Arnold Schwarzenegger

Your blogger had to spend yesterday afternoon and evening on some personal business. He woke up this morning to find himself almost alone among politicians and commentators in arguing that Gov. Schwarzenegger's May revise sets the stage for a breakneck push for budget reform. (Whether that reform is a good idea is another story. His proposal's focus on the spending side makes it incomplete).

But commentators have dismissed much of what he's proposed as gimmicks or borrowing. At the Sacramento Bee, Dan Weintraub writes that Schwarzenegger has surrendered in his attempts to balance the budget. His full funding of the Prop 98 education guarantee -- an essential strategic move if he wants to maintain enough popularity to convince voters to adopt any kind of budget reform -- is largely dismissed, and the resulting proposed cuts to health and human services programs are emphasized in responses from legislators (via Sac Bee). Others argue that the budget is not fiscally responsible -- true, but it's politically the right approach if you believe, as the governor appears to believe, that the only way for California to get a handle on its persistent budget problems is major structural reform of the process itself.

This is also posted at Fox and Hounds Daily, a new news and commentary site focusing on California and business.

There is no longer any doubt about one thing in California politics: Gov. Schwarzenegger is willing to die on the cross of budget reform.

My conversations with people inside and outside the administration, and a review of news leaks in advance of the governor's revised budget proposal this afternoon, make it clear that he is doubling down on budget reform. For a man with a reputation for twisting with political winds, he is doing the opposite here, trying again to pursue reforms as he did in 2004 and 2005. He is so determined to get voters to adopt his budget reform (a spending-side proposal based on a rainy day fund and more power for governors to make mid-year cuts) that he is risking what's left of his governorship.

One piece of this approach is undeniable smart, As the Sacramento Bee reports, he's pulled back from his proposal to include education in spending cuts and is now proposing to meet the Prop 98 minimum on education. His cuts were fiscally responsible -- but they were politically poisonous to his project of budget reform. By dropping the unpopular cuts, he is making a strategic move that signals his top priority--budget reform or bust.

In California, tomorrow is the day for the May revise, when the governor offers a revision of his January budget. It's the launch of the budget season in most years. Leaks of the governor's proposals typically drip out in the days before. The LA Times is reporting on its web site that Schwarzenegger is going to take the delicate question of revenues to voters. He wants to give them the choice, in a November ballot measure: borrow against future lottery revenues, or see sales taxes raised to cover the budget deficit.

This piece in the Contra Costa Times asks whether there's "donor fatigue" as Gov. Schwarzenegger raises money for his redistricting initiative and perhaps, some sort of budget reform ballot measure (or measures) in November. It's a fair question. The problem may not be fatigue but donors' clear-eyed assessment of the political chances of redistricting and budget reform. Redistricting has a perfect record at the ballot over the last 15 years -- it's lost every time -- and budget reform proposals of all stripes (notably Prop. 56 in 2004--backed by Democrats and unions -- and Prop. 76 -- backed by Schwarzenegger and Republicans --  in 2005) have gone down to defeat. What is the point of spending good money on reform proposals that will go down to defeat, no matter their merits?

Californians, prepare yourselves. At this rate, you may get to vote on the entire budget. Gov. Schwarzenegger said today that his plan to lease out the lottery to raise funds to balance the budget could be referred to the voters for their approval. "I think that we have to include those kinds of decisions, we have to include the people," he said, noting that a change to Prop 98, the state's constitutional guarantee on education spending, would require voter approval anyway. Schwarzenegger also has been talkiing up constitutional budget reform that would require voter approval. Civic-minded Californians should keep one eye on budget talks during their summer vacations, since it looks like they may have to bless the results.

Capitol Weekly has a good piece on the Schwarzenegger redistricting initiative as a test of a new non-profit reform group, California Forward, led by former Congressman and Clinton Chief of Staff Leon Panetta. Panetta is one of the best strategic thinkers in the state, but fighting dysfunction in the Clinton White House is nothing compared to fighting dysfunction in California state government.

Here are a couple of must-reads from today's California papers. One is this Union Tribune story about a San Diego school that may have to lay off nearly all its teachers. (With education cuts loike this under discussion, it's going to be nearly impossible to get attention for important matters of reform). The other is from the LA Times' Evan Halper and examines a tax that many folks don't know about -- on kitchen oil used to fuel cars. One violator: the governor of California, and his converted Hummer.

In California, Thomas Elias may be the most important voice you've never heard of. Elias, an independent journalist whose column in appears mostly in smaller papers over the state, was arguably the first person to circulate the notion of a recall of then Gov. Gray Davis just after his re-election in 2002. (Other folks took it and ran from there).

Elias reports and thinks deeply, and gets into the guts of the issue. Now, almost alone, he offers a column not about the politics of Gov. Schwarzeneggger and his reform efforts (the preoccupation of Sacramento) but about the substance of the governor's proposals. Today, Elias looks at budget reform, and he raises important points. His main problem is that Schwarzenegger's budget plans, which have only been loosely outlined, would give far too much power to the governor's office. Governors could make mid-year cuts, set aside money for reserves and in some cases, suspend laws all by themselves. Elias sees this as dictatorship. Having sat through legislative budget hearings, your blogger wonders if a little bit of dictatorship in making budget adjustments might not be such a bad idea. Whatever the case, Elias deserves credit for trying to spark a debate on the nuts and bolts of this. California voters, after all, may have vote on a "reform" plan of some kind this November--six months away.

In a radio interview with my former colleague from the LA Times, Patt Morrison, Gov. Schwarzenegger, who has used direct democracy more than any politician in American history, says the initiative process is being abused and it's time for both parties to look at how it should be changed. The quote is below, and full transcript is here.

Last month, I wrote in the Los Angeles Times about how Gov. Schwarzenegger's pursuit of education cuts as part of his budget proposal was undermining his efforts to achieve redistricting and budget reforms. A new poll from the Public Policy Institute of California offers more evidence. His stance on education is so unpopular -- only a quarter of Californians approve of his handling of education -- that it's dragging down his overall popularity (to 41 percent in the poll). Schwarzenegger is leading the way in offering reforms, but if he doesn't drop the education cuts -- and he has the opportunity to do just that with his revised budget proposal later this month, his low popularity will poison those reform ideas and end his last chance to make major changes in how the state governs itself.