Schwarzenegger

During the Prop A campaign in Missouri, voters were told that the measure, which loosened restrictions on gambling, would produce money for a "tamper proof" education fund that couldn't be tapped for any spending other than schools. But now, with the state budget a mess and the economy heading south, Missouri lawmakers are preparing to do some tampering.

Missouri is hardly alone in this. Dozens of states are breaking into voter-approved funds. In California, going after funding sources the voters set aside for other purposes has become the state sport. Gov. Schwarzenegger, who rose to power by championing a ballot initiative to set aside for after-school programs, has joined the bandwagon, calling for raids on voter-approved funds for mental health and children's program in his budget proposal this week.

The holiday surprise in California this year was that Gov. Schwarzenegger didn't wait to the usual date -- often January 9 or 10 -- to release his budget proposal for the 2009-10 fiscal year. Instead, the proposal was released on Dec. 31. And in another departure from protocol, the governor wasn't there to do the releasing. He was at his vacation home in Idaho with his family. Finance director Mike Genest handled the chore.

The release seems to be a way to accomplish two political goals: 1) to show urgency (we're releasing the budget early) while 2) burying the news of a horrible budget proposal that includes big spending cuts, borrowing and tax increases, many of which represent a reversal from previous Schwarzenegger positions. Shaking things up is a good thing, but I'm not sure if this early budget release accomplished much. The proposal itself is unlikely to spark fast action by a dysfunctional legislature. But it's not clear if there's any force in the universe that can force consensus in the California legislature.

California's governor initially indicated he would veto an $18 billion package of cuts and tax increases that had been passed last week by the Democratic legislature on majority vote. But yesterday, he said he had made progress in negotiations with Democrats on the package. Schwarzenegger simply wants a rollback of some laws that he thinks restrain economic growth.

This package, put together by legislative Democrats, is significant not merely as a response to the ongoing state buget crisis. It's a precedent setter because it involves passing a tax increase without the two-thirds vote required under the California constitution. Republicans are crying foul and threatening to challenge the package in court. If Schwarzenegger agrees to sign the legislation after these current talks, you can expect a lawsuit.

That litigation may prove crucial not only to preventing the state from running out of cash in two months. Depending on how the courts rule, it may open up a new era in California's budget politics, providing a crucial loophole around the two-thirds rule on taxes (which was part of Prop 13). The state constitution also requires a two-thirds vote for a budget; that law has been in place since the 1930s.

The new Democratic leader in the state senate, Darrell Steinberg, appears to have concluded -- correctly, it says here -- that California's legislative Republicans will never back any tax hike, no matter the current budget crisis. Republicans had thought they could block a budget solution because of the state's requirement of a two-thirds vote to pass a budget or raise taxes. But now Steinberg and Assembly Speaker Karen Bass have constructed a proposal that mixes revenue cuts and tax hikes and is designed to avoid the two-thirds rule. The result is highly technical and convoluted. One piece involves moving around tax revenues between state and local pots, another involves reducing some taxes while establishing or raising others. (Details are here, via the Sacramento Bee).  but it should pass his chamber on a party-line vote. Here's hoping the Assembly then takes it up and sends it to the governor's desk.

At a press conference now concluding in downtown LA, Gov. Schwarzenegger said the federal government should not bail out his state -- at least until the state itself adopts a more fiscally responsible budget. In doing so, he appears to have boxed himself in. With Democrats in the legislature resisting deeper spending cuts and Republicans refusing to raise taxes, a federal bailout was seen as a way to address, at least in the short term, the state's persistent and growing budget shortfall.

Schwarzenegger called the press conference to announce his declaration of a state fiscal emergency. This provision of the constitution, enacted by voters as part of Prop 58 in 2004, gives the legislature 45 days to act to bring the budget back into balance. The provision is not seen as having the teeth necessary to force the legislature to fill the budget shortfall.

Gov. Schwarzenegger, appearing Sunday on ABC's This Week, indicated he was inclined to protect the marriages of gay couples who legally tied the knot this year. These marriages could be at risk because of the passage of Prop 8. Schwarzenegger offers the caveat that such an order must be legal, and that he must first confer with Attorney General Jerry Brown, who has said he will defend Prop 8 while also protecting the existing marriages. Here's the exchange with interviewer George Stephanopolous.

STEPHANOPOULOS: In the meantime, some legal experts have suggested that you should, if you believe that, issue an edict, a ruling, that says that the marriages that have already taken place in California are absolutely legal. Will you do that?

SCHWARZENEGGER: Well, I have to get together with Jerry Brown, our attorney general, and see what the legal opinion is, because he's my lawyer, basically. And so, we always do those things together.

STEPHANOPOULOS: But you're inclined to do it?

SCHWARZENEGGER: It's a conversation that I can have with him about the -- if that's the legal way to go.

Gov. Schwarzenegger just proposed a special session to deal with a seriously out of control budget. To fill an $11.2 billion gap, he proposes taking some money from a reserve fund, and then cutting spending by more than $4 billion and raising taxes by more than $4 billion. The news is in the taxes. There's a temporary sales tax hike similar to what he proposed earlier in the year. But he also would establish a severance, or oil, tax in California on resources taken out of the ground. Severance taxes are common in the rest of the country, but not in California. Oil men allied themselves with Progressive reformers (both sides hated the railroad) and thus avoided the new taxes and regulations of that time. And oil companies have fought off severance tax proposals ever since.

California Gov. Arnold Schwarzenegger is in Ohio today, campaigning for and with John McCain. People have been asking me: why? It's a good question. The governor has nice things to say about Obama (even suggesting he might work for a President Obama someday), disagrees with McCain and the national Republican party on issues, and likes to associate himself with winners, not losers.

The answer boils down to two words: habit and loyalty. The governor of California is a creature of habit. In 1988 and 2004, Schwarzenegger campaigned in Columbus, Ohio -- where he has business interests, including a share in a suburban shopping mall and an annual fitness convention and bodybuilding tournament known as The Arnold -- on the Friday before election day. This year, he goes again to central Ohio the Friday before election.

But the other motivating factor is loyalty. Schwarzenegger doesn't get much credit for being loyal; he's generally thought of by people in the political sphere as more than a little disloyal. But in his personal relationships, he's remarkably loyal. His friends today were his friends 20 years ago. And McCain has been very loyal to him. The weekend before the special election in 2005 ,when it was clear to everyone (except perhaps the hyper-optimistic Schwarzenegger) that his initiatives were going to lose, McCain flew to California and rode on Schwarzenegger's campaign bus through the Inland Empire. McCain backed Schwarzenegger when the governor was in political trouble. Today, Arnold returns the favor.

The governor has now taken positions on 10 of the 12 measures on the ballot. (He's neutral on Propositions 6 and 9, both of which have to do with crime). He's no on Prop 8, the same-sex marriage ban, and yes on Prop 4, which would require that a parent or guardian be notified before a minor has an abortion. The full list here via the Sacramento Bee.

Variety, yes Variety, asks why Gov. Schwarzenegger hasn't cut an ad against Prop 8. It's an interesting question, not clearly answered by the story. The governor is unpopular, so maybe the No on 8 campaign has concluded that Arnold won't help. Schwarzenegger has largely avoided taking on divisive social issues, so maybe the reticence is his.