As the Hollywood star best known for playing the Terminator and Conan the Barbarian, Arnold Schwarzenegger was elected governor of California six years ago to slay the deficit dragon that has been terrorizing the state for most of the past decade. But in his final budget proposal, on Jan. 8, Schwarzenegger, a Republican, struggled to address a $19.9 billion budget gap over the next 18 months, unveiling plans that include what he calls "draconian cuts" to social services. The man who used to be hailed as the Governator didn't reference any of his action movies to describe his battles with the deficit. Instead, he invoked a very different kind of movie: "The current tax and budget system is cruel. It is cruel because it is forcing us to make a "Sophie's choice" amongst our obligations. Which child do we cut? Is it the poor one or the sick one? Is it the uneducated one or is it the one with special needs?"
Arnold's choice is clear: to protect the state's vaunted higher-education system. In the same week that Schwarzenegger revealed his budget proposal, which calls for deep cuts to health care, social services and public transit, he also proposed a constitutional amendment (yes, another amendment) that would guarantee that the state would spend no less than 10% of its general fund on public universities and no more than 7% on state prisons. In his State of the State address, he declared that the state's future economic well-being is dependent on education. "Thirty years ago, 10% of the general fund went to higher education and 3% to prisons," he said. "Today almost 11% goes to prisons and only 7.5% goes to higher education. What does it say about any state that focuses more on prison uniforms than on caps and gowns?"
Aides say the governor does not want his legacy to include a dismantling of the world's most acclaimed public-university system. Students and faculty, enraged at dramatic tuition increases and crowded classes, are near revolt, and the governor knows anger toward the UC regents and University of California President Mark G. Yudof could easily shift to Sacramento. Yudof dashed off a press release after Arnold's speech, declaring, "I am extremely pleased that the governor understands how vital it is to return the University of California and the California state university system to solid financial footing." But state senate Democratic leader Darrell Steinberg's assessment of Schwarzenegger's dedication to higher ed was less than glowing: "It would have been even a better speech six years ago, because during the governor's tenure, prison spending has increased 32% and higher education has declined 9%."
While Schwarzenegger's plan spares the state's four-year universities, K-12 schools and two-year community colleges get whacked, losing $2.4 billion in funding. And it remains unclear how prison costs can be contained. Schwarzenegger wants to privatize the prisons, but to do so, he will have to defeat the powerful prison-guard union. After years of stiffer sentences supported by politicians and voters, California's prison population has exploded to 170,000 inmates. Overcrowding is so severe that federal judges have ordered the state to reduce the prison population by 40,000 over the next two years. Health expenses for an aging prison population are the fastest-growing part of the state's budget.
Although Schwarzenegger insists he will not raise taxes, in his speech, he requested $6.9 billion in aid from Washington. This would not be a bailout, he said, but a demand for fairness. "When President Clinton was in office, California got back 94 cents on the dollar from the Federal Government. Today, we only get 78 cents back. But in the meantime, Texas gets 94 cents, Pennsylvania gets $1.07," he said. "And guess what New Mexico gets? $2.03." Without the additional federal money, Schwarzenegger said, he will again propose the elimination of CalWorks, the state's welfare-to-work program, as well as in-home services for the disabled and elderly.
"If the governor's proposed cuts go through, it will shred the safety net," says Jean Ross, executive director of the California Budget Project, a think tank focused on low- and middle-income families. A recent study by this nonpartisan group found that the state, now suffering 12.3% unemployment, has lost all of the nonfarm jobs gained during the recent economic expansion. Nonfarm employment rose from 14.3 million in 2003 to a peak of 15.2 million in 2007. By July, it had fallen to 14.2 million.
Assembly speaker Karen Bass, a Los Angeles Democrat, says she is "highly troubled" by Schwarzenegger's proposals for further cuts to a social-welfare system under severe strain. Unemployment in many urban neighborhoods tops 20%, and the number of homeless women and children is growing. Additional cuts to the foster-care system and increased caseloads for social-welfare workers will put children's lives at risk, according to Bass. "Last year's budget left the safety net on life support," she says. "Now the governor is talking about disconnecting the respirator."