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Arnold Wins Big on California Budget Propositions


“Trust me,” Gov. Arnold Schwarzenegger (R.-Calif.) told the state GOP convention in San Francisco two weeks ago. He was making the argument for his joint ballot proposals to float $15 billion in bonds and create budget caps and a state “rainy day” fund to rescue his debt-riddled state.

Last week, California voters did indeed demonstrate trust in their governor’s plan to conquer the state’s $22-billion-plus deficit. By 63% to 37%, they approved Proposition 57 allowing California to sell bonds for the first time in state history to slash debt. By 71% to 29%, they also approved Proposition 58, mandating a balanced budget every year without borrowing and creating a “rainy day” reserve for emergencies.

A third measure, Democrat-created Proposition 56, was defeated by a 2-to-1 margin. Backed by big labor and opposed by Schwarzenegger, it would have reduced the legislative majority needed to approve a tax increase from two-thirds to 55%. Approval of his bond measure was a tremendous triumph for Schwarzenegger, who had to overcome not only Democratic reluctance to embrace a balanced budget but also Republican doubts about allowing government to rely on spending borrowed money.

Many conservatives had been inclined to vote “no” on the bond measure and “yes” on the balanced budget initiative, but the text of the two initiatives legally bound them together. One could not become law if the other was not also approved.

“They are double-jointed and, with the governor’s full support, there was legislative agreement that both initiatives had to be enacted in order for either to become law,” Senate Republican Leader Jim Brulte told me during the state convention. “Democrats wanted the bond measure and Republicans wanted the balanced budget proposal.”

Because of this agreement, the final paragraph of Proposition 58 says that “this measure shall become operative only if the bond measure . . .is submitted to and approved by the voters at the March 2, 2004, statewide primary election.” A mirror clause was put into Proposition 57.

To be sure, some conservatives voiced dismay over the bond measure. Conservative State Sen. Tom McClintock advocated a no vote and bigger budget cuts to solve the state deficit crisis. Out of deference to Schwarzenegger, however, the state convention endorsed both 57 and 58 with little debate and most Republican elected officials supported them.

The governor also secured endorsements from Democratic U.S. Sen. Dianne Feinstein and Democratic State Controller Steve Westly.

The real impact of Propositions 57 and 58 on California’s sea of red ink will not be known for several years. What is clear is that Schwarzenegger–sporting a 61% approval rating–turned both measures from underdogs to big winners in just a month.

That’s what inspired the San Diego Union Tribune to dub him “the new King of California politics.”

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