A Muddled Record, Muddy Future for Governator

Washington Matters

A Muddled Record, Muddy Future for Governator

While his ballot measures were being trounced in

Once the Governator's term ends in early 2011, chances are he'll be able to tout his environmental accomplishments and try to gloss over the financial mess that he'll still be trying to sweep up in his final days. His future could well lie in speaking out on environmental issues, much as former Vice President Al Gore has done but with more charisma  and the drawing power of a global celebrity. It's unlikely Schwarzenegger will return to action movies (he'll be 61), character figures or even cameo roles.

Instead, are there more political roles ahead first for the governor? He's been mentioned as a possible candidate for Democrat Barbara Boxer's Senate seat in 2010, but first he would have to get through a GOP primary in a state party dominated by voters more conservative than he. And it would take a big effort to unseat Boxer, who won by 6.9 million votes in gaining her third term in 2004.

More likely, he'll want to get out of the political grind that has swallowed him up, just as it did the man he replaced in the 2004 recall election, Democrat Gray Davis. Both have been felled by the state's rigid financial and political structure and Californians' incongruous desire for more services without the higher taxes need to pay for them. Proposition 13, passed in 1978, puts firm limits on property taxes, making the state more dependent than ever on personal income taxes, which fluctuate with the economy. And taxes can't be increased without a two-thirds majority in the legislature. For years, Republican lawmakers have been able to block them with barely enough votes. Cuts are made difficult by past ballot measures that allocated a share of revenue to specific sectors such as education and transportation.

Those limits plus a deep recession are proving to be a perfect recipe for financial chaos. Soon after closing a $42 billion budget deficit with patchwork in February, the governor and legislators are faced with a further $15 billion hole only three months later. And defeat of the ballot measure on Tuesday adds still $6 billion more to the problem. The combination of measures would have extended sales and income tax increases that were part of the February deal another two years in exchange for a rainy day fund and a future limit on expenditures. More money would have been raised by expanding money for children's programs to other needs and by selling the rights to future lottery earnings.

After the election, it is back to square one. Republican leaders who went along with some of the tax increases in the February deal have been ousted from office by angry party members. Democrats say they have cut all they can.

But don't rule out tax increases. Democrats will try the same plan they nearly pulled off in February by calling some of the increases fees instead, though business groups will probably sue. Among potential targets for higher levies: Beer wine, liquor and cigarette sales. The gasoline tax could go up 18 cents. High incomers face heftier tax rates. Refineries may get an oil severance fee. Homeowners in fire protection zones may pay more for the cost of fighting tires. More tax loopholes will be closed. And another state tax amnesty is likely, raising $400 million from payment of back taxes.

Spending cuts are inevitable, particularly in health and welfare, higher education and public schools. But cuts won't go very deep. The state's powerful public employee unions won't stand for big reductions. Democrats will seek parole reform rather than irk voters by slashing prison spending.

California lawmakers are already going hat in hand to Washington, seeking loan guarantees for at least $10 billion in borrowing it needs just to pay its bills.

Schwarzenegger has come up with a list of solutions, including selling San Quentin prison and the Los Angeles Memorial Coliseum and laying off 5,000 state workers. But nobody seems to be listening. Republican lawmakers ignore him as too liberal. And Democrats have their own agenda. For a movie star, bodybuilder and center of attraction for all of his life, Schwarzenegger faces the worst of all possible prospects as he leaves office in 20 months: being irrelevant.