3-4,000,000 illegals and shame the federal government into enacting protective tarrifs to get Silicon Valley pumping again, you can balance the budget very quickly. California is at the forefront of the current economic crisis; but it is not alone. Whatever solution they come up with may very well resonate throughout the rest of the states.

Davis brand of liberalism run amok is dead, but so is the equally short sigthed Darwinistic approach to the economy favored by neoconservative economic globalism.

n2s

[Torie]

All of that takes time to kick in. In the interim, what?