Arnold's War on the Establishment

by Tony Quinn
Feb. 5, 2005
Initiative war has been declared! The armies are mobilizing. Already Arnold has moved four divisions to the frontier. The unions are massing at their fortresses with plans for counterattacks. In Sacramento, frightened lobbyists are packing their BMWs with Guccis and silk ties hoping to flee the city before the capital is destroyed in hand to hand combat.

Well, maybe it’s not quite that bad, but in political terms a very real war is at hand. Gov. Schwarzenegger launched four attacks on the Democratic/liberal/labor union establishment in his State of the State speech. His adversaries have countered with their own attacks.

To show the extent of the coming battle, more than 30 proposed initiatives are awaiting title and summary at the Attorney General’s office. This does not mean we are looking at 30 or more ballot measures if and when the governor calls a special election in 2005. But both sides are getting ready.

Filing an initiative is the easy part. It only costs $200 to file one; then the Attorney General and Legislative Analyst then have 45 days to prepare a title and summary. The hard part comes next; qualifying an initiative requires a budget of close to $1 million. But any initiative qualified by this summer would appear on any special election ballot called this fall.

The governor has outlined four specific areas, starting with the budget. In his State of the State speech, he noted that current revenues will be up by $5 billion over last year, but spending formulas in the budget will push up spending by $10 billion. “The way the formulas now work, we will never catch up. No matter how well we do the current system is programmed to spend ever more,” Schwarzenegger told the legislature.

His solution is a mechanism that automatically cuts spending if a balanced budget is not passed on time. This is something like the Gramm-Rudman approach adopted by Congress during the Reagan years. Already two versions of this spending limit are at the Attorney General’s office.

But Schwarzenegger may run into opposition from some of his allies in the business community. Sen. John Campbell (R-Orange County) has a rival initiative, with four different versions also awaiting title and summary, that limits growth of spending to a formula based on population and inflation. Advocates of this approach say it will “capture the surplus” during fat years not just cap the deficit during lean years.

Schwarzenegger’s second and third reforms will replace strict tenure for teachers with merit pay, and change the formulas for state pensions to make them close to the “defined contribution – 401k” model used in private business. The public employee unions are already howling their heads off over these assaults on their sacred cows.

The unions’ approach is, well two can play this game. They have hired Democratic law firms to draft their own wish list of initiatives. Heading the list is the “Tax Fairness for Homeowners Act of 2005”, sponsored by liberal activist Lenny Goldberg. This measure would institute a “split roll” property tax, a several billion tax hit on large and small businesses.

Goldberg is not the only backer of a “split roll.” The California Teachers Association has submitted the “Economic Recovery Tax Relief Act” that would not only split the property tax roll, but also increase corporate taxes, increase insurance taxes and impose an oil severance tax.

Unions are also sponsoring proposed initiatives to raise the minimum wage to $7.75 by 2007, and to set up a bulk purchasing prescription drug program. This would be a state-run drug program that would require drug companies to sell their drugs to Californians through a state agency.

How many, if any, of these tax increase and anti-business ballot measures will be carried forward to qualification is anyone’s guess. But it seems pretty clear at this point that Schwarzenegger will not have a 2005 special election ballot to himself.

Already in circulation is a measure to deny drivers’ licenses and college tuition to illegal aliens. This initiative has a February 22 deadline to turn in signatures, but if it qualifies, it would make any special election ballot. Illegal alien drivers licenses would probably overshadow any of the fiscal and process initiatives currently in the hopper.

Finally, Schwarzenegger will be supporting a redistricting reform initiative. At first it appeared he would back a measure already on the street sponsored by conservative activist Ted Costa. But the governor has apparently soured on this measure, which gives the job of drawing new legislative and congressional districts to a panel of retired judges selected by legislative leaders.

Instead Schwarzenegger is backing ACA 3, introduced by Assembly GOP Leader Kevin McCarthy, a cleaner version that specifically requires the drawing of competitive legislative districts. Like the Costa measure, this one would require new legislative and congressional district lines as early as 2006.

This latter provision has drawn howls not only from liberal Democrats, but also from conservative Republicans. The current sweetheart plan guarantees Republican 20 House seats from California. House GOP leaders fear new lines might endanger that. Of course, it would also mean congressmen would have get on the midnight flyer and return to California to campaign once in a while.

To close on a military theme; Schwarzenegger seems determined to send to sea a convoy of ballot measures. We will soon find out what dangers lurk in the depths of the political ocean.

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