Friday, June 19, 2009





This might be mere coincidence…or maybe not. But the people and interests who will suffer least and do best under Gov. Arnold Schwarzenegger's latest budget plan and the two budget compromises he negotiated in September and February are the same ones that contribute the most money to his political committees. And those that will do worst - you guessed it - contribute virtually nothing.

Whether or not there is a cause-and-effect relationship here, Schwarzenegger's underlying priorities are starkly revealed by his response to the worst state budget crisis in generations.

The man who loves to call himself "the people's governor," it appears, cares most about people who give him money. The former muscleman actor also is revealed as willing to doom many persons to suffering or even death while assuring that some of his wealthy campaign donors won't bear a fair share of the state's burdens.

A fundamental lack of interest in anyone less fortunate was perhaps best evidenced by remarks from his finance director, Mike Genest, in a remarkable conference call with political reporters just after Schwarzenegger revealed his latest proposals.

Conceding the plan would solve the budget crunch mostly by depriving the neediest Californians of food, shelter, education and medical care, Genest added this:

"We have to make the numbers work. We can't worry about the trauma (that might cause). Would it lead to deaths? I certainly worry about it. People will have problems, but we don't have any alternatives."

Schwarzenegger wasn't so blunt when he spoke to a joint session of the Legislature. He said he can "see the children whose teachers will be laid off..the Alzheimer's patients losing some of their in-home support services…"

But he stuck to the no alternatives theme. No alternatives? This column and others have detailed how merely changing the rules under which some real estate is not reassessed to current market values on changing hands would provide between $3 billion and $12 billion in new state money each year. All this would take is majority votes in the Legislature and a Schwarzenegger signature.

At its low end, this move could save the Healthy Families program that provides health insurance for 942,000 youngsters. There would also be enough to spare 1.9 million persons loss of Medi-Cal coverage and it would allow continuation of the Cal-Works welfare program that supports the state's neediest families.

At its high end, it could stave off teacher layoffs and cuts in the school year.

But Schwarzenegger and his administration completely ignore this possibility. Similarly, there's no discussion in the Capitol of rescinding $2 billion per year worth of tax breaks granted large California corporations in the budget deals of last September and February.

Is it mere coincidence that real estate and development interests which have been Schwarzenegger's largest donors - more than $20 million so far - are about the only ones who might pay if he closed the state's biggest tax loophole? Or that oil companies, utilities and electronic giants gaining most from the big new tax breaks also are among his biggest donors?

Competitive pressures in today's miserable real estate market make it doubtful most owners of properties that have long enjoyed the no-reassessment loophole could pass their expense on to tenants or customers.

Until now, it's been easy to dismiss some Schwarzenegger behavior as routine politics. He fought to water down the landmark AB32 greenhouse gas emission standards before that law passed, gaining more time for businesses to reduce emissions and reducing the amounts they will have to cut far below the original proposal. Since then he's grandstanded around the world as an environmental champion.

Schwarzenegger campaigned in 2005 for a ballot initiative that would have set strict state spending limits. It lost, but as governor, Schwarzenegger could have used his line-item veto to enforce those same limits on a de facto basis. He did not, and helped dig today's budget hole.

He vowed to "throw away the credit card" if voters passed $15 billion in budget-balancing bonds, then backed more than $30 billion more in borrowing, another contribution to the mess.

But he accepts no responsibility. "My only mistake was allowing the world economy to collapse," he said, waxing sarcastic when asked about his part in the crisis.

Confronted with the problem, he displays token anguish over the cruel realities his proposals could bring about: patients deprived of life-saving drugs, children going with vaccinations, low-income tenants turned into a new cadre of homeless, increased gang activity as summer schools shut down, the state's most valued parks shuttered, and more.

Other politicians, most notably Republican gubernatorial candidate Tom Campbell, have had the guts to call for temporary measures like a gas tax increase to stave off some of the harshest proposed cuts.

But Schwarzenegger ignores that possibility, along with any other potential method of bringing in more state money.

His actions speak louder than any words about what he really stands for: Taking care of his wealthy donors above all else.

Email Thomas Elias at For more Elias columns, visit

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