Debra J. Saunders

California Republican Party Vice Chair Jon Fleischman, who endorsed the governator in 2003, noted that Schwarzenegger vetoed "a lot of bills that Gray Davis would have signed. The trade-off is that as a Republican governor, his ability to leverage for more spending and higher taxes is amazing. No one has the ability to increase spending like a Republican chief executive." Fleischman threw in President Bush as another example.

The state budget under Schwarzenegger rose from $101 billion when he took over to $131 billion now. Only through borrowing has Sacramento balanced the budget.

Worse, having come into office repealing a car tax, Sunday Schwarzenegger signed a bill to raise smog abatement fee for new cars from $12 to $20 and tack on $3 to car registration fees. Fleischman is angry because those are tax hikes.

I am angry because Schwarzenegger raised fees to fund new spending, not to mitigate the state budget shortfall -- granted, a general tax hike is harder because unlike a fee hike, it requires a two-thirds vote -- for energy subsidies and clean-air programs. Or, as tax foe Grover Norquist put it, "He's raising taxes for corporate welfare."

Forget that, said Duf Sundheim, former state GOP chairman. Schwarzenegger "is the only thing standing in the way of this state actually going over the cliff. People forget how bad things were when he took over -- a $38 billion deficit. Companies would regularly tell me they were leaving the state. People had lost confidence in our ability tackle the problems. You're not going to solve all of them."

GOP consultant Kevin Spillane noted that Schwarzenegger ushered through workers compensation reform and has fostered a positive business climate.

Many insiders agree that Schwarzenegger's biggest mistake was to agree to push three ballot measures -- later expanded to four -- that were put before California voters in 2005. All four measures -- dealing with teacher tenure, public employee unions, state budget reform and the reapportionment process -- tanked. Voters thought Schwarzenegger was being too political in calling the special election. It didn't matter that the budget reform and redistricting measures would have delivered badly needed reforms.

When it was over, observed former Davis aide Roger Salazar, "All that you've got left is smoke, and when that clears you're still in the same spot."

Schwarzenegger abandoned budget reform; the state is still spending more than it takes in, and many on the right feel let down. Salazar's verdict: "Apart from the theatrics," it's "new Guv same as the old Guv."

Or, as Davis observed, Schwarzenegger discovered that governing California "is not pick-up sticks. And you frequently are exposed to problems that are beyond your control."

Then Davis explained to me, as succinctly as can be, the morass -- my term -- that passes for government in California and America: "Throughout America, the public is living beyond its means. However, there is no appetite to send the government more of their discretionary income. Elected officials have to come to terms with that. People want services. People want their programs financed. But they don't want to send any more money to Sacramento or Washington. It's your job as an elected official to figure out how to respond to the rising tide of expectations for government services within the resources the economy provides."

Schwarzenegger promised to be a governor-action hero, but he morphed into a mortal, if able, politician who helped the economy, made the state better off than when he started -- and learned to fear the voters' wrath.

And so he has come up with a new gimmick to fund his proposed universal health-care package -- leasing the lottery to a private company to come up with $2 billion of the $12 billion needed. A big new government program -- that Californians really want as long as they don't have to pay for it.

The voter anger that swelled when the Davis administration raised the car tax -- and led to his recall -- is gone. The recall taught state pols what happens when they raise taxes, and the 2005 special election showed what happens when a governor tries to curb spending even moderately.

No worries. To paraphrase Issa, the voters are happy.

Debra J. Saunders

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