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PAYING FOR CALIFORNIA

The independent

June 15, 2008|Jim Newton | Jim Newton is the editor of The Times' editorial pages and the author of "Justice for All: Earl Warren and the Nation He Made."

Arnold Schwarzenegger is not the first California governor to face a difficult budget. Earl Warren, Pat Brown, Ronald Reagan and Pete Wilson also confronted deficits and had to make tough political choices. The following articles, commissioned by California Forward, a bipartisan group that seeks reform of the state budget process, show how they balanced the books.

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It is both difficult and easy to imagine how Gov. Earl Warren would address California's present budget troubles -- difficult because Warren governed in a period of extraordinary growth, allowing him to preside over a vast expansion of state services without many setbacks; easy because few of Warren's successors have more closely emulated his leadership than the current occupant of the office.

Warren came into office soon after America's entry into World War II and initially presided over the dizzying reconstruction of its economy to war footing. That growth resulted in rapid increases in state tax revenue, allowing Warren to lower the top income tax bracket and reduce sales, bank and corporate taxes -- the first such cuts in California history. He also increased spending for education, corrections and other programs, and still logged a surplus, part of which was set aside for a "war catastrophe fund," to be used if, as many feared, California was attacked.

As a lifelong Republican, Warren was sensitive to his party's desire for lower taxes, but he was determinedly independent -- a "party of one," some liked to say -- and that was reflected in his tax policy as well. He pressed for social progress, even when it was expensive.

On Oct. 17, 1944, Warren was diagnosed with a kidney infection. During his long incapacitation -- he did not return to the office until nearly Thanksgiving -- he reflected on the vulnerability of middle-class Californians to medical catastrophe. In January, he proposed a system of universal healthcare for Californians largely paid for by employer and employee contributions. He labored hard to force the matter out of an Assembly committee but then lost on a 39-38 floor vote. As Gov. Arnold Schwarzenegger discovered last year, there are powerful forces arrayed against progress in healthcare.

Warren was more successful on another far-reaching matter for California: increasing the gas tax to pay for road and highway construction. Again, conservatives opposed him, but this time, he prevailed. That tax hike of 3 cents a gallon came over the furious objections of oil companies -- some threatened to shut down their operations in California if it passed -- but ultimately paid for the highway system that was essential to the state's economic development.

California's economic health continued through Warren's tenure, bolstered by immigration that brought the new taxpayers flowing into the state and by the emergence of the aerospace industries along the West Coast at the end of the war. When Warren resigned in 1953 to become chief justice of the United States, he left behind a huge and healthy economy: He had inherited a shortfall and left a surplus; wages had soared -- a hotel maid who earned $19 a week in 1940 earned about $45 a week by 1953; the state's highways carried about 2.9 million cars in 1943 and about 5.9 million when Warren stepped aside.

"Where on Earth," he asked in his farewell address, "have so many new people been integrated into a commonwealth in so short a period of time?"

Schwarzenegger's challenges are different from those faced by Warren. But his administration bears unmistakable signs of Warren's experience. The healthcare plans of the two governors were amazingly similar. They both generally opposed tax increases but accepted some as necessary. Both cultivated allies among Democrats to get their programs passed. Both recognized the state's vulnerability to the vagaries of the economy, and sought to offset them with a "rainy day fund."

Warren was a more nimble politician and better handled the conservative elements of his own party. As a result, he got his fund, while Schwarzenegger continues to fight off skepticism of his. But on matters of the budget as well as other priorities, they are best appreciated as champions of the center, undeterred by the mewling of more partisan politicians. At his best, Schwarzenegger is very much like Earl Warren.

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