Oaths of Arnold

This week: car-tax aftermath

The promise: During his campaign for governor, Arnold Schwarzenegger pledged time and time again that, if elected, he would repeal the “tripling” of California’s car-registration tax, set in motion during then-Governor Gray Davis’ stay of office. The 300-percent increase, an automatic tax provision built into California law, restores the state’s car-registration tax to higher levels if certain state revenue figures are not met. Just minutes after his inauguration on November 17, Schwarzenegger made good on his promise, rolling back the newly increased car tax of 2 percent to its previous level of .67 percent.

The new promise: Along with the fulfillment of one campaign promise came another, guaranteeing that city and local governments would not lose the more than $4 billion in revenue they stood to receive prior to the rolling back of the car tax. City and local governments rely on car-tax revenue to pay for police, firefighters, road maintenance, social services and public health. Without offering any specifics or even a timetable for reimbursement, on November 17, Schwarzenegger promised that cities and counties had nothing to worry about, stating, “I can guarantee you that we will not take money away from them. They need the money.” In his State of the State address on January 6, Schwarzenegger reiterated his pledge to backfill the missing payments, saying, “It would be irresponsible for the state to take that money away from counties and cities. That is why I acted to keep the money flowing for firefighters and police. They did not raise the car tax, and they should not bear the burden of its rollback.”

The play-out: Under repeated pressure from cities and counties to act on his promise, Schwarzenegger bypassed state legislators and ordered that emergency payments be made to cover lost car-tax revenue. Yet California’s local governments received only a small portion of the promised funding, and many local governments remained skeptical about whether they would ever receive the much-needed revenue.

The put-off: During the past month, Schwarzenegger campaigned throughout California, with a quick stop in New York City for a $500,000-a-plate fund-raiser, to drum up voter support for Proposition 57, a $15 billion bond measure, and Proposition 58, a balanced-budget amendment to the state Constitution, both of which were passed during the March 2 election. Assuring voters that these measures were not “new borrowing” and that it’s “just refinancing old debts,” Schwarzenegger said that if the public didn’t approve Proposition 57 and 58, police officers and firefighters around the state would lose their jobs because of inadequate funding, as local governments would face even larger budget cuts by way of the governor’s budget proposal.

The future: Whether you agreed with the repealing of the car tax or not, and with Propositions 57 and 58 for that matter, California is facing dire financial circumstances, and something needs to be done to provide city and local governments with much-needed revenue. But what’s not mentioned in the victory celebrations for Propositions 57 and 58 is the additional $4 billion debt our children will inherit because of our governor’s failure to account for a debt that he himself triggered. Then again, why pay for something now, when you can put it off until tomorrow?

Education update: Schwarzenegger’s newest plan to cut money from higher education is to implement a “dual admissions” program that would cut enrollment at University of California schools by 10 percent and reroute prospective students to the state’s community colleges. Though university officials have raised concern that students may not choose the program, given the governor’s proposed 10-percent tuition increase to UC undergraduates and 13-percent cut in financial aid, it looks like some will not have an option.