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Governor calls for 'bold new era'

He proposes 4 major government 'reforms'

By Gary Delsohn, Sacramento Bee January 6, 2005

Assessment of the Reform Agenda three months later

Calling on the Legislature to enact four sweeping "reforms" of state government, Gov. Arnold Schwarzenegger promised Wednesday to use the changes to help restore California's economic and political luster. "Join me in regaining control of California's financial future," the Republican governor urged a joint session of the Senate and Assembly in his second State of the State speech.

"Join me in restoring the trust of the people and join me in introducing a bold new era of reform in California."

Schwarzenegger, who ran for governor on a vow to clean up state government, laid out four broad and highly controversial initiatives on state spending, pensions, education and legislative redistricting. Unlike a year ago, when he struck an early deal with the powerful California Teachers Association, Schwarzenegger called for merit pay for teachers, and his aides said afterward they would not immediately repay extra money owed schools in this budget year.

Schwarzenegger said almost nothing about health care or social services, which Democrats and others expect him to propose slashing on Monday, when he releases his spending blueprint for the next fiscal year.

But he did announce his intention to create a drug discount card that he said would make prescription medicine available to nearly 5 million low-income people at prices competitive with those in Canada.

Schwarzenegger also said he will immediately seek the elimination of 100 boards and commissions he called "unnecessary," including licensing boards for contractors, doctors and dentists, appeals panels for unemployment and workers' compensation claims, the Integrated Waste Management Board and the High Speed Rail Authority.

The move would eliminate "over 1,000 political appointees," Schwarzenegger said, adding: "No one paid by the state should make $100,000 a year for only meeting twice a month."

Although Democratic leaders in the Assembly and Senate gave Schwarzenegger generally high marks for his speech, two Democrats who've said they intend to run for governor next year were far less charitable.

Calling the 28-minute talk "unnecessarily confrontational," Attorney General Bill Lockyer said "the tone is obviously meant for a California audience, not (legislators in) this room."

Phil Angelides, the state treasurer who has continually attacked Schwarzenegger for not doing more to balance the state budget, said Schwarzenegger's education proposals, such as merit pay for teachers and changes in the education funding formula Proposition 98, are "trying to create a war to take the focus off where it ought to be."

"What he doesn't want people to see is what he's about to do is slash education and health care funding because he's dug us an $8.1 billion deficit," Angelides said in an interview on the Assembly floor following Schwarzenegger's speech.

Republicans applauded Schwarzenegger's leadership and what they said was a strong sense of urgency in the speech.

"I think it sent an overall message that you either lead, follow or get out of the way," said Assembly Republication leader Kevin McCarthy of Bakersfield, "and that he doesn't have time to sit around and wait to see California continue to fail."

Schwarzenegger implored the Legislature to begin work on his four reform proposals immediately in a special session he is convening today. That way, he said, the public can vote on his reforms at a special election "by early summer."

And in the only direct threat to lawmakers he's taken turns praising and calling names his first year in office, Schwarzenegger made it clear he'll battle them on the campaign trail if he doesn't get his way.

"If we here in this chamber do not work together to reform the government," he said, "the people will rise up and reform it themselves. And you know something, I will join them. And I will fight by their side."

His proposals include:

  1. A budget cap that holds down the rise of state spending and overrides obligations such as Proposition 98, approved by voters in 1988. The move immediately came under attack from education officials.
  2. "They are going after Proposition 98," said Kevin Gordon, executive director of the California Association of School Business Officials. "We have balanced the budget in the last decade on the backs of children, and he's not making the situation any better."

  3. A dramatic shift in the way pensions are paid to new state employees, eliminating guaranteed fixed-rate payouts and replacing them with 401(k)-type programs used in the private sector.
  4. That idea is fiercely opposed by public employee labor unions and was blasted by Assemblyman Alberto Torrico, D-Newark, chairman of the Assembly committee on public employee retirement systems.

    Torrico said the plan is "straight out of President Bush's playbook. It's no different from the president's plan to privatize Social Security. They're both windfalls for Wall Street at the expense of Main Street and working people."

  5. Teacher salaries based on merit, not tenure. The proposal, pushed unsuccessfully a number of times by his mentor, former Republican Gov. Pete Wilson, is anathema to teacher unions and most Democratic lawmakers.
  6. "It's a diversionary tactic," said Assemblywoman Jackie Goldberg, D-Los Angeles. "Everyone in education wanted to know, 'Are you going to keep your deal? And, if you aren't, why would you pick the thing we like the least to put on the table instead?' "

    The "deal" she referred to was Schwarzenegger's promise in last year's budget talks to give schools their share of extra state revenue - $1.4 billion this year - they're entitled to under Proposition 98.

    Tom Campbell, Schwarzenegger's new finance director, told reporters after the speech that public schools need to do their share to balance the state's budget.

    "If we are spending more money than we have, there's only one thing we can do, and that is stop, and nobody should say that they are above that," Campbell said.

  7. A new way of drawing legislative and congressional district lines, transferring that authority from the Legislature's leaders to an "independent" panel of retired judges.
  8. Democrats and some Republicans in California's congressional delegation have said they're opposed to the idea and claim it's unnecessary.

    "For people worried about earning a living, buying a house and saving to put their kids through college, the issue of who draws the legislative and congressional district lines doesn't make their 'Top 100 Things to Care About' list," said Sen. Debra Bowen, D-Marina Del Rey.

Schwarzenegger, who earlier promised he would bring "fantastic prison reform" to the state, said he'll release his plan today for a reorganization of the troubled Youth and Adult Correctional Agency.

"This is an agency in which there has been too much political influence and too much union control and too little management courage and accountability," he said of the $6 billion, 54,000-employee agency that runs California's prisons, parole and youth corrections systems.

Schwarzenegger prepared for criticism, saying he knows that "the special interests will oppose all the reforms I have mentioned."

And while Schwarzenegger didn't offer up much in the way of details, he appeared to be previewing what aides say he wants as his legacy if he seeks re-election next year when he talked about building roads and cutting "regulatory and legal hurdles that delay construction and increase the costs of new housing."

"Like Governor Pat Brown," he said of the late Democratic governor who presided over an impressive building boom in the 1960s, "I intend to see that the government builds the roads that Californians need."

Assembly Speaker Fabian Núñez, D-Los Angeles, who tangled often with Schwarzenegger during last year's budget talks, reacted to the speech in a positive - if diplomatic - way.

"We agree with the governor where it relates to improving academic achievement, to make sure that students excel academically and to ensure we have well-qualified teachers in the classroom," Núñez said. "How you get from Point A to Point B, we may disagree with the governor, but we welcome the discussion."

"I know people are expecting us to say negative things about it, but I think he gave a good speech tonight, and I think he leaves a lot of room for working with him and a lot of room for discussion."

FOR IMMEDIATE RELEASE

California School Boards Association

Jan. 5, 2005 – No. 01

School boards stunned by governor’s plan to renege on budget deal with Education Coalition

(Sacramento) – In a pre-release budget briefing with members of the statewide Education Coalition, Education Secretary Richard Riordan, Director of Finance Tom Campbell and Senior Advisor Bonnie Reiss revealed today that not only will the governor renege on the promise he made to schools last year by withholding an additional $1.4 billion owed to them but that he also plans to propose a constitutional amendment that would gut the protections ensured by Proposition 98.

“We are astonished and deeply disappointed by the governor’s decision to back out of the deal he made with the Education Coalition,” said Scott P. Plotkin, executive director of the California School Boards Association. “But we are left absolutely speechless by his proposal to suspend and amend Proposition 98 and resolve the state’s financial troubles at the direct expense of 6 million public schoolchildren.

“The fact of the matter is that voters passed Proposition 98 to protect their children from political wheeling and dealing. And though the governor would have you believe otherwise, our children are not a special interest group. They are the future of this state and this nation, and we all have an interest in making sure they have the resources they need to succeed in the 21st century.

“Just this week two reports were released that revealed in no uncertain terms that California is at the bottom of the heap in terms of school funding — we now rank 43rd in the nation in terms of per-pupil spending. Clearly, now is not the time to jeopardize that funding.”

California Teacher's Association President Response

January 6 Article, Los Angeles Times

Barbara Kerr, president of the California Teachers Assn., called the governor's proposals on education "smoke and mirrors" designed to avoid what she called the real issues.

The governor, she said, "didn't address class-size reduction. He didn't commit to stable or adequate funding."

His proposal to tie teacher pay to job performance "makes absolutely no sense," she said. "It hasn't worked anywhere.... It's a side issue to the real problems of under-funding in this state."

January 6 Article, San Jose Mercury

Campbell said schools next year will get an additional $2.4 billion of new Proposition 98 money -- about half what he estimates education groups would say they're owed. He acknowledged that the governor's spending limit would require changing the politically sacred education-funding guarantee voters endorsed in 1988.

Governor's reform agenda

A rush to confusion

Peter Schrag, Sacramento Bee Columnist, April 27, 2005

What started with a bang in January looks more and more like it will end with a whimper in May. The "it" in this case is Gov. Arnold Schwarzenegger's threat to call a special election in November if he can't get what he wants from the Legislature. But in his rush to the ballot, he and his army of consultants keep tripping over their own proposals.

And so the governor's four little Indians of political reform are now down to 2 1/2. They deal with real problems, but the proposed solutions all look like they owe more to political macho than to real policy thought.

Pension reform is necessary, but it didn't require the sledgehammer the governor demanded. Now, because a drafting error opened the possibility that cops and firefighters would lose their death and disability benefits, thus generating armies of uniformed opponents, he's deferred pension reform. Back to the drawing board.

Which leaves three officially declared issues on the governor's agenda, one of which is shrinking before our very eyes:

  • The Live Within Our Means Act, a convoluted rewriting of the budget process and a major change in the state's school funding guarantee that would give the governor and legislative Republicans more power to manipulate and drive down spending. It would replace what the governor correctly describes as one autopilot formula with another.
  • Shifting control of California's legislative and congressional redistricting process from the Legislature to an independent judicial commission, including a provision, probably beyond reasonable possibility of realization, requiring lines to be redrawn before next year's elections.
  • Increasing the time required for teachers to get tenure from two years to five and encouraging some form of locally negotiated merit pay. Attacking rigid teacher pay scales based largely on seniority makes sense, but the governor's proposal had neither the thought nor the funding to make it persuasive. Now it seems to have shrunk to a call for what the governor calls "combat pay" that he acknowledges is still being worked out. Hardly the stuff for a special election.

So why the rush? Yes, allowing legislators to draw their own safe districts invites cynical self-dealing, as it did after the 2000 census, though given the state's political geography, no reform will create the large number of competitive districts some people expect.

Even Common Cause, which supports redistricting by commission, opposes the mid-decade redistricting the governor wants as a bad precedent and, since it would have to be based on outdated census figures, very possibly as unconstitutional. In any case, there almost certainly won't be enough time for a commission to redistrict the state and for legal challenges to be exhausted before the 2006 election.

That leaves only two reasons for a costly special election: to put pressure on the Legislature for a deal on the budget, and possibly on reapportionment, and to feed the expensive political machine that the governor has attached to himself.

It's the dream of every campaign consultant, said Bruce Cain, director of UC Berkeley's Institute of Governmental Studies, to turn seasonal jobs into full-time work. Why limit campaigns to every other year when you can have them around the clock? If there's a special election this fall, it will be the sixth statewide election in 3 1/2 years.

As the product of the recall two years ago, with his visionary sense of himself as a man of destiny and his belief that he can sell anything - that for $30 million he can get any ballot measure passed - the governor may have developed an exaggerated sense of the possibilities.

That inflated confidence is a perfect match for an organization laced with high-priced veterans of the campaigns of Gov. Pete Wilson, who may well have an overinflated sense of their own political prowess.

In any case, why the rush now to a special election? As the mistakes with the pension reform initiative demonstrated, initiatives are prone to errors and unintended consequences even in the best of circumstances. In the drafting of initiatives, there's no review, no hearings, no open debate, no formal vetting of any sort. When it's done in a hurry, the process is even more vulnerable.

But since the governor is rapidly losing control of an increasingly chaotic agenda, neither reason seems persuasive, even in the context of the governor's will to power.

Two weeks ago, proponents of a two-headed ballot measure requiring parents of pregnant minors to be notified before their daughters can have an abortion and barring anyone from forcing a minor to have an abortion submitted far more signatures than they'll need to qualify.

At the same time, union groups declared they'd collected enough signatures to qualify their initiative to force down the price of prescription drugs by, among other things, allowing the state to negotiate prices. Those two issues alone are likely to overshadow anything the governor wants to put on the ballot. So what's his rush?

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Last modified: January 6, 2005

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