California Special Election: Schwarzenegger Will Consider Raising Taxes if Proposition 76 Fails – A FACT

UPDATE:

Dan Weintraub in today’s Sacramento Bee has If Proposition 76 fails, a tax hike could be next.

Read the whole piece here.

Schwarzenegger promised as a candidate in 2003 to balance the budget without raising taxes. He has reduced the gap between spending and revenues from about $10 billion when he took office to closer to $6 billion today. And he has proposed cuts that would have reduced the gap further had they not been rejected by lawmakers. Now he is telling voters he needs their help to finish the job. He needs the tools Proposition 76 provides if he is going to fulfill the pledge he made before he was elected.

By defeating Proposition 76, if that is what they do, the voters would be saying they don’t like his plans for balancing the budget and want him to move in a different direction. At that point, all of the options would have to be on the table, including a tax increase. That’s not a threat. It’s a fact.

Indeed.

California Gov. Arnold Schwarzenegger visits residents at the Villages at Cabrillo in Long Beach, Calif., Wednesday, Aug. 31, 2005, where he pressed for ballot initiatives set to go before voters in a Nov. 8 special election.

Sacramento Bee columnist and blogger, Dan Weintraub has Gov: Will consider taxes if 76 fails.

Gov. Arnold Schwarzenegger said today he would be forced to consider raising taxes if voters don’t pass his budget reform, Proposition 76, on the Nov. 8 ballo

Is this a surprise?

The California state budget has had structural deficits since Governor Gray Davis was elected and bankrupted the state.

Proposition 76 restores the authority that the Governor of California had between 1939 and 1983 to make mid-year spending cuts whenever spending outpaces revenue without having to return to the legislature.

Why is it trailing so badly in the polls?

I interviewed Schwarzenegger on KTKZ 1380 in Sacramento this morning and asked him if his reform proposal was his last shot at balancing the budget without raising taxes, as he pledged to do when he ran for governor in 2003. Schwarzenegger has said that Proposition 76 is a crucial piece of his plan to finish erasing the state’s structural budget gap, which has shrunk from about $10 billion to $6 billion since he was elected. But he’s never said what he would do if the voters decided they don’t want to give him the tools he says he needs. I asked him about that possible scenario.

Here is a transcript of the exchange:

Governor: “I think we have to understand, there’s only two ways to balance a budget. Theres only two ways to go. One is that we live within our means and that we only spend what we have, which is the way we should go, the responsible way. The other one is the way, the direction they are going right now, which is to spend more and more money and what they want to do is drive us into a corner so that they can raise taxes.”

Weintraub: “You’ve put the solution out there, you’ve put your answer out there. If it is not adopted, won’t you then be into that very corner and forced to consider —

Governor: “Absolutely. Absolutely. Then we have to look at raising taxes. Because this is the only option we have in order to create the money. This is why I tell people, vote yes on Proposition 76, and make sure that we do everything we can to pass this proposition so that we force our legislators once and for all to live within their means and not to continue spending money and to keep making promises to people that they can’t keep.”

California voters will have a clear choice this November.

Reform or Tax Increases.

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