Schwarzenegger should have clear strategy for future

California Gov.-elect Arnold Schwarzenegger (and who thought we’d be writing that six months ago?) is likely to have about three months of “honeymoon” to make policy changes and establish an imprint on the state’s government. This fact, and the fact that he will have to present a budget proposal to the Legislature by January, suggest that he will have to move quickly, decisively and in some cases ruthlessly to accomplish his initial goals. He should also set in motion certain longer-range reforms.

If the early margins hold up, attempts to stall final certification with lawsuits alleging voting irregularities or disenfranchisement should be defused. But the new governor needs to have his plan in place well before he officially assumes office.

As Orange County (Calif.) Treasurer John M. W. Moorlach said, “The most important thing is to signal convincingly that you’re changing the business climate and that you can be effective.” In his opinion, that starts — after reversing the tripling of the vehicle license fee — with a review of all the taxing and regulatory legislation Gray Davis has signed recently, then setting priorities for which should be reversed first.

The job will be even more difficult than expected if Carl De Maio, president of the Performance Institute, which devised the well-crafted Citizens Budget, is correct. He says his most recent analysis shows that the $8 billion deficit most experts project for next year’s budget is more likely to be $16.5 billion, because the “solution” crafted by the governor and Legislature to this year’s budget was mostly a smoke-and-mirrors act of borrowing and accounting maneuvers.

So what should the new governor do right away?

The first step, of course, should be to repeal the tripling of the car tax. That will reduce projected revenues for next year, of course, but it will represent a promise kept.

The second step should be to sign on to state Sen. Tom McClintock’s court challenge to the long-term energy contracts that ousted Gov. Gray Davis signed. If he’ll take the job, Gov. Schwarzenegger should appoint Sen. McClintock as his finance director.

The next step would be to enforce the $7 billion in immediate cost reductions to be implemented by the governor and envisioned by the current budget.

The Howard Jarvis Taxpayers Association, in its California Piglet Book, has identified about $5.1 billion in waste and duplication that could be cut immediately without reducing (and in some cases improving) state government services. The new governor should implement whatever of these savings he can through executive order, and introduce legislation to do the rest.

Sen. McClintock has sponsored a Bureaucracy Reduction and Closure Commission, modeled after the federal military base closure commission that crafted an omnibus bill for a single up-or-down vote. Gov. Schwarzenegger should endorse it — and appoint a blue-ribbon commission, perhaps headed by Peter Ueberroth and Bill Simon, to start the work and take over officially when legislation is passed.

Finally, the new governor should endorse a spending-cap proposal. The Citizens Budget includes a cap that would permit spending to rise only as much as the sum of annual percentage of population increase and inflation. John Moorlach has been working on a proposal that would cap spending at a rolling average of the previous three to five years. After a few weeks of study, the governor should pick one and push it with all his might.

That’s only the beginning, of course. Combined with an optimistic vision of what California can be if its runaway government is brought under control, however, it should be a good start.