CA: Gov. Says Prop. 76 Will Let Him Do More With Less

Los Angeles Times ^ | October 24, 2005 | George Skelton

[calcowgirl]

It just has an odd sound, this pitch by the governor for Proposition 76: We must slow down spending so we can spend more.

That's the way it comes out, anyway — confusing and illogical on its face.

Political strategists for Gov. Arnold Schwarzenegger must think there's voter appeal in telling people they can have it both ways: less and more at the same time. Or, regardless of where people come down on the side of spending — wanting more or less — they're covered by Prop. 76.

(snip)

Schwarzenegger calls it his "live within our means act."

But how does the state, facing a deficit projected at $6 billion next year, live within its means without raising taxes — while spending more to build things?

The governor must be a magician.

Actually, Schwarzenegger and his chief fiscal advisor, Tom Campbell, do offer answers for the money mystery. One answer is to borrow more with infrastructure bonds.

The Schwarzenegger administration is considering an ambitious bond program to fix freeway bottlenecks, improve access to cargo ports, shore up Delta levees, upgrade water facilities and quake-proof hospitals.

But the state first should get its cash flow in order, says Campbell, who's on leave as state finance director to promote Prop. 76. "We'd go to the market with a substantially better balance sheet and bond rating if 76 passes," he says. "That means lower interest."

Bonds aren't paid off with Monopoly money, however. The state already is spending roughly 5% to 6% of its general fund this year — depending on who's figures you use — on debt repayment. That's $4 billion-plus.

(snip)

If he's going to pare back spending growth, not raise taxes, help poor people and build more stuff, something must give. ...

[calcowgirl]

"Look, we don't have enough money to build hospitals, … freeways, bridges. We need more energy. We need to make sure we have the cleanest environment…. We need more water, we need more of everything. And more affordable housing, which is the biggest problem of all."

[PRND21]

LA times says NO
Unions say NO
CA Dems say NO
FRingers say NO...

Yes

[ElkGroveDan]

And more affordable housing, which is the biggest problem of all."

...and not the responsibility of government.

[calcowgirl]

Ping.

Bit by bit, Campbell is revealing the hidden agenda. Don't worry about deficits, don't worry about debt... only worry about "cash flow."

But the state first should get its cash flow in order, says Campbell, who's on leave as state finance director to promote Prop. 76. "We'd go to the market with a substantially better balance sheet and bond rating if 76 passes," he says.

The balance sheet reference is interesting. I assume he is referring to changing the short term obligations to long term debt? (i.e. the expense deferral and issuance of additional bonds to payoff prior Prop 42 transfers)

[calcowgirl]

...and not the responsibility of government.

But the lifeblood of many of his donors.

[SierraWasp]

I don't know about the others, but I've never ringed an F in my long life!!!

How about you other FReepers? Ever Ringed and F???

[SierraWasp]

Yeah... They're really worried about the bond rating!!! With it as low New Orleans they're gonna start having trouble justifying the extreme cost of issuing ANY new bonds!!!

Governmentese for what the private sector calls "cash flow," is "revenue stream!" Poor moderate milktoast Campbell with his pointy academic head can't even remember which sector he's referring to!!!

Oh, I know you've thought highly of him, Carry Okie, but I never have!!!

[FairOpinion]

Exactly. If one knew nothing, but took a look at who is opposing and who is supporting the propositions, the decision is easy. The Howard Jarvis Taxpayers Association is supporting them too.

Dean urges voters to reject measures governor supports [California]
CA: Feinstein to oppose Schwarzenegger's special election initiatives
John Alden (Marin cnty Dem Party chariman): Vote no on Prop 76 - we need better leaders
McClintock's recommendations for CA Propositions
Summary of Recommendations on the CA Propositions by various organizations and parties
CA: McClintock stumps for governor's ballot initiatives

[goldstategop]

George Skelton's an old L.A Times Lefty, but he has a valid point. Prop. 76 will lead to more borrowing. And Arnold's argument is not only confusing, its downright dishonest. Either you cut spending or you spend more. But you can't do both at the same time.

("Denny Crane: Gun Control? For Communists. She's a liberal. Can't hunt.")

[goldstategop]

We'll cook the books. The local paper here ran a story yesterday on how CALIPERs underestimated the extent to which taxpayers would be on the hook for fattened pension benefits. And we're supposed to trust the people that sold us a mountain of debt that this time they'll go cold turkey. Hey that's not what Tom Campbell says! In fact, he says just the opposite. So then, following the logic of his argument, why should voters approve Prop. 76? So the politicians can get us into more debt? Thanks but no thanks.

("Denny Crane: Gun Control? For Communists. She's a liberal. Can't hunt.")

[PRND21]

Good links!

[calcowgirl]

All a conservative has to do is listen to the campaign manager to conclude one should vote NO. In addition to the quotes in the above article, here are a few more.

"The key is not to crank government spending down," said Tom Campbell, Schwarzenegger's former finance director, who left the post to campaign for the initiative. "It's just to spend no more than we have."
San Diego Union-Tribune, October 21, 2005

But Campbell said he has looked forward starting in 2006, which is when the measure would take effect, and doesn't believe that the cap would have an impact on state spending until 2013. "That's because we start with three good years of revenue behind us," he said. "It completely depends on what year you start."
San Francisco Chronicle, October 22, 2005