The day he took office, Gov. Arnold Schwarzenegger commanded popularity enough to persuade California's voters to swallow the harshest fiscal medicine.
The tragedy of his governorship is that he never used it.
The roots of the state's dysfunction were well known in Sacramento in 2003, when Schwarzenegger took office, and still are today: It's too easy to enact spending programs by ballot initiative, too hard to get the required two-thirds vote of the Legislature to pass a budget and impossible to keep talented legislators around when they're rapidly turfed out by term limits.
The tax structure bequeathed us by 1978's Proposition 13 is lunacy; it places too much emphasis on the personal income tax, which frustrates the wealthy and the entrepreneurial class, and on the sales tax, which hammers the working class.
The school financing system (also an offspring of Proposition 13) is even more nuts. It hamstrings local administrators by making them beholden to nostrums issued from Sacramento.
Everybody feels shortchanged in this state — rich and poor, employer and employee, student and teacher — and not without reason. This is the crisis Schwarzenegger was elected to solve, and he never laid a finger on it.
Why? Because these fundamental issues were not on Schwarzenegger's radar screen.
Schwarzenegger had some good qualities as governor and some sound instincts. Very early on he heeded the call to reform the worker's compensation system, though he probably didn't go far enough. His environmental initiatives met the most progressive standards, and we owe him gratitude for helping to fight off the mendacious Proposition 24 campaign to roll those initiatives back in November.
He understood the need for healthcare reform, even if he couldn't get it done. For the most part he didn't let braying right-wing Republicans (about all that's left of the GOP in California) move him off socially moderate positions on gay rights and similar issues.
Yet on the central issue of his tenure, fiscal reform, Schwarzenegger proved to be an action star with feet of clay.
Why is that? Perhaps the reason is that the state's persistent budget crisis is deeply interwoven with the flaws in its government structure, and untangling that mess requires both hard labor and imagination.
One might argue that Schwarzenegger's fundamental flaw as governor was his consistent lack of imagination. He didn't seem to see the irony in his coasting into office by attacking Gray Davis for borrowing to close a budget gap, then submitting an alternative budget that closed the deficit with a bond issue.
He could proclaim himself the sworn enemy of "special interests," yet deliver to the California Chamber of Commerce 100% of its legislative wish list in 2004.
It's not unusual for high-profile politicians to bask in their own self-esteem. But Schwarzenegger took this habit to extremes. That's unsurprising, since TV hosts and the out-of-state press treated him as a movie star even while he was failing at the mundane job of running a statehouse.
Once the TV cameras were packed up, the lights went dim in Chris Matthews' set and the out-of-state reporters filed their stories about motorcycle trips with the Governator, the hard work remained. To be an effective governor you have to suffer fools gladly, and absorb the sufferance of adversaries who think the fool is you. You have to spend half your life in the weeds of policy wonkdom and like it.
Signs emerged even during his first campaign that Schwarzenegger wouldn't be the kind of governor who took bold policy steps.
Shortly before the recall election, his handpicked economic guru, Warren Buffett, publicly made the point that Proposition 13 created tax inequities that cost the state money and sapped public confidence.
The Schwarzenegger juggernaut had already built up such a head of steam that it's doubtful it could have been derailed had he agreed that some aspects of Proposition 13 needed to be on the table. Instead, he publicly slapped Buffett down.
Plainly he never imagined how briefly the window of public adoration would stay open for him. His tendency to personalize policy disputes and his preference for conventional solutions helped slam it shut.
In his second year in office Schwarzenegger concocted for the November 2005 ballot a slate of four ballot initiatives ostensibly aimed at promoting fiscal responsibility. But only one dealt with the state budget process — a perfectly conventional mandated spending ceiling — while two were aimed vindictively at schoolteachers and public employee unions. All were defeated.
It was his worst rebuff until May 2009, when he put five fiscal initiatives on the ballot, including a couple of impenetrable tax measures. They all lost by huge margins. (A sixth punitive measure aimed at the state Legislature passed.)
