Thanks to a grassroots campaign that gathered more than a million signatures from registered voters, the state of California will hold a special election October 7 on whether to recall Democratic Gov. Gray Davis. Despite all the media hype, there is no guarantee that the recall will be approved.
Here are ten good reasons Californians should pull the plug on America’s worst governor.
Very Questionable Fundraising
Last year, Republican gubernatorial candidate Bill Simon ran television spots during his campaign against Davis in which average Californians were depicted approaching Davis’s secretary. Each asks to speak to the governor and is turned away in favor of a shady man bearing a briefcase of cash. Finally, a small boy approaches with his piggy bank. The secretary takes the bank, holds it up and shakes it, and tells him, “Keep saving, kid.”
The ad may actually have been an understatement.
In January 2002, Davis signed off on an astounding 34% pay increase for state corrections officers. Just weeks later, the prison guards’ union contributed $251,000 to Davis’s campaign. Their contribution, argues former state GOP chairman Shawn Steel, “bought the prison-guard union of 26,000 a billion-dollar pay increase over the next six years.”
In April 2003, Davis revisited prison spending in the light of the state’s $38-billion budget crisis. Rather than pare down the astronomical pay hike, Davis cut training for corrections officers by one-fourth, from 16 to 12 weeks.
In June, the San Jose Mercury News reported a complaint by two state prison investigators that Davis was trying to close the prison internal affairs office in Rancho Cucamonga, even as internal affairs was investigating allegations of savage beatings against shackled prisoners. Legislators-including some liberal Democrats-are fighting the closure plans, which they see as an obvious favor to the union. The governor has portrayed the closing as a cost-cutting measure to save $1 million. Last month, the FBI got involved in the prison investigation.
The 330,000-member California Teachers’ Association, on the other hand, received very different treatment when it failed to pay up. CTA President Wayne Johnson told the press in May 2002 that during a policy discussion in the governor’s office months earlier, Davis had pressured him to collect $1 million from union members and donate it to the governor’s re-election campaign. “Davis hit us up two or three times for a $1-million contribution,” Johnson told the San Francisco Chronicle. The union did not make the contribution, and Davis refused to back their demands for expanded collective bargaining rights regarding school curricula and textbooks. They did not get them.
Davis’s top political advisor insisted at the time that there is “never a connection between contributions and policy.”
The Chronicle reported May 2, 2002, on another controversy involving the California Public Employees Retirement System (CalPERS). Wealthy Democratic fundraiser Richard Wollack and the huge commercial real estate firm of which he is director, CB Richard Ellis, made $25,000 in direct contributions to Davis. Wollack also hosted a $2,500-a-head Davis fundraiser featuring former Vice President Al Gore. Simultaneously, CalPERS-whose executive board consists of prominent Democrats, some of them Davis appointees-decided to invest $100 million of the state pension fund in Premier Pacific Vineyards, which Wollack co-founded and where he serves as co-CEO. The Chronicle reported that it was the first time CalPERS had ever invested in an agribusiness.
Bungled Energy Strategy
A combination of bad luck, incompetence, and greed doomed California’s experiment with electricity deregulation, but it didn’t have much to do with the universal media scapegoat, Enron.
On the bad luck side, a drought reduced the amount of hydroelectric power available from the Pacific Northwest. A natural gas shortage later forced some utilities to demand higher prices to meet their expenses and keep the power coming.
Also, California’s stringent environmental regulations, which make it nearly impossible to build new power plants in the state, made the state energy-dependent, leaving the door open for just such a crisis.
But it was Gov. Gray Davis who signed off on $42 billion in vastly overvalued energy contracts in 2001. And it was Davis’s state energy traders who arranged for the state to pay prices for energy that were well above market.
State Sen. Tom McClintock (R.)-then an unsuccessful candidate for state controller and now a gubernatorial candidate-sued last May to invalidate the contracts based on one negotiator’s blatant conflict of interest. Vikram Budhraja, a former senior vice president with Southern California Edison, was retained as a consultant to Edison International even as his firm was contracted by the state to negotiate California’s power deals with Edison’s subsidiaries.
After the sweetheart deals were made, Edison’s stock surged. Among the beneficiaries was Budhraja, who bought Edison stock days after his consulting company received its contract to negotiate the state rates. He sold the stock eleven days later at a 40% profit, according to the Los Angeles Times. Budhraja’s financial disclosure forms indicate that he received more than $100,000 from EI while his state agency negotiated with them.
State Attorney General Bill Lockyer (D.) refused to join the lawsuit, citing the fact that Budhraja had recused himself from some of the energy deals.
Davis and some of his California apologists-including the members of the California Public Utilities Commission-are still blaming power suppliers and traders for “manipulating” the market and withholding power capacity. But the California Independent System Operator challenged this theory in a credible rebuttal last October. Moreover, even if the Davis defenders are right, it does not change the fact that Davis’s administration approved contracts for ridiculous prices.
The state’s negotiators shocked one energy trading manager at the Bonneville Power Administration in Oregon, who was quoted in the Wall Street Journal in March 2001. “They agree to prices that make you wonder,” he said. “You’d at least think they’d check to see what the prevailing price is before throwing out their offer.”
It also does not change the fact that Davis had the power to remove caps on residential energy prices, but failed to do so for purely political reasons. He thus removed economic incentives for both conservation and increased energy production. The San Francisco Chronicle recently defended Davis’s handling of the crisis by arguing “there was no public will to raise rates for consumers.” But this misses the point entirely. Instead of making residential consumers pay market prices for their own electricity-a move that could have cost him politically-Davis instituted random, rolling blackouts that created chaos and severe economic damage in many parts of the state. His failure to remove the residential energy price caps also meant that electricity rates had to be raised on businesses, further harming the state’s tax and employment base.
Budget Deficit Deception
“California is not suffering a revenue shortfall. In the first four years of this administration, revenues have increased 25% while inflation and population combined have grown only 21%. The problem is that [general fund] spending has increased 40%.”
These words are McClintock’s, and they provide the only explanation anyone needs for the $38-billion state deficit that was recently resolved through borrowing and budget trickery. The problem is a liberal state legislature and Gray Davis, who has repeatedly signed off on wild, irresponsible spending increases.
Davis signed the state’s 2003 budget on Sept. 5, 2002. That budget only wiped out that year’s $23-billion shortfall through similar accounting trickery, but it was crucial to Davis’s hotly contested re-election campaign that he sign it and showcase purported spending “cuts.” In reality, the tough decisions about budget cuts were put off until after the November 5 election.
Asked that day whether he would raise taxes after the election, Davis ducked. “I have no expectation one way or another,” he said.
Just three months later, Davis announced that the budget deficit was actually $34.8 billion-roughly half the size of the state’s general fund and more than most states’ budgets. He then began drawing up plans to raise taxes.
On September 27, Davis’s 2002 opponent Simon had predicted a $20 billion deficit for 2004. “We will soon, I predict, be looking back at the days when that $10 billion budget projection for next year’s deficit will look good,” Simon said, referring to an early fall prediction by the state’s legislative analyst.
Davis responded by lashing out at Simon and other conservative doomsayers as “wrong.”
Then, in mid-November, after the election, the Legislative Analyst predicted a $21 billion deficit. A month later, Davis finally came clean about the budget mess with an even higher number, fueling suspicions among many that he knew what was up all along.
Former Republican State Assemblyman Howard Kaloogian wryly commented in a March 2003 op-ed, “There has never been a deficit in the Davis campaign contribution account.”
Job-Killing Family Leave Law
Davis signed California’s unique paid Family Leave law last September (just before his narrow re-election). This law, which goes into effect next July, allows workers to take up to six weeks of leave with 55% pay, capped at $728 a week. The law’s guidelines are very lax: A worker could conceivably take a few weeks off, with pay, when a minor illness strikes another family member.
A fee imposed on all workers will finance the program. Business owners are jittery at the prospect of mass paid absenteeism. If many employees take full advantage of the provision, California employers will be forced to spend millions training temporary replacements, providing another good incentive for business to move to Arizona or Nevada.
Taxpayers will also take a hit. Given its record in making budget forecasts, there is little reason to credit the Democratic legislature’s estimate that the program will cost $117 million per year. The state’s Economic Development Department is assuming it will cost $600 million per year, and the California Chamber of Commerce has warned it may carry a $1 billion per year price tag.
Business-Destroying Workers’ Compensation Law
In February 2002 Davis signed a bill increasing maximum weekly workers’ comp benefits from $490 to $602 a week. By 2007, it will climb to $840, meaning that injured workers will be able to collect the equivalent of $44,000 per year for not working.
Davis had vetoed similar increases three times in three years-but 2002 was an election year.
Because of Davis’s law, the premiums employers pay for workers’ comp insurance are skyrocketing for California businesses. The Alameda Times-Star reported last week that workers’ comp in California is expected to cost public and private employers $29 billion, three times what it cost in 1995. And that is despite a drop in statewide claims.
One national company, Costco, blamed California’s workers’ comp rules for its weak earnings performance this year: the company has only one-third of its workers in the Golden State, yet they account for two-thirds of its workers’ comp costs.
In an interview with the San Jose Business Journal, state insurance commissioner John Garamendi (D.) recently said, “I think the workers’ comp system will collapse if we don’t reform it. . . .Virtually every business in the state is being clobbered by worker’s compensation cost increases. It’s a serious economic problem for the state.”
Now, facing the wrath of business owners, Davis has begun talking about revisiting his own terrible legislation by capping medical costs for injured workers-ignoring the obvious problems of excessive liability and the unjustified doubling of benefits.
State Sen. Chuck Poochigian (R.) of Fresno told the Sacramento Bee that Davis’s new plan “falls woefully short by failing to address the most significant problems including skyrocketing litigation costs, over-utilization of the system and subjective medical claims.”
Driver’s Licenses for Illegal Aliens
Last month, Davis promised to sign a bill allowing illegal aliens to apply for California driver’s licenses. In September 2002, Davis had vetoed just such a bill, stating correctly that it could help terrorists attack America.
“The tragedy of September 11 made it abundantly clear that the driver’s license is more than just a license to drive; it is one of the primary documents we use to identify ourselves,” Davis said in a veto statement. “Unfortunately, a driver’s license was in the hands of terrorists who attacked America on that fateful day.”
Davis’s flip-flop on this issue is one of the more blatant examples of his pandering-in this instance, to the Hispanic community.
In-State Tuition for Illegal Aliens
On Oct. 11, 2001, Davis signed a bill to grant lower in-state tuition rates at California state colleges to illegal aliens who have attended at least three years of high school in the state. The regents of the University of California system followed suit instituting a regulation extending in-state tuition to illegal aliens in the state’s public universities.
The law clearly contravenes a 1996 federal statute that bars states from granting such privileges to foreign nationals if they are not also extended to Americans from other states. In fact, Davis had vetoed a similar measure in 2000, citing that federal law. This in-state tuition rule not only imposes an additional burden on California taxpayers, but also empowers illegal aliens to take spots at California state colleges and universities that otherwise would go to American citizens.
Cross-Dressing as Civil Right
Two weeks ago, Davis signed a bill imposing a heavy fine on employers who refuse to hire so-called “transgendered” persons-namely transvestites and transsexuals. Employers-including, for example, church bookstores-will now face fines of up to $150,000 if they try to fire or refuse to hire cross-dressers. The San Francisco Chronicle reported that in Davis’s new law, “Gender is defined as a person’s identity, appearance or behavior, regardless of whether that identity is the same as the person’s sex at birth. Employers would still be able to use dress codes as long as workers are allowed to dress as the gender they prefer.”
The law follows the one Davis signed in October 2001 under cover of the recent terror attacks, granting many of the rights of marriage to homosexual partners, including the right to adopt a registered domestic partner’s children. Many conservatives have argued that this law represented an end run around Proposition 22, which stated that only marriage between a man and woman is valid in California. Prop 22 passed in 2000 with 61% of the vote. To further shore up his support from the gay-rights lobby, Davis may go further in eroding Prop 22 by signing a bill (AB 205) that essentially guarantees all the rights of marriage to registered homosexual couples.
Killed Proposition 187
In November 1994, 59% of California voters enacted Proposition 187 to deny state-funded education, welfare benefits and non-emergency health care to foreign nationals illegally in the United States.
U.S. District Judge Mariana Pfaelzer, however, ruled the initiative unconstitutional in 1998. Republican Gov. Pete Wilson appealed, seeking an eventual showdown in the U.S. Supreme Court. But Davis opposed Prop 187, and when he took office he asked the famously liberal San Francisco-based U.S. Court of Appeals for the 9th Circuit to “mediate” the case between the state, which he now governed, and anti-Prop 187 activists. The proposition’s supporters-59% of the state’s voters-had no voice in the process. Davis “negotiated” a deal with the proposition opponents to drop the appeal and essentially nullify the law.
As a result, the cost of social services for illegal aliens continues to drain funds from the state and from local governments.
Tripled the Car Tax
In June, Davis illegally tripled the state’s car tax by executive order.
State law allows the state controller-not the governor-to raise the car tax, but only on a month-to-month basis, and only if the state lacks the cash or financing to reimburse local governments for lost revenues. Even then, the tax hike can only be for the exact amount that the state needs to reimburse local agents.
None of those conditions were met in this case: the governor hiked the tax indefinitely to the tune of $4.2 billion this year, even though the state does have the cash on hand to reimburse local governments.
Republicans, led by McClintock, are already challenging this power grab in court, and encouraging taxpayers to save their receipts for a refund next year.
With Davis’s hike, the average household will now pay the state $390 each year-up from $127-for the privilege of owning a car, according to the state Department of Motor Vehicles.
On August 12, Davis suddenly did an about-face and called for a repeal of his own illegal tax hike. “I never intended for this burden to fall solely on the motorists of California,” he said, as if he had not known who would be paying the car tax.
Davis’s change of heart is easily explained: the increased car tax will be due almost simultaneously with the recall election-and almost every California household owns at least one car.
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This special supplement originally appeared in the August 18 print edition of HUMAN EVNETS and was prepared by HUMAN EVENTS Assistant Editor David Freddoso, who reported on Gray Davis during the 2002 campaign, and by veteran HUMAN EVENTS Political Editor John Gizzi, who has been covering California politics for over two decades.