- The Washington Times - Thursday, May 21, 2009

California Gov. Arnold Schwarzenegger on Wednesday criticized his own constituents who this week overwhelmingly rejected tax increases to meet a massive $21.3 billion budget gap, highlighting the tightrope officials nationwide are walking in dealing with both hard economic times and the growing anger of the electorate.

Sixteen states already have raised taxes to shrink mounting deficits, and 17 others are proposing increases for next year, according to the Center on Budget and Policy Priorities, a liberal think tank that tracks fiscal issues. The increases come as the federal government is considering new taxes on items ranging from health care benefits to soft drinks to pay for President Obama’s agenda.

“When you ask them about the cuts, ‘Do you mind if we have to make an additional $6 billion in cuts?’ and it’s great, [voters] say, ‘No, no, no, no, no, not in education,’ ” said Mr. Schwarzenegger during his brief Washington visit before returning to Sacramento to deal with the budget crisis.

The Republican governor said voters who are livid over the state’s red ink object to cuts in programs and services such as health care and law enforcement.

But taxpayers, struggling in the flagging economy, are beginning to rebel, pushing back in nationwide anti-spending “tea parties” last month. In California, which already has raised its sales tax by one percentage point and levied new income and vehicle taxes to bring in an additional $12 billion, Mr. Schwarzenegger’s key revenue proposals went down in flames, defeated by a nearly 2-1 margin.

States from New York to Hawaii are proposing tax increases to fund basic state services. Wisconsin is considering several increases to close a $6.6 billion budget deficit, and Illinois Gov. Pat Quinn, a Democrat, has proposed a 50 percent increase in personal and corporate taxes to deal with an $11.6 billion deficit.

Republican see the tax backlash as an issue helping them heading into next year’s midterm elections. Just like 15 years ago, when voters swept scores of Democrats out of Congress, they see the GOP’s signature issue coming back to the fore.

“These fights presage a 2010 election that is looking increasingly like 1994,” said Grover Norquist, president of the Washington-based Americans for Tax Reform and a top conservative strategist. “Democrats will have blood all over their hands.”

Mr. Schwarzenegger said California voters delivered a “loud and clear” message, even as he warned that many do not understand the severity of the coming cuts, which he said will be “devastating to some people.”

” ‘Don’t come to us for extra help.’ That was the message,” Mr. Schwarzenegger said after a meeting with Health and Human Services Secretary Kathleen Sebelius. “And, you know something, I appreciate it when you hear that from the people.”

Californians on Tuesday rejected five of the six measures backed by the governor in a special election, including the creation of a state spending cap and a “rainy-day fund” that would also have extended unpopular income-, sales- and vehicle-tax increases enacted earlier this year for at least a year.

Other rejected measures would have provided $9 billion to the public schools and authorized the state to borrow $5 billion, to be paid back with future lottery revenues.

To close the California budget gap, funds for education will now have to be slashed by $5.3 billion, and $2.8 billion will be cut from health and social programs, the governor said. Mr. Schwarzenegger also said the state would move about 19,000 illegal immigrants to federal facilities and transfer more than 23,000 nonviolent offenders to local jails to cut costs.

“We saw loud and clear from the results that the overwhelming majority of people told Sacramento, ‘Go and do the work yourselves. Don’t come to us with your problems,’ ” the governor said. ” ‘We have to go and sell off our motorcycles and our boats and our cars, second cars, and shrink, and have yard sales and garage sales in order to make ends meet. You do the same thing.’ ”

The governor also blamed the state’s unique election process for the defeat of his initiatives. “If you look at the history of special elections in California, it appears to me that they don’t work. People just don’t like being told to go back to the polls,” he said.

California Senate President Pro Tem Darrell Steinberg, Sacramento Democrat, said voter rejection of the propositions reflects the fact that people are facing difficult economic times. He said he was prepared to return to the budget negotiating table immediately to deal with the budget crisis.

Opponents of the measures labeled the package as “flawed proposals.”

“The governor and the Legislature must develop budget solutions that put California on a real path to fiscal stability,” said Lillian Taiz, president of the California Faculty Association, told the Associated Press.

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