The True Cost of Arnold Schwarzenegger’s Governorship

Meredith Turney
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Posted: Feb 15, 2011 12:01 AM
The True Cost of Arnold Schwarzenegger’s Governorship

This week former California Governor Arnold Schwarzenegger announced he is returning to the silver screen. Schwarzenegger gleefully took to his Twitter account and sent the following message: “Exciting news. My friends at CAA have been asking me for 7 years when they can take offers seriously. Gave them the green light today.” CAA is better known as the Creative Artists Agency, the talent agency that handles Schwarzenegger’s movie appearances.

For seven years, Schwarzenegger didn’t appear in many movies due to his responsibilities as Governor of California. Now a private citizen once again, Schwarzenegger is free to pursue his own interests. That’s one of the beautiful aspects of public service in America; an elected leader can serve his fellow countrymen in government for a period of time and then return to private citizenship.

But Schwarzenegger’s tweet seemed particularly callous and egotistical considering that unlike 12.3% of his fellow Californians, Schwarzenegger can find gainful employment. In fact the same day the former governor was tweeting his return to the movies, the state’s Employment Development Department reported California paid almost $23 billion in unemployment benefits last year—four to five times the typical annual payout. Do the math, and that’s $90 million every workday. California’s 1.7 million jobless have exhausted the Unemployment Insurance Fund, which now has a $10 billion deficit and is being propped up by billions in federal loans.

Schwarzenegger’s comments seem all the more insensitive considering he had seven years as governor to help turn around California’s economy. Instead, he unwittingly—or even worse, perhaps volitionally—chose to play along with the Sacramento’s political charade that continues to irresponsibly put off the economic day of reckoning.

As he left office just last month, Schwarzenegger stated during an interview that serving as governor cost him $200 million in expenses and lost potential earnings. With all due respect, Governor Schwarzenegger has cost California far more than any income he might have lost while serving the state.

When Schwarzenegger was first elected in 2003, unemployment was 6%. In 2001, spending unemployment tops 12%. State spending increased 40%. Ironically, Schwarzenegger swept into office during a special election was held to throw out Governor Gray Davis due to his inability to rein in state spending and address the burgeoning budget crisis.

It was under Schwarzenegger’s watch that California’s debt tripled, from $34 billion to $91 billion. The average state debt per citizen was just $997 at the beginning of Schwarzenegger’s term, $2,362 by the end. Debt service now consumes 7.1% of general fund spending. The state’s unfunded public pension liability exceeds $500 billion.

It was also during Schwarzenegger’s tenure that the largest tax increase in state—any state’s—history was levied. In his attempt to sort out the budget mess left by his predecessor, current Governor Jerry Brown is proposing an extension of the massive tax increases.

Let’s not forget the crowning jewel of Schwarzenegger’s legacy: AB 32. This environmentalist cap-and-trade scheme is estimated to cost the state 1.1 million jobs and $182.649 billion in loss of output—let alone the increased utility costs for average citizens, and increased regulations on businesses. All this just so Schwarzenegger’s state can somehow single-handedly save the world’s environment.

In fairness to Schwarzenegger, the national recession hit California particularly hard—especially because the state failed to pad its bank accounts during plentiful times, in anticipation of lean times. Schwarzenegger may also counter that his hands were tied by a Democrat-dominated legislature that stymied his attempts at meaningful reform. True, California’s legislative leaders appear daftly unable to address the monstrous budget quagmire that their inaction has exacerbated.

However, being an effective leader means doing the right thing regardless of one’s popularity or the political consequences. Governor Schwarzenegger began his term with such boldness, but relented when he discovered making hard, unpopular decisions is not as easy as receiving a positive movie review.

That $200 million in lost personal earnings looks pretty measly compared to the billions Schwarzenegger’s failed leadership cost California.