There are a lot of valid reasons for Republican legislators to be upset with Arnold Schwarzenegger. But while voting to override his veto of the state budget would provide some visceral and potentially justifiable feelings of retribution toward a governor who pays them much less attention than they would like, it's not a valid public policy position for a conservative elected official.

There are understandable reasons for a conservative lawmaker to be tempted by the budget that passed the Legislature earlier this week. It doesn't raise taxes, at least according to some definitions. It does implement some spending reductions. It takes the first tentative steps toward budget reform. Most importantly, the long ugly summer has turned into a potentially longer and uglier autumn, and the service providers and editorial writers are screaming for action.

But none of those are reasons for overriding a Schwarzenegger veto. While it's an adroit political maneuver to point out that the so-called revenue “accelerators” that speed up tax and withholding collections originated in his administration's Department of Finance, it doesn't change the fact that it represents a $5 billion tax increase on working Californians. At best, it's deficit spending that will have to be made up in next year's budget from some other source. At worst, state residents are never going to see that money again because it will simply be deployed to help address next year's deficit rather than returned to the taxpayers. While this sleight-of-hand was included in a trailer bill this week rather than in the actual budget itself, it required only a majority vote and therefore no Republican support was necessary. But overriding a governor's veto requires a two-thirds margin: any Republican legislators who put up their votes will need to explain whether they intended their support to signal a $5 billion loan from the taxpayers or simply a tax increase of the same size.

The other political obstacle for GOP lawmakers, while more difficult to explain to voters, is the Alaska-sized loophole in what was once a budget reform package. While Schwarzenegger's version of budget reform would certainly benefit from an absolute spending cap, political realities inside the Capitol dictated that a rainy-day fund that required surplus revenues to be set aside for use in economic downturns was probably all he was going to get. Although legislators did agree with Arnold's request that money be shifted into that fund in almost all circumstances, they ignored his proposal that money could only be transferred out when revenues fell below projections.

If your eyes are glazing over, think of this another way. Schwarzenegger reasonably wants the rainy-day fund to be tapped only when it rains. The legislature said no, which means that any extra dollars can be used any and every time they'd like to spend extra money. Since those excess revenues can be used upon the same two-thirds vote that is required to pass a budget, it is more than likely that any money will ever be left in that fund for use in a budget emergency. Which was the whole point. This year's budget debate started with bi-partisan agreement that something had to be done to smooth out the boom-and-bust budget rollercoaster that creates such havoc for Californians and their government. Removing restrictions on the rainy-day fund eliminates the final shred of progress toward that goal.

Republican legislators make the point that supporting the governor's veto leaves them fighting against the same sales tax proposal they've been resisting for the last several weeks. But that ideological grounding would suggest that fighting against a tax increase seems to make more sense than voting for one. Supporting the veto doesn't pass Schwarzenegger's budget into law: it simply allows them to continue the fight they've already been waging. Supporting an override means either a tax increase or deficit spending, and it undermines even the partial budget reform that's currently on the table.

All that said, there's the need for something more from Schwarzenegger as well. The governor has not treated the GOP members particularly well, and he'd do well to find something of substance that he can offer them in exchange for their support. Next week, they can line up on opposite sides and begin the sales tax`war all over again. But right now, Arnold needs Republican votes. And they need him too, if only to save them from themselves.

This entry was posted on Wednesday, September 17th, 2008 at 12:00 am and is filed under Blog Posts.