Schwarzenegger Officially Makes Public His Compromise Proposal on California Budget—Some Call It the “August Revise”

Schwarzenegger said that the legislature’s failure to adopt a budget by now has been “shameful.” He also criticized John Chiang, California’s independently elected Controller, for failing to be a “team player” and not implementing his executive order to reduced state workers’ pay to the federal minimum wage. As far as I can tell, the Governor did not consult with the State Controller before issuing his order. His team metaphor seems to be one of others joining his team and following his conclusions as to what is necessary. But at least today, he has articulated his ideas and his staff is laying out the details. That is progress.

In answer to questions about whether he has any Democrats or Republicans supporting it, he said they were still in their ideological corners. The image he was seeking to convey was clearly one of being in the center whereas others are at the extremes. He used another metaphor, that of both parties pulling on a rubber band and trying to stretch it as much as possible. Whether he is in the center of the ring with others in their corners, or whether he is in his own third corner, at least he is in the ring and making this public.

It is hard to really tell what has gone on behind closed doors and in confidential discussions. But clearly the Governor’s efforts to put the onus on legislators rather than taking any responsibility himself for failed negotiations and the months they have dragged on was taken with exception by Democratic legislators.

Democratic Assembly Speaker Karen Bass issued a short statement, saying: “This proposal is what the governor should have proposed in May, not late August. Since January, Democrats have said we need a balanced approach and are supporting just that, including more than $4.3 billion in cuts and tough budget reform. I appreciate that the governor now believes that we need more revenues, and we’ll keep working with him and the other legislative leaders to craft a balanced budget.”

In other words, why didn’t the Governor get here several months ago.

Democratic President pro Tem Don Perata talked to reporters and had a lot to say, saw much of the Governor’s statement as more rhetoric on top of the ideological divide. He said we now have both:

“I don't think having a press conference constitutes negotiating the budget. I think he's also worried about what's going on in the Assembly. Right now there are a lot of rumors going around that they want to borrow from Prop 98, they want to borrow from schools...I mean he doesn't want any part of that, I know. He said he doesn't want to borrow from Prop 1A, cities and counties; he sure doesn't want to borrow from schools, so he said no borrowing. They're trying to put a budget together with borrowing, so, he may have been trying to be preemptive. But a press conference doesn't persuade anybody."

When asked about the Governor lambasting legislative leaders for not coming out of their ideological corners, the Governor’s words were like water coming off a duck’s back:

"I guess I have become used to what he says. I didn't really see that he was lambasting me. You know I've heard him say everybody's got to come to the middle, and I can do the rubber band trick myself, you know I've heard all that before. And, you know, that's just more rhetoric, so, we have ideology and we have rhetoric and I like to think of myself as a pragmatic politician. The idea is to compromise to get something done. We have offered a compromise, we have offered a way to fill the $7 billion hole he has in his budget on a permanent ongoing basis so that next year and the year after California isn't in this place again. He gets to have his rainy day fund increase because it wasn't adequate the last time he proposed it. We said that's fine but we're not going to run around and talk about a head fake on taxes to give him a little bit for a few years and then he'll drop it a little bit later. That doesn't do anything but put [future governors] in very difficult positions. The governor's going to have a bad enough time running the state in the next two years under the best of circumstances, this will simply make it a disaster."

As to the new $2 billion in cuts:

"Those aren't new. We have whittled away some of the differences between his point of view and ours. We made compromises, so most of what we thought we could do we've done. There's no sense in squeezing us any harder."

"It's going to get ugly. And if it's going to get ugly at least people will know why it's getting ugly and when we put our budget up it'll be clear what we stand for and why we're holding out."

Schwarzenegger vigorously denied that the budget was “a get out of town” proposal, “kicking the can down the road,” or one that leaves to his successor and others in the future bigger problems. He said that it would leave us with a mechanism that works rather than our current “broken budget system.”

If his plan goes through, however, I wonder how it would work with cuts in the sales tax after 3 years to below where they are now, and how that doesn’t saddle the next Governor with less revenues in addition the vehicle license fee (VLF) that he cut on his first day in office with the ongoing expenses we have in reimbursing local governments for the loss of the VLF and additional monies needed for repayment of debt and bonds. Seems to me that future governors are going to have some problems.

The devil is in the details here.

Schwarzenegger also said that previous attempts he made to fix the system with Props 57 and 58 in 2004 were “too soft” and had not worked. At the time, he said in the ballot statement in support of them that they would solve the problem. He called a special election in 2005 seeking stronger and additional powers for the governor, which the voters rejected. Giving the Governor unilateral powers, if that is what is being proposed here, to make mid-year cuts is a major change in the checks and balances in our constitution, and needs to be considered carefully—notwithstanding the need to get this year’s impasse resolved.

He answered 4 questions from reporters and then tried to exit, but when a reporter shouted another, about whether without a budget he would be attending the Republican convention, where the official program lists him as a speaker, he returned to the podium, like a performer coming back for a curtain call demanded by the fans. He said he would not, in fact, be attending the Republican Convention if there is not a budget and that he had told John McCain about this earlier.

Califonria Progress reporter and intern Kyle Samia contributed to this article.