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| Office of the Chancellor / Public Affairs |
Tuesday, January 27, 2004
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Sacramento Bee 1-27-04 Daniel Weintraub: Bipartisanship is great, but pitch is misleading |
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| It used to be that partisan gridlock was a political sin to be avoided or, when practiced, denied. Now it seems that getting along can get you into trouble too. Such is the level of cynicism in politics today that one of the California's highest-ranking Democrats finds his motives under suspicion for cooperating too closely with the state's new Republican governor. Why else -- other than personal political advantage -- would Controller Steve Westly cross party lines to help Gov. Arnold Schwarzenegger pass Propositions 57 and 58 on the March 2 ballot, the first two pieces of the governor's fiscal recovery plan? According to Westly, his reason is the same one that prompted the Legislature to give bipartisan support to Schwarzenegger's package: It beats the alternative. "If this does not pass, the hurt to education, health care, public safety is huge," Westly told me last week between appearances with Schwarzenegger to promote the package. "The Democratic Party will soon come to understand this. Whatever they think of Gov. Schwarzenegger, whatever they think of the budget, these two initiatives need to pass." Schwarzenegger's $15 billion bond and a companion measure to require the state to build a new rainy day reserve are designed to prevent further fiscal hemorrhaging and begin what will likely be a three-year process to bring the state's books back into balance. The bond would retire the state's accumulated deficit, replacing a $10.7 billion measure the Legislature and Gov. Gray Davis approved last summer. That measure is under a legal cloud because the state constitution prohibits borrowing more than $300,000 without a vote of the people. The new bond, if approved by the voters, would fix that problem. If the voters reject the Schwarzenegger bond and the courts strike down the Davis bond, the state's finances will be in disarray, to say the least. California's government would be facing an accumulated debt of at least $12 billion and a new, projected gap of $15 billion between revenues and spending next year. When the leftover Davis debt comes due in June, the state would be out of cash and forced to borrow short-term again, at great expense if it could do so at all. It's possible that the state would have to rely on debt insurance it purchased last year to avoid defaulting on its June obligations, which would essentially mean turning California's finances over to a consortium of banks. A tax increase would be all but inevitable, and even with higher taxes, deep cuts would also be necessary. But even if the bond measure passes March 2, the state will not be home free. And this is where Schwarzenegger and Westly are taking liberties in their pitch in favor of the two propositions. In their zeal to sell the two measures, they are oversimplifying to the point of being misleading. "The California Balanced Budget Package does exactly what it says -- it gets the budget balanced and keeps it balanced," Westly was quoted as saying in a campaign press release last week. Yet it does no such thing. The bond simply refinances the existing debt and provides maybe $3 billion more in borrowed money to help close the gap in the next fiscal year, which begins July 1. Schwarzenegger's budget proposes another $5 billion or so in cuts to make further progress. But even if the voters cooperate and the Legislature does everything Schwarznegger has asked, it appears that the ongoing gap between spending and revenues will still be somewhere between $3 billion and $6 billion a year from now. And while Proposition 58, the companion measure, would eventually require the state to build a reserve of 5 percent of the general fund, its balanced budget provisions are weaker than advertised. The measure would ban most future borrowing to erase a deficit but does nothing to prevent the Legislature and governor from engaging in the same kind of practices that led to the accumulation of today's mountain of red ink. Again, Westly said, that's better than nothing. "I don't want to say it's a panacea," he told me. "Is it perfect? No. Is it a huge step in the right direction? Yes. Is it something that every Californian can look at and say, 'That makes sense'? Yes." Westly, a longtime Democratic activist and former e-Bay executive, hopes to be governor some day himself. He is getting a ton of free publicity by appearing at Schwarzenegger's side while another top Democrat, Treasurer Phil Angelides, is arguing that the governor's program is fiscally and morally irresponsible. But Westly is taking a big gamble. The governor's measures are defensible -- but only as modest first steps that should be part of a comprehensive plan to truly bring the budget back into balance. If voters pass the two propositions thinking that they have solved the problem, only to learn later that the tough medicine is still ahead, many of them are bound to be disappointed. In that case, Schwarzenegger's credibility would take a hit, and Westly,
his lesser-known sidekick, might regret having helped the governor sell
-- or oversell -- his fiscal recovery package. |
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These news clips are provided by the Public Affairs Department of The California State University. They are intended for the internal use of The California State University system and should not be redistributed. Questions and submissions may be sent to publicaffairs@calstate.edu. |
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