Schwarzenegger Won't Rule Out Tax Hikes

Arnold Schwarzenegger declined last week to rule out tax hikes as he campaigned to replace California’s Democratic Gov. Gray Davis in a special October 7 recall election.

At an August 20 press conference, Schwarzenegger was asked if he would rule out raising taxes in all circumstances. While stressing his revulsion at California’s high tax rates, he wouldn’t rule out raising them himself.

“I think that I am very, very much a believer that our people here in this state have not been under taxed, that the government has overspent,” he said. “Having said that, it is clear that you can’t ever say never. Because we can have, you know, next year an earthquake. We can have a natural disaster. We could have a terrorist attack or something like that. So we can never say never, no.”

Schwarzenegger did, however, “say never” to cuts in education spending, which accounts for 46% of California’s budget this year, according to the state Legislative Analyst’s Office. That promise came just days after the movie-star candidate met with the leadership of the California Teachers’ Association. It casts serious doubt as to whether he will be able to balance the state’s budget without hiking taxes.

Lewis Uhler, the longtime California-based taxpayers’ advocate who serves as president of the National Tax Limitation Committee, told HUMAN EVENTS that Schwarzenegger had not signed his group’s pledge not to raise taxes or fees. Conservative candidates Bill Simon and State Sen. Tom McClintock have both signed.

Americans for Tax Reform President Grover Norquist told HUMAN EVENTS that Schwarzenegger had not signed his group’s tax pledge either, and warned that such refusals nearly always mean a candidate plans to raise taxes eventually.

“A guy who says, ‘I’m a Republican, I could go either way on taxes’-he’s going to raise your taxes,” said Norquist. He pointed to the example of Alabama Gov. Bob Riley (see page 7) and Nevada Gov. Kenny Guinn (see July 28 issue), both of whom refused the pledge before the last election and have subsequently fought for tax increases.

Uhler warned that if Schwarzenegger tried to raise taxes, Republican state legislators might not stand up to him the way they stood up to Davis last month when he proposed an $8-billion tax hike.

“We have gotten them to be totally solidified behind the notion of no tax increase, and they’ve stood together on that,” said Uhler. “It is unfortunately the case throughout the country, whenever a Republican chief executive-be he president or governor-urges a tax increase, it fractures Republican solidarity.”

Schwarzenegger did say he would oppose any changes to Proposition 13-the landmark 1978 ballot initiative that keeps California’s property taxes in check. Liberal Democratic contributor and stock-picker Warren Buffet, one of Schwarzenegger’s advisors, suggested the week before that California property taxes are too low.