The Terminator unplugged

Just a few weeks ago, in late June, the governor and Democratic legislators were well on their way to an on-time budget, the first in years. The Demos were being “fantastic,” Schwarzenegger exulted. But then his own Republicans derailed the deal. They didn’t like the level of funding for the schools and programs for the poor, as well as that for local governments. Unwilling to buck members of his own party, Schwarzenegger did a switcheroo virtually overnight and began chiding the Democrats as “children” who needed a “time out” and, later, “girlie men” too weak to do the work of government.

This is not leadership, it’s flailing. Confronted with his first great challenge, getting a budget through a dysfunctional state government, Schwarzenegger doesn’t know which way to go. The Republicans have stymied the process, but he’s calling the Democrats names.

Let’s hope this lesson sinks in. There’s no way, with the current system, that the governor can stop the cycle of borrowing to balance the budget without new taxes. Minor and temporary hikes in the top income tax rates, such as those used during the Wilson administration, would suffice. And Schwarzenegger could then use the hikes as an object lesson in the need for top-to-bottom reform of the state’s fiscal house.

Contrary to myth, California is not an over-taxed state. In fact, rather than going up, taxes have been cut by a cumulative $12 billion in the last five years, including the car tax. California now ranks 26th in its tax burden on citizens, lower than those supposed havens for tax-weary Californians, Utah, Arizona and Idaho.

There is a way to finance the services Californians want and need and to streamline the process, but it will require real leadership. Gov. Schwarzenegger still has the clout, but will he use it?