Political Hay

Benedict Arnold

Schwarzenegger on the brink of the ultimate betrayal of California taxpayers.

By 1.6.09

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Just over five years ago, Arnold Schwarzenegger swept into power in California, vowing to crush the "spending addicts" responsible for the state's crushing budget deficit and to thwart Sacramento Democrats who saw taxpayers as ATMs.

"The people of California have been punished enough. From the time they get up in the morning and flush the toilet, they are taxed. Then they go and get a coffee, they are taxed. They get into their car, they are taxed. They go to the gas station, they are taxed. They go for lunch and they are taxed and [it] goes on all day long, tax, tax, tax, tax, tax.…This is crazy," the Republican movie star said in August 2003 as his campaign to recall and replace Democratic Gov. Gray Davis hit high gear.

Now, however, Schwarzenegger is about to stab California's beleaguered taxpayers in the back. Not only is he poised to support Democrats' push to raise the state's sales tax, income tax and gas taxes to close a budget deficit of about $1 billion a month; he is also expected to go along with a devious legal maneuver that may allow Democrats to impose tax hikes on a simple majority vote of the Legislature, despite the California constitution's stipulation that taxes can only go up on a two-thirds vote.

Given the fervor of Schwarzenegger's anti-tax rhetoric in both his 2003 election and 2006 re-election campaigns, this turnabout is stunning. It's as if environmentalists woke up one morning to headlines that Al Gore was personally drilling for crude in the Arctic National Wildlife Refuge.

What happened? The simplest answer is that in late 2005, Schwarzenegger decided he would rather try to be a popular governor than a great one who got a lot done. The shift from aggressive to accommodating came after Schwarzenegger's slate of budget, teacher tenure, redistricting and union-dues reform measures were defeated in a November 2005 special election due to a $100 million-plus union disinformation campaign.

The strategy worked, at least politically. In 2006, Schwarzenegger dropped his confrontational approach to the Democrats who control the legislature, teaming with them to win enactment of the first comprehensive anti-global-warming law enacted by any state and to persuade voters to pass $42 billion in bonds for various infrastructure projects. A humming economy yielded an unexpected $9 billion revenue surge that made budget negotiations less fractious than normal, and the governor coasted to re-election with a campaign built on the audacious premise that Schwarzenegger had established a new, "post-partisan" template for American politics.

Most of the state and national media swallowed the myth whole, ignoring the fact that zero real progress had been made under Schwarzenegger on California's most intractable problems -- its mediocre public schools, broken prisons, vast unfunded liabilities for benefits for retired public employees and antiquated water system.

This myth may persist in the minds of David Broder and George Stephanopoulos. But in Sacramento, at least, Schwarzenegger's claim to have pioneered a new form of successful governance is now seen as an utter joke. Instead, even Democrats say his recent stewardship seems like a tired reprise of the final years of Gray Davis, his disgraced predecessor. Just like Davis, Schwarzenegger has shunned Republican budget proposals in favor of plans that preserve the state's discredited status quo. (It was only in September that the governor finally accepted that spending actually must decrease instead of increase at a slower pace.) Instead of targeting majority Democrats beholden to public employee unions as Sacramento's biggest problem, Schwarzenegger joined the media in depicting minority Republicans as the key villains for refusing to raise taxes -- the same as Davis.

Now that a deep recession has struck the Golden State, gimmicks and accounting tricks can no longer be used to disguise the deficit that has been building over the past eight years -- and Schwarzenegger is prepared to go to an extreme that even Davis didn't dare consider.

Instead of embracing a severe-but-workable GOP budget plan that avoids new taxes, the governor is working almost exclusively with Democrats -- and they have dreamed up an extraordinary end run around the two-thirds tax hike requirement. Under their reading of the law, revenue-neutral measures can be adopted on a simple majority vote. So they adopted a bill that sharply raises sales, income and gas taxes while eliminating the fee drivers must play each year to register their cars. Democrats then reinstated the car fee to its old amount, relying on legal precedents that classified the levy as a fee, which can be raised on a simple majority vote.

Schwarzenegger rejected the bill -- but only because Democrats refused to make some concessions on unrelated issues, not because of outrage over an open assault on the clear intent of the state constitution.

In coming days, he's likely to gain these concessions and sign the bill, giving California by far the highest taxes of any state. Not only that, he will have made it much easier for far more tax hikes to be imposed in the future by going along with the gutting of the chief anti-tax provision of the California constitution.

It's hard to believe this is happening. Arnold Schwarzenegger was supposed to defend taxpayers. Instead, he's ended up being the tax collector for the public employee union state. Betrayals don't get much more extreme than this.

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About the Author

Chris Reed is an editorial writer for the U-T San Diego newspaper, formerly the San Diego Union-Tribune.