A closer look: Budget may be balancing act

The victory speeches and the thumbs-up poses dispensed,
Gov.-elect Arnold Schwarzenegger must now turn his attention to
dealing with state problems for which he promised solutions during
his two-month campaign.

But taking the reins of the fifth-largest economy in the world
has come at a time when there is anything but time
““ every decision and every moment will count to steer
the state of California out of troubled waters.

Many experts believe the biggest task for Schwarzenegger as he
sets himself up in Sacramento will be coming up with a balanced
budget.

Barbara Sinclair, a professor of political science, said this
will be difficult feat given the small amount of time and the huge
decisions he has to make.

“He ran a campaign where he promised “˜no pain’
to voters,” she said. “He is arguing to repeal the car
tax ““ but he will get in real trouble if he can’t
replace revenue.”

Car tax revenue totalling approximately $4 billion currently
benefits local governments, contributing to fire and police
services.

To replace such funds and balance the budget, Schwarzenegger may
have to resort to wide-scale cuts, said political science Assistant
Professor Jeffrey Lewis.

“This notion that the deficit is all waste, fraud and
abuse is not the case,” he said. “(Schwarzenegger) has
to square the circle; that’s the problem.”

Schwarzenegger may resort to issuing debt to raise money, or he
may seek to solicit funds from Washington, D.C.

“If he can get the federal government to pony up extra
revenue for California, that would help him considerably,”
said Scott James, associate professor of political science.

“In the light of the upcoming presidential election, the
federal government is interested in a Californian administration
that looks effective,” he added.

But for the new governor to appear competent at the helm of the
state, James said Schwarzenegger needs a symbolic political victory
early in his term: whether it be “terminating” Gov.
Gray Davis’ car tax or dealing with the right of illegal
immigrants to obtain driver’s licenses.

“Does Arnold Schwarzenegger have the capacity to lead? An
early victory has the capability to establish credibility and
political authority,” James said.

Another priority for the new governor will be the formation of
an almost bi-partisan coalition to facilitate the passing of the
2004-2005 budget, he added.

With approval from two-thirds of Legislature members needed to
pass the budget, Schwarzenegger potentially faces an uphill battle
against the Democrat-dominated assembly and senate.

Part of this effort will require the development of a
partnership with Lt. Gov. Cruz Bustamante, after both men had to
run against each other to replace Davis.

A large, diverse transition team will help smooth matters over,
Lewis said, as well as the fact that Schwarzenegger’s
allegiance to the GOP is not as strong as that of other party
conservatives such as Sen. Tom McClintock or former recall
candidate Bill Simon.

“Democrats are likely to be cooperative, though,”
James said. “They saw the recall as a referendum not only on
Gray Davis, but also on democrats.”

Nonetheless, producing a balanced budget remains the most
daunting and pressing task for the future Gov. Schwarzenegger.

“No amount of meeting, greeting or schmoozing with
legislators will solve the budget problem,” Sinclair
said.

“As a businessman and a big actor, he is used to
situations where he tells people what to do ““ and it
definitely won’t work that way,” she added.

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