August 5, 2008 10:48 AM

Arnold Takes Action, But Is No Hero

The world's seventh largest economy - California - is held hostage by an inflexible minority of destructive Republican legislators. Due to an unusual and poorly explained clause in the California Constitution, passing a budget, with or without changing tax rates, requires a two thirds vote of the legislature, and just over a third of the legislature is composed of Republicans who have signed a no tax pledge. Indeed, they have pledged to run alternative candidates against anyone who breaks the pledge.

The press, and consequently, the public, simply blames the legislature for gridlock. In the long run, redistricting reform might make legislative districts more competitive and change matters, but in the short run, we simply have a mess.

Governor Schwarzenegger has tried to break the logjam with out of the box proposals - both bad, in my view, but at least he is trying to stay in his action figure role.

The first proposal, already partially implemented, involved laying off tens of thousands of temporary public employees (that is done), along with lowering wages and salaries of most of the remaining employees down to the Federal minimum wage. The stated goal is to save cash. Cash is not the problem.

The second proposal, floated today, is to increase our already high sales tax by one percentage point for three years, but couple it with constitutional limits on public spending that would keep spending below its current level. This is a fiscal conservative's wet dream - a temporary sales tax increase that hits the poorest hardest, and a permanent constriction in spending. Fortunately, nobody seems to like the proposal.

Stay tuned. Perhaps now that Arnold has broken his own no-tax pledge, he can promise to campaign against anyone who does refuses to join him.