Sacramento’s same old songs

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The San Francisco Chronicle

For a leader promising a “new day” in Sacramento, Gov. Arnold Schwarzenegger has initiated his tenure with some disturbingly familiar political practices.

Schwarzenegger has already invoked two of the tactics that brought deserved ridicule on former Gov. Gray Davis: He is proposing to borrow billions of dollars to cover budget overruns and he is raising political money from special interests that have an enormous stake in gubernatorial actions.

He also seems to have a problem with math. Schwarzenegger instantly erased $4 billion a year in revenue by rolling back an increase in the unpopular vehicle license fee, and is talking about $2 billion in spending cuts — and, even then, he suggested he would wait for legislators to serve up specifics.

Schwarzenegger did offer to forgo his $175,000 salary, which is nice symbolism, but not much of a down payment on a budget gap that is expected to exceed $10 billion.

No one should be deluded into thinking the proposed $15 billion bond, which would require a statewide vote in March, represents much of a fresh start. Most of that money is, in effect, a refinancing of about $13 billion in debt that Davis and the legislators have already rolled up. Schwarzenegger’s proposal will add to that debt burden, and spread it over many more years.

In fairness, it will take time — and political pain — for any administration to squeeze meaningful savings from California’s $100 billion budget. But it must be noted that the new governor’s initial moves, borrowing and tax reduction, are going to complicate the effort to force the state to live within its means. Schwarzenegger’s stump-speech refrain about a “waste, fraud and abuse” windfall is, at least so far, proving illusory. His chief financial adviser, Donna Arduin, presented an initial report that showed what other analysts have been saying all along: The state’s revenue and spending are out of balance by tens of billions of dollars. But she did not identify any easy savings or efficiencies.

Schwarzenegger drew cheers from business groups this week by proposing to slash $11 billion from the state’s $29 billion workers’ compensation system, which should help cut the mandatory premiums that have risen dramatically in recent years. The system does need major reform. But the impediment to strong measures has always been that any savings necessarily come at the expense of a powerful interest group — doctors, trial lawyers, labor unions, insurance companies.

True reform requires concessions from all stakeholders. The problem has been that many legislators are too cozy with one or more of the interest groups that are profiting from the workers’ compensation system.

Schwarzenegger, who was elected on a promise to shield himself from special-interest influence, accepted a six-figure post-election campaign contribution from American International Group of New York, the largest underwriter of such policies in California.

It seems that Schwarzenegger continues to define “special interests” as groups that give money to his opponents. His claim of impeccable independence is undermined by his scheduling of at least five fund-raisers in December, just as he is drawing up his proposed state budget.

This is the same Schwarzenegger who has proposed a “blackout period” to prohibit fund-raising by legislators and the governor during key budget-writing periods.

Schwarzenegger has talked about bringing more “sunshine” to government, but has declared that he will not make public his official appointment calendar — a window into the governor’s priorities — until voters pass an open-government measure that he will propose.

There is much to admire about the spirit of confidence and bipartisan overtures that the new governor has brought to a Capitol long infected with pettiness and partisanship. But, ultimately, Schwarzenegger will be judged by his actions. That means he will have to expend some of his popularity on tough choices, and he should lead by example when it comes to insulating himself from special-interest influence and opening his administration to public scrutiny.

His actions will determine whether the recall election really produced a “new day” and genuine change — or just a Gray Davis with charm.

Consumer Watchdog
Consumer Watchdog
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