Editorial Editorial (January 09, 2004)

Selling budget cuts, Arnold-style Selling budget cuts, Arnold-style (January 09, 2004)

Californians will learn today with the release of budget details just how much of Gov. Arnold Schwarzenegger's enthusiasm we can share from his upbeat "State of the State" address last Tuesday. So far, we like what we've heard. Although his speech was short on numbers, Schwarzenegger's 26-minute-long address, which was interrupted 39 times by applause, continued his hard, fast-paced rhetoric that won voter approval Oct. 7 to replace Gov. Gray Davis, who was recalled. Schwarzenegger warned that the road to recovery will be difficult, but nevertheless repeated his campaign promise to lead the state to better economic times without raising taxes. A key to his recovery plan will be gaining voter approval on March 2 for his $15 billion debt-restructuring bond. This measure would repay $14 billion in loans taken out during the previous administrations that are due in June. If voters do not agree to the borrowing, the state could quickly find itself in an unprecedented fiscal crisis, facing bankruptcy and forcing the governor to drastically revise his budget priorities and promises. As part of the bond measure, Schwarzenegger and the state Legislature will also seek voter approval on a limited spending cap that will keep the state from adding to its operating costs without corresponding revenue to pay the bills.

Looming on the horizon, however, are shortfalls in the fiscal 2004-05 budget, which the Schwarzenegger administration will announce today. If left unchecked, it would include another $15 billion deficit. In his speech Tuesday, he vowed to balance the budget through a variety of new revenue sources, such as more from Indian casino gambling, and through deep and likely controversial cuts in programs, such as health and welfare. His new finance director, Donna Arduin, was known for cutting billions in social services in Florida as budget director for Gov. Jeb Bush. Lawmakers and lobbyists engaged in budget negotiations with the governor have said that they expect to see a painful list of spending reductions that will reach every corner of the state bureaucracy. Schwarzenegger, in his speech, likened the spending crisis to a cloud with a silver lining that will bring badly needed reform to government.

Schwarzenegger says he is a salesman by nature, and that now most of his energies will go to selling California. He even gave himself a new title as California's job czar, intent on traveling the country and the world to sell California. He sees this role as a natural extension of his familiar role of movie star pitchman. But even for a Hollywood film star whose marketing skills are valuable assets, he has to first sell state legislators on making the spending cuts and government reductions that will be part of today's budget announcement. From all we've seen and heard so far, California is in the grip of a salesman, whose celebrity status and voter popularity could gain the bipartisan support he needs to make California "an empire of hope and aspiration."

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