Final Budget, Familiar Battlelines

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Governor's Office

Photo: Governor's Office

Eighteen minutes. Four questions from reporters. And with that, Arnold Schwarzenegger made a beeline for the door Friday afternoon, a bit of a demeanor of frustration even as he delivered remarks full of bravado and tough talk about what he wants in the state budget.

This was the last state budget he was to craft as governor, and it felt familiar; even the most severe proposal -- the complete elimination of the state's welfare-to-work program -- elicited this response from an NPR editor I was working with: "Didn't he already do that?"

Yes, but he's doing it again. Call it the 'Revise Rewind.'

The so-called 'May Revise' of Schwarzenegger's January budget was full of bad news, but not for everyone. The winners, if you can call them that: Republicans and big business (no new taxes or cancellation of 2009 tax breaks), higher education (promises made about funding were kept), state parks (they get their funding back even without the Guv's plan for offshore oil revenue) and his longtime favorite after-school programs (almost all other child care services were axed, but not the ones Schwarzenegger enticed the voters into creating eight years ago).

There was also a lot of what could either be called 'blame' or 'I told you so' in the governor's remarks:

"I have begged the Legislature to act, to do budget reform, to do tax reform," he said about the systemic budget crisis.

"Because these judges have prevented us from using a scalpel to go and trim some of those programs, we now have to use the ax," he said about lost court battles over some social services cuts which, in truth, many had suggested from the beginning were unlikely to pass legal muster.

"If we would have a rainy day fund today at 12.5% of our annual budget, when it was $100 billion, it would have been $12.5 billion," he said in a nod towards his failure to get such a large surplus system in 2008... which fails to recognize, of course, the deal he cut almost immediately after taking office in 2003 for the much smaller rainy day fund contained in Proposition 58.

Some of the alliances from those early Schwarzenegger years have fast faded away. One of the best examples -- local governments, which were all smiles in November 2004 as the Guv championed a relatively strict new constitutional amendment related to state government raids of their coffers. Now, months after they complained about him championing the use of the state's limited borrowing provisions in that measure, county and city officials are blasting Schwarzenegger's call today for eliminating things like CalWORKS, mental health programs while also pushing non-violent offenders into local jails to help cut state prison costs by about $1 billion.

"If this budget becomes a reality, the devastation upon Californians will be on par with the after-effects of a major natural disaster," said the statement from Tony Oliveira, a Kings County supervisor and president of the California State Association of Counties. Oliveira's county has an unemployment rate of 18.6%.

But it's unlikely this budget will, in fact, become reality. Senate President pro Tem Darrell Steinberg, whose growing frustration with Schwarzenegger will be one the subplots to watch this summer, quickly called it a "non-starter" in a press conference. And given how both Steinberg and Assembly Speaker John Perez have been sounding about the 'Big 5' budget negotiation process with the governor, Schwarzenegger may have a lot of free time on his hands this summer to do other things... while legislators craft the budget without him.

That being said, the governor played the one trump card today that he still holds... and his initial gambit is a big one. "I will not sign a budget if we don't have pension reform and budget reform," he said at today's event.

The latter might actually have a chance at being realized, if everyone can eventually agree on just what they mean by 'budget reform.' Schwarzenegger's comments today seemed a rehash of previous pushes for a spending cap; referring to his chart of spending, he mentioned the need for a "a straight line based on inflation and population increase," which sounds like a cap. Democrats aren't likely to do that, but they did say today they're serious about the issue of realignment, of making spending and revenue decisions more a part of what happens in local communities than what's dictated by Sacramento.

But pension reform... that's even tougher. Especially during the middle of a budget debate that's also happening in an election year. Still, Schwarzenegger's demand for both issues... with some requests for tax reform thrown in today for good measure... is either a sign that he intends to stay relevant, that he has an eye on his legacy, or both.

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About John Myers

John Myers is senior editor of KQED's new multimedia California Politics & Government Desk.  He has covered California politics for most of the past two decades -- serving previously as Sacramento bureau chief for KQED News and, most recently, as political editor for KXTV News10 (ABC) in Sacramento. He moderated the only gubernatorial debate of 2014, and was named one of the nation's top statehouse reporters by The Washington Post. Follow him on Twitter @johnmyers.
  • RUKidding

    Taxing business as the left always wants usually amounts to taxing ourselves. Virtually all business taxes are passed on to consumers and should be. Worse, since these amount to consumption taxes, they hit the less well off proportionately harder than the “rich”.

    In those cases in which businesses must pass these taxes on to consumers out of state, it makes them less competitive with companies outside the state, which, in turn, encourages them to move outside the state.

    California is in it’s current crisis for two simple reasons, the profligate spending of our socialists in Sacramento on their ideological ambitions and the equally profligate spending on the public employee unions that have a stranglehold on state politics.

    While splitting the state into a free half and a socialist half is the ONLY real solution for this bitterly divided state, I am perversely looking forward to the left and the rentseeking unions raising taxes, especially business taxes sufficiently that the company I work for moves outside the state and takes me with it.

    The exodus is already underway and I want to go with it while my house still has some value. Besides, I want to be out of this state when it must declare bankruptsy and some judge decides that he the state is too big to fail and that he must assess state property owners to pay off it’s debts.

  • Charlie Peters

    DCA/BAR & CARB pushing AB 2289 Eng to cut AB32 green collar jobs?

  • Stand United

    Republicans AND Democrats are driving California into the ground!

    The Lesser of Two Evils is Still Evil!

    The ONLY person running for Governor that has you best interest at heart is:


  • accountant

    Chelene Nightingale candidate for Governor 2010 California is not viable to be a serious contender for TAXPAYERS TOP JOB. SHE HAS ZERO EXPERIENCE in public affairs…has held zero positions that would give her even an inkling of how to run a budget nor understand one. She has filed for personal bankruptcy….has conspiracy and anti-government views….believes that 9-11 was a American Government plot…The aip did not choose her to run…she and a few followers gained access…by hostile measures. The AIP is running in direct opposition their OWN chairman MARKHAM ROBINSON…to oppose her fraud and to prevent her from trying to hijack the party. Documents are online of her bankruptcy…

  • Stateworker

    In response to RUKidding
    California is in it’s current crisis for two simple reasons, the profligate spending of our socialists in Sacramento on their ideological ambitions and the equally profligate spending on the public employee unions that have a stranglehold on state politics.

    1: Right and left ideological ambitions Prisons and welfare)are both over spent by the legislature.
    2: Public Employee Unions dont have a strangle hold. How many of us are getting less then 40 hour work weeks or 6 figure salaries?
    And before you think all of us are the tax the rich type. We want enough to do our jobs. After all with out us you would have no police, fire, teachers, nurses, people that try to keep the air safe to breath, the water safe to drink and have fun on).
    If the legislature/Gov would cut unfunded mandates, stop contracting out work at 8x pay, and quit using 1 time money for long term projects, we would not have this mess.

  • CA watchdog

    Google ‘CHELENE NIGHTINGALE MINUTEMEN” for the real facts about this person running for governor of CA. Chelene nightingale for governor needs to come clean about her notorious backgroun! To be informed is to have control!