After his threats didn't work and his proposal for a $15 billion bond issue didn't fly, Schwarzenegger got a break from the secretary of state, who extended the deadline for a week for the legislature to put a bond issue on the March ballot.
He got a deal to do the bond referendum. It was a bipartisan compromise. But what happened is essentially that Schwarzenegger and the Republicans in the legislature agreed to the same compromise that the Democrats offered a week before. The $15 billion bond goes on the ballot to finance some current operating expenses and to pay for the first year of the $4 billion vehicle license fee reduction Schwarzenegger implemented on his first day in office.
The deal will also include some mild spending limits, but nothing like the more drastic "spending cap" that was one of his key campaign promises. There is a provision for boosting emergency reserves for unexpected revenue shortfalls or other financial emergencies. And there is a limited provision to allow the governor relatively minor additional powers on mid-year spending cuts, but only if the legislature is unable to agree in special session. Schwarzenegger's preferred proposal, resurrected from Pete Wilson's days, to allow the governor broad executive powers to cut spending at his discretion was not agreed to.
In the end, the result is not much different that what Gray Davis and the legislature had worked out, only the annual revenue shortfall to be covered is $4 billion bigger. It's a bipartisan action to satisfy what Kenneth Galbraith calls "the culture of contentment." Painful budget cuts are postponed, at least for a few months. Hummer and SUV owners get their lower license fees. And $15 billion in bills (plus interest) get passed on to future taxpayers.
Related articles:
Schwarzenegger's progress San Francisco Chronicle 12/14/03
New Era Emerges Los Angeles Times 12/15/03
Governor signs bond, balanced budget package Sacramento Bee 12/12/03
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