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The Governor's Reform Agenda: Is it Class Warfare?

As the charges fly between Gov. Arnold Schwarzenegger and the education lobby about who's the bigger liar on school funding levels, the real agenda sits buried just underground. It's a land mine waiting to go off.

The agenda - a chain of connected items - includes sharp reductions in the political clout of public employee unions, long-term reductions in school funding, constitutional spending caps for all programs and the additional long-term political power, particularly in budgeting, that two pending ballot measures would give the governor, fiscal conservatives and their corporate backers.

The ballot measures are LWOM, the California Live Within Our Means Act, and Lewis Uhler's initiative to eviscerate the political clout of public employee unions by curbing the use of dues for political campaigns. Both are likely to qualify for the November special election that Schwarzenegger threatens to call.

Together, they're a microcosm of the "starve the beast" agenda of Grover Norquist, the powerful head of Americans for Tax Reform who has been driving the national conservative movement since the early 1990s. Norquist was one of the sponsors of Proposition 226, the "paycheck protection" measure that California voters narrowly rejected in 1998.

Like Uhler's proposal, Proposition 226 would have required unions (in that case all unions) to get each member's written consent annually before they could use any part of his or her dues for political purposes. Schwarzenegger hasn't officially joined up with Uhler, a former John Bircher, co-author of a failed 1973 spending limit initiative and for a time a member of Ronald Reagan's administration in Sacramento, but he's not shy about publicly ogling Uhler's proposal.

But if Uhler's initiative is simple and direct, LWOM is a complicated piece of legislation of many parts - a Rube Goldberg budgeting machine - that even its sponsors acknowledge contains serious legal and drafting uncertainties.

What seems not at all uncertain is that it would put an automatic damper on future spending and reduce long-term school funding by some $4 billion a year below the minimum level currently guaranteed by Proposition 98 that voters approved in 1988, a level that even now leaves California's per-pupil spending well below the national average.

LWOM also provides that whenever two-thirds of the Legislature can't agree on a budget by the constitutional deadline, or when the governor vetoes the budget act, the prior year's spending levels will automatically be extended, regardless of whether they're insufficient, excessive or simply unnecessary.

That will give conservative political minorities even greater power to extract concessions from the majority and increased incentives never again to vote for a budget, thus making it possible that spending levels in a rapidly growing state would be more or less frozen indefinitely.

LWOM also would allow the governor unlimited discretion to cut whatever he wished during the course of a fiscal year at any time that he decides projected spending exceeds projected revenues and the Legislature fails to get a two-thirds majority to bring spending and revenues into balance.

Former Gov. Pete Wilson, now a frequent voice in Schwarzenegger's ear, unsuccessfully pushed a similar measure, Proposition 165, in 1992. Wilson was also a lead sponsor of Proposition 226, which Norquist saw as a chance, as he once said, to "crush labor unions as a political entity." The combination of the two new initiatives may not be class warfare, as some of its opponents charge. And, as the backers of LWOM claim, California's is a broken and incomprehensible system that's undermined fiscal discipline, driven up deficits and defied rational policy making. The prison guards and other public unions, said Bill Hauck, one of the authors of LWOM and a veteran of countless reform attempts, have "locked up this Capitol so tight" that it's hard to make any changes.

But LWOM and Uhler wouldn't break the locks. They'd just change them and give the keys to a different crowd. The combination of constitutional budget cap formulas and autopilot default provisions for extending prior year spending would further reduce any chance to get legislative accountability and transparency in state government.

And as Legislative Analyst Elizabeth Hill said months ago, it would replace the (not very effective) Proposition 98 up escalator for school spending with the different but no more comprehensible autopilot system setting spending limits. It would be a heavy chain on the door to better schools, community colleges, health programs and other services that a modern society depends on.

Worse, LWOM is based on some false premises. California is not a high tax state; general fund school spending, which has risen more slowly in recent years than the budget as a whole, and which remains low, has not been driving the deficits.

More important, these two reforms don't address the vastly more complicated dysfunctions of government. Hauck says, "You have to start somewhere." But these starts smack more of Norquist's ideology and Wilson's 10-year-old hatred of the teachers unions and his gubernatorial frustrations than of any serious attempt to fix the system.

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