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"We have a chance to fix this once and for all"

March 24, 2009 |  8:38 pm

Arnold Schwarzenegger, Karen Bass, Dave Cogdill, Darrell Steinberg, Mike Villines, budget, elections, May 19

Making their pitch for the six measures on the May 19 special election ballot, Gov. Arnold Schwarzenegger and four state lawmakers visited the Times editorial board Tuesday.

With the governor were Assembly Speaker Karen Bass of Los Angeles and Senate President Pro Tem Darrell Steinberg of Sacramento, both Democrats; Assembly GOP Caucus leader Mike Villines of Clovis; and immediate past Senate Republican caucus leader Dave Cogdill of Modesto. Cogdill's fellow Republican senators ousted him from his leadership post on Feb. 18 rather than back his support for the deal that created the state's current spending plan and shaped the special election.

Here is a partial transcript of the introductory remarks from the five. We'll post more of the discussion -- our questions and their answers -- later this week.

Gov. Arnold Schwarzenegger: Again, thank you very much for your time, and I want to thank my friends, the legislative leaders, for being here today with us. This is without a doubt I think the first time in history that you see the Big Five together and all in sync. I don’t think that you will remember any time in the past.  So, obviously this is very important to all of us, which is that to make those various different initiatives pass, the six of them that will be on the ballot May 19.

I think that we have done an extraordinary job together working over a period of several months working on this budget and these various different initiatives. But that's always half of the job, because the other half is obviously making it pass by the people. And it's no different than our infrastructure initiatives in 2006, where it was a bipartisan kind of an effort, the Democrats and the Republicans went up and down the state and they joined together in fund-raising activities, joined together also in campaigning for the initiatives. And because of that the people of California felt comfortable that both parties are working together and they won with overwhelming majority.

We hope this is the same case here. I think that budget reform is extremely important for the state of California because we didn't have it in place for so long – for decades. Every governor has gone through a huge ... crisis, if it is from Pat Brown to Ronald Reagan to Deukmejian, Pete Wilson, Gray Davis and now myself, where you always run out of money because the economy is going down, because we don't have a rainy day fund, because we always spend too much money when the revenues go up. So I think here we have a chance to fix this once and for all and have a rainy day fund for the first time in 60 years. I think that it's very important that these initiatives pass and we're basically here to just talk to you about it, answer your questions and get you to endorse the initiatives, because endorsements from major papers, especially the L.A. Times, is extremely important in supporting it to make it pass. {I'm going to] open it up, if my colleagues want to say something about any of that please feel free....

Speaker Karen Bass: I would just add in that as the governor laid out, we have this critical election on May 19 -- and in LA we're actually having an election right now -- so it'll be interesting. I am concerned about turnout, and I think it's very important that we do whatever we can to increase turnout.

Yesterday in Sacramento I hosted 55 African American ministers that were there to hear about the economic stimulus, and we talked about the May 19 elections so that they will spread the word in their congregations. A couple of the initiatives that would be a little counter-intuitive to a lot of people are the lottery, the money from Proposition 10 and Proposition 63, and so I think it's most important that we also educate folks about that –- that we need to securitize the lottery, we need to take the resources from Prop. 10 and Prop. 63. The LAO came out last week and talked about the potential $8 billion deficit. And so as I've been talking to people, I've been encouraging them to do the math. If there is a projected $8 billion, plus the initiatives go down, we're talking about a devastating $14-15 billion deficit that we would have to close at the end of May.

President Pro Tem Darrell Steinberg: I appreciate the opportunity to meet with the full Los Angeles Times editorial board and I am all-in when it comes to these initiatives, despite the fact that there are a lot of elements of the agreement that I frankly don’t like, and I think we can all say the same thing. But this was a negotiation about shared sacrifice.

I was the author of Proposition 63, the proud author, and put my heart and soul into the passage of that initiative. And the initiative is doing great things for a lot of people living with mental illness in California. And yet when it came time to make the hard decisions about how to resolve a $41 billion deficit, the largest in state history, what I think is important to note is that despite the stereotype, and frankly a lot of truth, about the Legislature and state government being dysfunctional, that the five of us were able to craft an agreement where everybody gave something, where everybody put the interest of the state ahead of their own ideology or their own programs. And it was a very, very difficult thing to do. But it was necessary. And these elections are crucial for a couple of different perspectives, and I’ll be brief, but I want to go through this.

Not only do we need the money in the short term; the lottery securitization, the Prop. 10 the Prop. 63 dollars but Prop. 1A, the passage of Prop. 1A, equates to about $20-plus billion additional revenue for the state  and for the investments that I know you care about and that we care about. Prop. 1A has to pass. If it doesn’t pass we not only lose the $9.3 billion ... [for] public education, but we lose two years of additional revenue. And when you add all that up it's over $20 billion. And finally, I would say that as a Democrat who believes that government plays an important role in improving the lives of people on their merits, I think Prop. 1A is a good idea because the state's revenue stream is volatile and we have to change it. But until we change it I would much rather, for the things that we care about, I would much rather have $10-12 billion in a reserve fund, in a rainy-day fund, so when the inevitable bad times occur, we don’t have to consider cutting foster care or medical or mental health, or any of the other safety-net programs that really matter to the most vulnerable. And so on the merits I favor Prop. 1A as well.

Sen. Dave Cogdill: Well just let me certainly echo the thanks that has been expressed by the governor and Democrat friends, to have the opportunity today to sit here and discuss this issue. Obviously these are extraordinary times, and I think that everybody recognizes that certainly this negotiation that led up to the budget agreement and the propositions that have been put on the ballot in many ways has been historic.

.... The governor’s very strong in coming out and talking about the four-legged stool that he wanted to construct as it related to a compromise on the budget deal that not only dealt with the short term but certainly, hopefully fixes this problem long-term so our children and our grandchildren aren’t faced with these same awful decisions whenever our economy takes a downturn.

And that was certainly our goal when we went back to negotiate after the attempt was made to put out a budget with a [simple] majority approval on taxes and fees that ultimately didn't happen. And when Mike and I came back to the table our goal again was to try and find this comprehensive solution that reflected and met all of the goals that the governor set out, and I think we were able to do that. As Sen. Steinberg points out, there's a lot in this budget certainly not to like. And it isn't the budget that any of us, I think individually, if you'd have asked us to sit down and craft our idea of the perfect budget, it doesn't represent that. But it does represent, again, what I think is a historic compromise that used a lot of different components and potential solutions to ultimately solve both the short term and the long term problem.

And again, that's why the initiatives are so important, as Darrell pointed out. They deal with the short term issues of Prop. 10 and 63 and the lottery, the monies that that brings to this year's budget, and then also provides the discipline that has been lacking as it relates to windfalls that come to the state periodically when our economy is doing well and make sure that we put that money back so that when we do go through another downturn we don't have to face the awful specter of either huge cuts in spending or tax increases or some combination of those things that nobody likes.

And I think the most important thing when you look at the 1A piece of this, and what really convinced me that it was the way to go, is if you look at the modeling and realize that if we'd had it in place over the last ten years, having gone through both the dot-com boom and the housing boom, we'd have put enough money aside that when this economy turned down the way it did we'd have had a much smaller problem to deal with, and one that we could have done, I think, through just some economies and spending rather than have to face the awful reality of the need to raise revenues in a struggling economy.

So, again, I don't think we could over-emphasize how important those propositions are in both the short term and the long term and hopefully get people to realize when they're criticized for not going far enough from someone on the right again [that] it's a compromise that can pass, and I think will have the support of the voters ... at the polls in order to be successful, and more importantly over time will accomplish what we want to accomplish.

Assemblyman Mike Villines: I’m Mike Villines and I think everyone has said it really well. I would just say that, first of all, I think all the comments are important and I agree with most all of them. The key to me is that I think that California in many ways has become dysfunctional, and this is an attempt I think to really bring some sanity back to budgeting and some fiscal discipline to the state without casting blame. I just believe that these reforms, all of them, in terms of the short term, as Dave and Darrell and Karen and the governor have said, are important. And also the long-term, I mean the idea that we can put some restraint on spending but also some reliability for programs so that both sides can, I think, find a benefit is critical I think to our long-term success.

I also think that the governor has set up a very strong process and argument for reform in this state. First with redistricting last year, [which] I think is important to changing ... the legislature, now we have the chance at a spending cap that I think the Republicans have been fighting for for a long time that I think is a fair one for both sides. And again I always tell my friends on the other side of the aisle, I think reliability, maybe not as much, but the idea that basing reliability in funding is much better to plan for now than what we're going through now or what we did five years ago. And, if we don't have this, will happen again in three years or four years.

So to me it's a long term perspective versus a short-term perspective. I think for the state it's good to look long-term and that these initiatives all fit into a better, longer-term view of the state, a more optimistic view. So I think California's going to look at it and say that they agree. We've all had to make some significant trade-offs and concessions, but the situation demanded it. And nobody could go to their corner, and I think everybody had to give. And I give the governor and my colleagues a lot of credit for all of us trying to come together.

Photo: Ken James / Bloomberg News

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