What’s with Arnold?

Since taking office after a special recall election in 2003 and re-election for a full term in 2006, California Governor Arnold Schwarzenegger has been pushing for major fiscal changes in the Golden State.

These changes include public pension cutbacks, spending constraints on the state, and an overhaul of the tax system. With fewer than 140 days left in office, the “Governator” is making his last stand for goals that have so far eluded him, clinging to “an overdue state budget for a last bit of leverage before he fades from relevancy,” as reported by the Los Angeles Times on August 23, 2010.

The budget process in California is rather convoluted but, essentially, the State Constitution requires that a budget be in place by June 15.  Well, the Constitution is really only a piece of paper—and the budget process has become a quagmire in recent years.  Political posturing, unprincipled legislators and voter-approved spending mandates have all contributed to the fiscal woes of the Golden State—not to speak of the economic recession that has hit the state hard.  And the Governor ain’t helping!

As of today, the state budget is 54 days overdue. Governor Schwarzenegger has made it clear that he will not sign a spending plan until the State Legislature retrofits the broken fiscal system that has bedeviled California, and him personally, for years.  If his conditions are not met, the Governor threatens, he will leave the budget in his successor’s lap—a successor to be elected in November.

Increasingly, the Governor’s “wish list” for the state budget is being interpreted as a ransom note.  “This is a governor that holds the state hostage,” said Assemblywoman Noreen Evans (D-Santa Rosa). “How irresponsible is that?” State worker furloughs resumed last Friday, wreaking havoc with state agencies that had to reschedule appointments. How much time was wasted doing this, rather than dealing with what these agencies are supposed to be doing?  An emergency fund to pay health clinics that serve the poor has run dry; the final payments go out next week on Monday. What will be the effect on the people dependent on these services, and on the state as the health of its poorest deteriorates further?  And state Controller John Chiang has warned that IOUs could be as little as two weeks away as the State of California will be unable to meet its obligations.  Not good news for the reputation of one of the largest economic engines in the world!

“I have two choices as governor, especially since this is my last year,” Schwarzenegger told a group of Bay Area business leaders earlier this month. “Do I want to go and just make everyone happy and … go along with them, or do I want to go and, you know, wage this battle?”  Most Californians probably would agree that it is not the job of a Governor to ‘make everyone happy.’  However, the problem with Schwarzenegger’s position is that he is threatening the Californians who have the least, while those who have the most have nothing to worry about on a daily basis.

Democratic lawmakers have chafed at the governor’s ultimatums, arguing that this year’s fiscal imbalance needs to be tackled first. They are pressing for more than $4 billion in tax hikes to balance the books. Schwarzenegger, on the other hand, wants more cuts.  He wants to eliminate California’s welfare program and daycare for 142,000 children of low-income families; to further pare down education funds; and to cut money for home health aides to help the elderly, blind and disabled.  Furloughing state workers will create only problems for residents who need services while cutting into the livelihoods of state workers, thus impacting the economy even further.

“If he wants to achieve some of the legacy items that he consistently refers to, it’s not going to be done—will not be done—with the kinds of cuts that he is calling for,” Senate President Pro Tem Darrell Steinberg (D-Sacramento) told reporters recently. “Period.”  So, there we are!

This current budget impasse is the fifth longest in California history. There is no breakthrough on the horizon, although Schwarzenegger has said repeatedly that he wants to strike an accord.  “It’s not just my way or the highway,” he has said.  Yet, looking in from the outside, that is exactly how it is!  There doesn’t seem to be any negotiating on the Governor’s part, only threats.  And thinking about the legacy of this Governor—well, need we say more?