Gov. Arnold Schwarzenegger will face a hugely difficult problem tomorrow when he delivers his annual State of the State address: the Grand Canyon-sized gap between the lazy conventional wisdom about California's problems and reality.
When Schwarzenegger ran during the 2003 recall campaign, his analysis of Sacramento's dysfunction was acute: Gov. Gray Davis and the Democratic-run Legislature had gone on a four-year binge in which spending grew much faster than population and inflation. This binge occurred both during the windfall years of the tech boom and as revenues plunged when the stock market tanked after the Sept. 11, 2001, attacks. Only arguably illegal borrowing and accounting gimmicks allowed Davis and the Legislature to maintain the fiction that the state budget was balanced.
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Behind this irresponsibility, Schwarzenegger said, was a system gone haywire. Gerrymandering had given the public employee unions such influence over beholden Democratic lawmakers that any attempt to control the growth in spending was doomed.
The counter-argument – that the red ink was Republicans' fault because they wouldn't raise taxes – ignored the fact that even as revenues soared by 25 percent over a four-year span, Democrats raised spending by 40 percent. This recklessness is why a 2003 survey by USA Today ranked California as the worst-governed state.
More than two years later, California's finances are still a mess. What little progress has occurred is because of Schwarzenegger.
Nevertheless, after the governor's disastrous 2005 special election campaign, the $100 million in union-funded attack ads demonizing him continue to play huge dividends. Many pundits assert the main problem with Sacramento is Schwarzenegger. They embrace the central myth of California politics: that Democratic lawmakers share public discontent with the status quo and support change.
Confronting this dilemma, what is a politician to do?
The governor could stay the course and hope the political tides turn his way. Even after last year, this approach has promise. The unions' last-minute sandbagging of the governor's innovative solar-energy plan seems to have shocked many observers to their senses. Soon afterward, the editorial pages of several of the state's most liberal newspapers backed some or most of Schwarzenegger's four initiatives.
Or the governor could sue for peace, making concessions to unions and proposing – not fighting – big spending increases. In other words, he could take the route of a politician hunting for better poll numbers, not the course of a leader.
Unfortunately, reports in recent weeks suggest he is about to take the easy, expedient way out. This would be a disaster. That's why in tomorrow's speech, we hope that he remembers the soundness of his original analysis of California's dysfunction. It's obvious that Arnold Schwarzenegger isn't the problem in Sacramento – and he of all people should know that.
