California has 12% of America’s population. The results of the upcoming election will determine the future not only of the state, but likely the nation as well. The race for governor, between Meg Whitman and Jerry Brown, could not be more meaningful or illustrate a larger study in contrasts. Most people believe that Carly Fiorina’s attempt to unseat far-left Senator Barbara Boxer is the second most important election, but in fact, it’s not. The race for State Controller, the state’s chief financial officer, will be the key to success for Whitman when she becomes our Governor. In 2006, John Chiang won the State Controller’s office over Republican Tony Strickland, even though internal polling indicated that Strickland led the race until the last weekend. The state public employee unions recognized that Phil Angelides had no chance against Schwarzenegger, so they targeted their efforts and millions of dollars against Strickland. Arnold, who knew he was swamping Angelides, made virtually no effort to help his down-ballot slate and ended up with a Controller and Attorney General of the opposing party.
Chiang has repaid the unions many times over, and has made Arnold regret his shortsighted neglect. No one has been a bigger thorn in the side of the Terminator than Chiang, who has dutifully kowtowed to the public employee unions to the detriment not only of Arnold, but more significantly the taxpayers of California. Chiang is a former IRS staffer who has also been the enemy of California businesses in his role as a member of the State Board of Equalization, as well as the nemesis of working Californians as the overseer of the Franchise Tax Board (which is responsible for collection of income taxes). Rarely does he rule in favor of the taxpayer.
For four years, Whitman watched the battles between Arnold and Chiang and Jerry Brown, the Attorney General. She decided that she needed a dedicated team to confront the major challenges facing California, and with this objective approached the highly respected Strickland and asked him to make a second run. Initially, Strickland was very reluctant. He had just won a State Senate seat and questioned the wisdom and the draining effort of opting out so quickly to run a statewide race. But Whitman, along with many of his most loyal supporters, convinced him that he was much more valuable to California as the State Controller than he was as a senator. He signed on and he is now a happy man. The forty-year old, 6’ 4” Strickland, married with two young children, had no problems getting the support of his wife, Audra. She is herself a member of the California State Assembly and as familiar as her husband with the fiscal challenges facing the state. She has seen the cost of government soar during her six years in Sacramento with very little ability to stop the disaster as there are not enough Assembly Republicans to thwart the Democratic onslaught. They have to rely on a slim margin in the State Senate to do that.
Strickland understands very well the importance of his election, not only to work closely with Whitman, but also to dig into the details of the economic travesty that California has become.
For example, national exposure of the preposterous salaries in the City of Bell drew attention to the issue of excessive pension and healthcare benefits for public employees. Yet Chiang, as CFO of the State and a member of the CalPERS (the pension board overseeing the Bell employees), knew about the ridiculous salaries four years ago and sat on his hands in his role as chief protector of the unions who paid his way into office.
Reversing the unsustainable pension costs is one of many jobs to be done once Strickland becomes Controller. California’s silly rules that allow unused vacation pay and sick leave, accumulated over several years, to inflate the final-year salary that forms the basis for pension calculations, must be reformed to bring the budget into line. Strickland told me he does not understand why state employees earn accumulated vacation or sick leave at all. He pointed out that it is a basic rule of private industry that employees must use their vacation and sick leave or lose it. This principle is required by CPA’s who audit companies in order to prevent fraud and collusion, and Strickland doesn’t understand why the same principle shouldn’t apply to public employees as well.
If Chiang retains his seat, Whitman will be stymied in her efforts to make the changes necessary to return economic sanity to California. No other state is less business-friendly than California, yet Chiang doesn’t seem to understand that his lockstep allegiance to the unions and his anti-taxpayer behavior is a large part of the problem. Strickland’s election is critical not only for California, but for an economic turnaround throughout America. He understands the stakes involved in this election and relishes the chance to be part of the team that brings California back to its “golden” days. November 2nd cannot come soon enough.