California Politics: Raising Money

Gov. Schwartzenegger is working on raising money, both public and private.

After three days in office, he was already talking about raising taxes. Fixing the budget problems turns out to be not quite so easy as opening the books and doing an audit and figuring out where the "waste" is. A basic fact about government programs: one person's "waste" is normally another's "vital service."

But rescinding the $4 billion in car taxes was popular. Tax cuts normally are. It's figuring out how to cut programs and/or raise other taxes to pay for them that's the problem.

Schwarzenegger celebrated the car tax cut by an appearance at a Los Angeles-area car dealership, whose owner and his wife had contributed $52,400 to his campaign and inauguration. Cash for the candidate, tax cuts to comfort the comfortable, a publicity event for the donor. A good Republican package.

One of his events on his first day in office was to attend a luncheon sponsored by the state Chamber of Commerce, where he told the crowd, "I will be coming back to you and say: Open up your wallets again." He plans to use initiatives to pass proposals by a statewide vote that, under California's badly flawed initiative system, could then only be changed by another statewide vote or by the courts. He's going to need to raise lots of private money to pay for those campaigns.

One big issue that Schwarzenegger wants the legislature to put on the ballot for March (it's a "referendum" rather than an "initiative" if the legislature puts in there) is a $15 billion bond deal. But his finance department is saying that even that borrowing would leave a $10 billion budget gap for the upcoming budget year.

His finance director, Donna Arduin, was known in both New York and Florida for promoting solutions that provide short-term fixes for budget problems that leave the long-term problems in place. Another good Republican practice. After George W. Bush's stint as Governor in Texas, the Republican governor and Republican legislature had to take to raising revenues and slashing programs to plug the gaps he left.

Governor: Pass bond or raise taxes (San Francisco Chronicle 11/21/03)

Governor prepares to court donors (San Jose Mercury News 11/21/03)