Schwarzenegger

A new poll from the Public Policy Institute of California finds that the two competing eminent domain measures, Propositions 98 (backed by conservatives, anti-tax groups) and Prop 99 (backed by cities), have less than 50 percent support. Less than two weeks before an election, that often spells doom for both measures. As such, this would be a victory for the backers of Prop 99, who qualified the measure in order to beat Prop. 98. Qualifying your own measure to defeat one you don't like is a time-tested tactic. In most cases, both initiatives go down. Each initiaitve purports to restrict the ability of governments to take property for private purposes, though Prop 98's protections are stronger--so strong the initiative also would eliminate rent control.

In other findings, the poll shows that Gov. Schwarzenegger's lottery plan is unpopular with the public--and his back-up proposal, a one-cent sales tax increase, has support from a narrow majority.

Below is the transcript, courtesy of Gov. Schwarzenegger's office, of an exchange he had with a questioner during a press conference Tuesday at the Environmental Defense Fund in San Francisco. The press event was about the environment and energy, but press questions went in a different direction. Schwarzenegger explains his public position on the anti-gay marriage initiative that appears headed to the November ballot. This shows the straddle the governor is doing on the issue, and offers a smart argument that the campaign against the initiative (that is, the campaign to preserve the newly elaborated right for gay couples to marry) might adopt. He's essentially saying that even if your own personal position is against gay marriage, you may not want to enshrine that in the state constitution. And that people may need to consider that there's an equal protection problem in denying the right to marry to gay couples. Bottom line: it's more coercive to ban gay marriage than to permit it, even if you don't like it. I suspect that may just be a winning political argument in California. It's an adult, nuanced position, and a responsible way for someone who wants to represent all the people to talk about it.

GOVERNOR:                                                 Yes?

Updated: There was strong push back yesterday from the administration on the report, which mirrors some of the commentariat's complaints about Schwarzenegger's budget. David Crane, the gubernatorial aide who is handling the lottery and budget reform plans, insists that the lottery plan is not a loan, but a sale, and that every penny will go to the rainy-day fund at the heart of the budget reform. 

Here's original post:  

Gov. Schwarzenegger's plan to securitize the state lottery in order to fund a rainy day fund and balance the budget in the coming fiscal year is flawed, according to a report released today by the Legislative Analyst's Office, which advises the state legislature. Specifically, the bond would create the "strong likelihood that distributions to public education from the lottery would fall well short of their current levels—perhaps by $5 billion over the next 12 years combined." Schwarzenegger needs legislators to put his proposal on the ballot -- and needs voters to sign off on it. With the LAO saying education could be hurt, this proposal is likely going nowhere.

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.