| Sunday, February 29, 2004
Sorry, governor, but 57 and 58 don't
Thanks to Gov. Arnold Schwarzenegger's
persuasive powers, recent polls show a dramatic turnaround
in the percentage of California voters backing the governor's
pet initiatives, Propositions 57 and 58. Prop. 57, which would
float a $15 billion bond to pay for the deficits created under
the Davis administration, and Prop. 58, which requires the
state to enact a balanced budget, are now likely to pass.
Yet there's no way I can bring myself
to vote for either one of them. Admittedly, it's a close call.
Some of the political people I trust the most are supporting
both measures. After all, the new governor inherited a budget
mess from the past administration, and there's no way he can
realistically cut billions of dollars from one year's budget
to balance the books, they say. We need to hold our noses,
cover an already-existing debt, and then keep from spending
our way into this mess again.
The problem, as I see it, is that there's
no indication the state won't simply go down the spending
route again. Under tight time constraints to get the measures
on the ballot, and eager to rack up bipartisan successes,
Gov. Schwarzenegger agreed to a deal with Democratic legislators
that is at the heart of the problem.
The initial Republican idea was sound:
Accept a bond in exchange for a firm spending cap to keep
a spendthrift Democratic-controlled Legislature from running
up debt again. Without a firm cap, conservatives argued, the
state government will act like a credit-card junkie who continues
to run up bills this year even after getting the home-equity
loan to pay off the mountain of debt run up in the past year.
Something has to stop the spending spree.
California has a large structural deficit, in which the state
consistently spends about $8 billion more than it takes in
tax revenues. The Democrats have an "easy" solution: just
keep raising taxes and feeding the beast. That's why they
opposed a GOP proposal that would have capped state growth
to percentage increases in inflation and population. It was
a real spending cap.
Prop. 58 is their alternative. As the
Orange County Taxpayers Association explains, "The Constitution
requires the governor to submit a balanced budget, but the
Legislature is not required to adopt it. Proposition 58 would
strengthen the law slightly by requiring that the state enact
a balanced budget. It would not preclude masking deficits
with tricks that have gotten us into the present mess: dishonestly
overestimating revenue, short-term borrowing, and stealing
money from other programs to prop up the General Fund."
So, Prop. 58 would offer a slight improvement
over the current situation, but it would not cap spending.
Presumably, under the Schwarzenegger administration, spending
would be controlled because a responsible governor wields
a veto pen.
But what happens if, say, Treasurer Phil
Angelides - who has traversed the state calling for dramatic
tax increases - becomes gov- ernor? Or lefty Bill Lockyer?
Then we're stuck with an enormous bond and the whole spending
spree goes on and on.
There's no one I trust more on fiscal
matters than Orange County Treasurer John Moorlach. He's the
guy who predicted the 1994 O.C. bankruptcy. And he
is one of the few people I know of statewide predicting the
fiscal crash that's coming as a result of the outrageously
generous "3 percent at 50" public-safety union retirement
benefits that allow law enforcement officials to retire at
age 50 with 90 percent of their pay depending on years of
service. Officials ignore him now - at their own peril, I
might add - as Richmond and San Diego face dire economic circumstances
related to retirement benefits.
So when Moorlach told me he supports
57 and 58, I listened closely. It took the state five years
or so to build up the deficit mess, so it will have to take
a few years to get us out of it, he argues. The initiatives
buy time, and let the state dig out of a hole.
That's a persuasive argument, but I remain
unconvinced that officials have the intestinal fortitude to
stop the spending spree and keep themselves from spending
us into a similar mess. I doubt that 58 will stop spending
in a significant way.
Had the governor held firm and negotiated
a real spending cap, I would support the bond. No question.
But without a spending cap, no dice. The other main argument
to support the two initiatives is a political one. Supporters
claim, convincingly, that the governor will lose much political
clout if his two initiatives fail. If he fails, then Democrats
will reassert their power and will be in a stronger position
to hold up other elements of the Schwarzenegger agenda, such
as workers compensation reform.
That's true, but the governor's political
problems don't concern me. I'm still a bit annoyed that he
has refused to expend any political capital opposing Proposition
56, which would eliminate the two-thirds legislative vote
requirement for budgets and tax increases, and would thereby
give the Legislature a virtual blank check to increase taxes
at will. Doesn't the governor realize that if Prop. 56 passes,
all his good efforts to fix the budget mess could be undone
The governor promises "Armageddon" cuts
if the bond fails. Maybe I'm being unfair, but my response
is, bring 'em on. That's what's really needed to get this
state back to fiscal health, anyway. I'm willing to roll the
dice and see what happens if 57 and 58 fail.
RINOS Part II
Last week, I described efforts by moderate-to-liberal
O.C. Republicans to win the primary race for the Assembly.
I didn't mention the state Senate. The three safe Republican
seats in Orange County are now held by conservatives: Dick
Ackerman, R-Irvine, Bill Morrow, R-Oceanside, and Ross Johnson,
Because of term limits, Johnson is leaving
his seat, and one of the two candidates running to replace
him has a spotty record on fiscal and union-related issues.
The race pits Assemblyman John Campbell,
R-Irvine, against termed-out Assemblyman Ken Maddox for the
heavily coastal Senate district. Campbell has been a reliably
conservative vote on every issue, economic and social. Not
only that, but he has been a leader - a mover and shaker with
significant influence in the Capitol, especially on budget
Maddox is a solid social conservative
and an extremely personable fellow, which explains some of
his support among conservatives.
But at some point Maddox made a conscious
decision to support a Big Labor agenda, which means
that in a Legislature where Democrats have close to a supermajority,
he could provide a key vote for expanding public-sector pensions
and union interests.
Maddox's campaign is heavily funded by
unions and tribal interests. On the economic side, Maddox
has been one of the worst Republican votes.
He reminds me of the pro-life Democrats
I knew back east. Maddox supporters present him as a blue-collar
conservative in contrast to Campbell as a white-collar conservative.
The real distinction, though, is Maddox isn't particularly
conservative on fiscal issues, whereas Campbell is solid all
the way around.
Maddox's votes are no aberrations. Maddox
wrote a letter to the Board of Supervisors supporting the
Project Labor Agreement that granted a near-monopoly of county
construction contracts to union workers.
In the Assembly, Maddox has supported
bills that require union wages be paid on all economic development
projects; impose the costly and rigid eight-hour workday on
employers; increase workers' comp requirements for temporary
labor agencies; give Native Americans veto power over many
private developments on non-reservation land near reservations;
make it easier for employees to sue their employers; provide
law enforcement and firefighters up to two years of tax-free
full pay for disability; and require additional employee categories
to join a union or pay union fees.
One Campbell brochure includes 28 Maddox
votes that advance liberal union, trial lawyer and Indian
interests, which is a partial list over a two-year period.
It's sad to say, but Maddox clearly belongs on the list of
Republicans In Name Only with last week's cast of characters.
Campbell tacks right on the social issues, the economic issues
and - despite what Maddox claims - on immigration also. Which
leaves little reason for conservatives to support Maddox.
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