The Invisible Governor

The Governor has continued to assert, and the people largely believe him, that he is somehow removed from the financial troubles that face the state. And he got an assist from an unlikely source today - former Governor Gray Davis.

So why is California suddenly faced with a $14-billion budget shortfall? Is it because the governor (or the Legislature) did something terribly wrong?

No, the governor of a nation-size state like California can affect the economy, but only on its margins. The reason this deficit is looming is because no one can repeal the business cycle. Just as night follows day, expansionary times will be followed by recessionary times. And yet the overwhelming impulse in Sacramento is to spend every dollar on the table. If a booming economy has the state coffers flush, Democrats say: "There will never be a better time to expand programs than right now." Republicans counter: "We have too much money. Let's reduce taxes." [...]

Believe me, Gov. Arnold Schwarzenegger doesn't want to close 48 parks, reduce education funding or release prisoners. Like all governors, however, he is required to bring expenditures in line with revenues. I don't agree with all of his suggested cuts, nor do I endorse all of the critical responses from the Legislature.

There is a significant reform suggested by the governor, however, that I fully endorse. It is a constitutional amendment that would require putting aside a portion of surging revenues in good times as a buffer against painful cuts in bad times. I called for such a "rainy day" fund while in office -- and recently former Gov. Pete Wilson also spoke in favor of this idea.

Gray Davis is showing the political acumen that made him the most reviled governor in recent California history. He's also being massively dishonest. Schwarzenegger repealing the Vehicle License Fee's return to 1998 levels had an undeniable impact. Furthermore, so did his borrowing through bonds, which costs the state billions of dollars per year.

Are Arnold and the California GOP to blame for this? Who else? Nobody put a gun to their heads and forced them to respond to our last crisis with nothing but a toxic combination of demagoguery and tax-cut jihadism. They did it all on their own. I understand the desire to roll up our sleeves and stop sniping about the past, but let's not actively rewrite history to pretend that our latest crisis "just happened." It didn't. Arnold and his party, despite plenty of warnings from nonpartisan budget analysts about what they were doing, deliberately bequeathed it to us.

And, contrary to Schwarzenegger's belief, he has a great deal of control over state spending, including a line-item veto. Trying to fault the legislature for "runaway spending" when he has to sign the document is just completely absurd. The legislature didn't go on a "spending spree" on its own, nor did they use revenue only for the purpose of spending; there were billions in tax cuts thrown in as well.

The Governor, and his predecessor, are writing a history of government in California that doesn't have an executive branch. This is a falsehood that can only be met with laughter.