The Myths, Rhetoric, and Reality in Schwarzenegger’s State of the State Speech This Year

The budget passed by the Democratic legislature had a larger reserve than that proposed by the Governor. The Governor has a blue pencil and can reduce or eliminate any line item in the budget after it is passed. The buck stops with him.

Yet to read the Governor’s speech, you would think it was someone else other than him that has a spending problem. It’s “Sacramento” that overspends. It’s as if he didn’t propose the state budget that he did last year--and as if he wasn’t the one who signed it after exercising to his satisfaction his blue pencil authority if there is a spending problem that someone else has.

And it’s as if he didn’t create a $5 billion or more revenue problem each and every year by lowering the vehicle tax that he did on the first day he took office.

Now if he can’t reduce some items in the budget because they are mandated by statute, state constitutional provisions, or ballot box budgeting through initiative propositions, you’d think he would have responded to a plea from Don Perata, the President pro Tem of the state Senate last year when he was sent a letter to look at these structural problems. Perata not only sent him this letter in August but he also talked about this last May when the budget revision was issued by the Governor. It’s as if this never took place.

I’m glad I wasn’t the only one who perplexed by the juxtaposition of contradictory thought patterns in the speech delivered by the Governor on spending and state needs in one breath and cuts in the other. This is part of an excellent editorial in today’s Bee entitled “Schwarzenegger outlines eclectic state agenda”:

“One minute this Republican governor was praising the public works programs of Franklin Delano Roosevelt. The next he was calling for more partnerships with private industry to build public infrastructure – the seeming antithesis of the New Deal.

“One minute he was acknowledging the harsh consequences of spending cuts that involve "not just dollars, but people." The next he was calling for across-the-board spending cuts and refusing to raise taxes.”

The Bee then stated: “Incongruity often seems to be Schwarzenegger's middle name.”

Today’s LA Times, in the “’Wolf is back’ at state budget door,” a news article, had these similar observations:

“The speech lacked the sweep and ambition of the Republican governor's address a year ago…

“Today, by contrast, Schwarzenegger faces a deficit driven partly by spending increases and borrowing that he oversaw, despite his election on promises to fix California's chronic fiscal problems once and for all….

“Lawmakers applauded nine times during the 25-minute address, but the mood in the room was generally tepid….

“Schwarzenegger offered little new Tuesday, instead focusing on ideas he has been talking about, in some cases, for several years…

“The governor had previously designated 2008 as the "year of education," and a commission he appointed recommended $6.1 billion in new spending in a draft report completed last year. While the governor spoke about improving education, he said there was not funding for it now and embraced few of the commission's suggestions in his speech….

“Schwarzenegger, without providing details, acknowledged that he "will be submitting a budget that is difficult."

I caught up with Don Perata after the speech and asked if he ever get a response to the letter about a budget reform panel, and this is what he said:

“He’s never responded in writing other than saying it’s a really good idea. But this week, he and I have had some discussions about how it’s time past due to work on some structural stuff. Unfortunately, the immediate need of making cuts or balancing the budget will dominate this year, but I do believe that simultaneously we have to look at restructuring. Otherwise, we are going to be right back here again.”

I then asked if he had seen any language from the Governor’s office on what they want to do in the Constitutional Amendment they want the legislature to pass and put to the voters, and this was his response:

“We got this afternoon, not the language, but a three page, two sided, dense summary of the Constitutional Amendment—the same one he handed to the press. Rule one is that if it’s longer than a page to explain to people, you’re not going to get their attention. But what disturbs me more than anything; he tried that same approach with the legislature 3 years ago with the legislature. It failed. He then with the voters 2 years ago, it failed. So, why come back with the same thing or just a variation on the same tune? I’m just perplexed.

Perata continued: “I was generally disappointed tonight. I was ready for a Churchill like speech about blood, sweat, and tears—the going gets tough, the tough get going. And basically what he said tonight was—we ought to rethink our California being a great golden dream. Maybe being excellent in mediocrity is not so bad after all. I don’t buy that. And I don’t think California’s going to buy it either.

“We are not going to be cutting programs by 10% or any other amount by a simple majority. Because then it becomes Democrats doing the dirty work—because what Republicans enjoy doing is cutting things that they want to cut—and not anything else—and then reap the benefits. They don’t want to cut education but they don’t want to have their school districts impacted either. So, it will be two-thirds or it won’t be anything.

“When you talk about 10% cuts across the board, it’s like a blind man with a chain saw.”

Senator Darrell Steinberg was charitable towards the Governor and had this to say about the speech:

“What I appreciate about the Governor was his infectious optimism. I think that’s the right style. I also appreciated that he raised the plight of the high school dropouts because that is a huge moral, civil rights, and economic issue for our state.

“Having said that, here’s my problem with his speech tonight—the content of his speech: The governor, like the state of California is on the horns of a dilemma. On the one hand, the Governor says we have a spending problem. On the other hand, he says we need to be prepared to invest more to reform public education and to issue billions of dollars worth of debt to fund water and other infrastructure.

“The Governor is asking the wrong question. When you ask, “Do we have a revenue or a spending problem?” you come to the same answer every time. Depending on your ideology or your political party, you answer one way or the other. The question must be rephrased. The question is “What do we need in terms of quality public services? And how do we pay for what we say we want?”

“I fear if the question is whether we have a spending or a revenue problem, in that subjective of a way, we are going to end up with the same result we’ve ended up with every year—a messy fight without any real progress towards solving the real problem.

“Cuts are going to happen. There’s no question about it. I am wary about the across the board approach because it takes away from the legislature one of the most fundamental obligations—and the Governor for that matter—and that is, to prioritize, and to make choices. I don’t want to see big cuts to public education. I don’t want to see class size reduction ended in grades 1 to 3. I’d like to see us find a way to make advances in health care. And so, I think we have to be deliberate. And I think we need to make some choices.

“And finally, this point. There is a big gulf between the rhetoric around cuts and the reality. You can’t cut your way out of this exclusively. Republicans and Democrats don’t want to see cuts to their children’s public education in their districts and their schools. They don’t want to see delays in their transportation projects or in their water projects. I just hope the Governor uses his immense political capital to work with us to reframe the question in California—not whether we have a spending problem, but what do we insist upon and need for the quality of life we expect in California, and what’s the best ongoing way to pay for those services.

“I respect and like the Governor. Again, I think his great strength is his infectious optimism. I think he has tended to want to focus on the bigger picture issues—to his credit—like global warming and health care. But we won’t be able to achieve the California dream if we don’t come up with a better way of budgeting for important public services in California. I’d like him and us to get beyond of spending problem versus revenue problem and actually look at what we need and how we go about paying for it.

“It is not even a new budget process. It is framing the question and the debate. Look at public education and let’s have a discussion of what’s not working and how to reprioritize those funds. Let’s look at every other area of state government and let’s analyze what works and what doesn’t work—as opposed to cutting across the board and expecting that that which is working and which is of genuine help to people is not going to suffer.

“When push comes to shove, I’m not sure that Republicans want to cut as deeply as they say, rhetorically. Because again, cuts to education mean cuts to their districts. Cuts to transportation mean cuts to their districts. Cuts in health and human services are going to impact their districts in the end as well because we all bear the costs of overuse of overuse of emergency rooms and kids ending up with the social welfare system and so, again, it’s fine rhetoric and we’re going to have to tighten our belts, but it needs to be more of a balance, frankly.”

In the motif of the State of the State speech where the Governor talked of “Professor Schwarzenegger” explaining the economics of the budget, this is what Assemblymember John Laird, who chaired the budget committee said: “Professor Laird would teach the class differently.”

I asked “And how would you teach it differently?” and Laird continued:

“Oh, I’d tell the truth. [Laughter]

“I’d be direct about how we got here. But really, $8 billion of the problem is that the vehicle license fee was lowered but we still pay the cities and counties. $3 billion is our share of the debt funds this year is for not putting ourselves on a pay as you go basis at that time. So, there’s this big deal about a spending problem and $8 billion comes from just those two things, and an unwillingness to have a real conversation with the people of California about the fact that they’ve been getting a lot more than they have been paying for for a number of years.

“It’s tough because we have an open process and last year the Republicans didn’t want to own anything that they really wanted. They wanted it to be done in secret. I think there’s no way that we can do that this year. That if they really want cuts that will lead to the closures of universities and cutting K-12 education, they’ve got to want that in public. This year if they want cuts, they’ve got to tell the people they want them.”

We’ll have more reaction to the speech and the budget. These issues are not going away and need to be discussed and solved, to the extent our political institutions will allow.