Schwarzenegger doles out cash

California governor bypasses legislators to bail out municipalities

December 19, 2003|By Vincent J. Schodolski | Vincent J. Schodolski,CHICAGO TRIBUNE

LOS ANGELES - Gov. Arnold Schwarzenegger used an obscure state law yesterday to bypass the Legislature and funnel billions of dollars to cash-strapped municipalities in California desperate for funds normally supplied by a statewide tax on motor vehicles.

The Republican governor acted after he and lawmakers were unable to agree on ways to find the money that was lost when Schwarzenegger fulfilled a campaign promise to roll back an increase in the vehicle licensing fee that was triggered during the administration of ousted Gov. Gray Davis.

Schwarzenegger said he was forced to use emergency powers because the legislature left him no other option. "I had to do this," he said.

"I was elected by the people of this state to lead; since the legislative leadership refuses to act, I will act without them," Schwarzenegger said in a statement.

The governor channeled $2.65 billion to cities and towns, covering part of the expenditure with $150 million from unilateral budget cuts he imposed using new powers granted earlier to the state's chief executive.

But the rest of the money will have to come from further cuts, and those cuts will have to be approved by lawmakers.

The governor's sudden action apparently caught many members of the Legislature off-guard. The state's top Democratic lawmaker decried Schwarzenegger's disclosure of his plans to the press on Wednesday without consulting with the legislators. Sen. John Burton, the Senate president pro tem, said the governor had shown a lack of courtesy in failing to discuss the plan.

Other lawmakers expressed astonishment after the action.

"My reaction, like a lot of my colleagues, was one of surprise," said Assemblyman Joe Nation, a Democrat.

Schwarzenegger's moves offer another example of his unorthodox method of governing the nation's most populous state.

"I find his good-cop, bad-cop relationship with the legislature very interesting," said Sherry Bebitch Jeffe, a professor at the University of Southern California.

Since taking office last month, the actor-turned-politician has used a form of public governance to avoid the Legislature when lawmakers balk at doing what he wants.

As he battled over ways to balance the state's budget for next year, Schwarzenegger used a carrot-and-stick approach with lawmakers by keeping lines of communication open while visiting the home districts of lawmakers who opposed him to bring his side of the budget battle directly to their constituents.

The governor wanted the Legislature to authorize an initiative for March's ballot that would allow borrowing $15 billion to cover state spending in fiscal 2004. He also wanted to impose spending limits on the legislature, something Democrats resisted.

The talks were on the verge of collapse as a deadline for placing the measure on the ballot approached. It was only after the governor's wife, Maria Shriver, became involved and persuaded Democrats to stay at the table that a deal was reached. Voters will decide next year if California, already facing an expected $8 billion deficit by the end of the fiscal year, should borrow billions of dollars more.

The declaration of a fiscal emergency did not go unnoticed yesterday on Wall Street. Only moments before the governor held his news conference, Fitch Ratings lowered the state's bond rating to near junk bond status - the second rating agency to make the downgrade in the past month. Schwarzenegger said he was not concerned by the downgrading.

The governor acted yesterday as mayors were threatening to sue the state for failing to provide the expected revenue. That money would be used to pay for such essential services as police and fire fighting.

The money will have to be taken from other programs, including welfare payments and other services, including perhaps education - decisions that must be made by the Legislature.

"What we are really looking at is a game of 52-card pickup," said Bebitch Jeffe, talking about how the governor and the legislature are handling fiscal affairs. "He does not have a background in the legislative process," she said of Schwarzengger.

"Politically, he is doing OK as long as he keeps catching all the balls," Bebitch Jeffe said. "But I don't think he is having as much fun as he thought he would."

The Chicago Tribune is a Tribune Publishing newspaper.

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