Arnold and Gavin: Using the Deficit to Scare Us

arnoldgavinEveryone knows we’re in tough times with huge deficits – but there are few things more offensive than politicians using that to scare us. With the May 19th propositions sinking in the polls, Governor Arnold Schwarzenegger has threatened to lay off 1,700 firefighters during peak fire season if the measures fail. He’s even suggested that the state will have to “borrow” money from financially strapped cities and counties – which could burn another $80-100 million hole in the San Francisco budget.

San Francisco Mayor Gavin Newsom is also pushing scare tactics to get his way. With the Board of Supervisors poised to reject a profoundly unfair Muni budget, the Mayor’s Office has warned that this means the General Fund would have to absorb $30 million in costs – beyond its already monstrous deficit. Never mind that such a scenario could only happen if the MTA doesn’t work with Supervisors to craft a more equitable budget – as Board President David Chiu works to cut a deal.

Arnold clearly views the May 19th special election – most notably Proposition 1A – as his legacy before leaving office, and is using his waning political capital to get it passed. But the voters aren’t listening to a Governor whose approval ratings are in the mid-30’s, and now he’s desperately pushing scare tactics. Last week, Schwarzenegger warned that the state will cut $80 million from the state’s Cal Fire spending plan if the measures go down in flames. Arnold’s campaign committee has also shot a “Yes on 1A and 1B” TV commercial with firefighters – who say it will prevent mass layoffs.

But the facts get in the way of such scare tactics. California will be facing an $8 billion deficit even if all six measures pass, so a vote for those measures won’t stop most of the mass lay-offs. And if we zero in on Propositions 1A and 1B (which appear to be the Governor’s focus), their defeat won’t have an immediate impact on firefighters. Prop 1B deals with education funding that schools are already entitled to, and Prop 1A won’t affect this year’s revenues – since the tax increases will stay on the books for at least two years. Linking Props 1A and 1B with Arnold’s dire threats of laying off firefighters before the summer is not only offensive – it’s plain dishonest.

But then the Terminator outdid himself – by saying the defeat of Propositions 1A-1F will mean the state would borrow money from local governments to stay afloat. Under a proposition that voters passed in 2004, the state – in times of fiscal emergency – can borrow 8% of local property tax revenues (or $2 billion), which would have to be repaid with interest in three years. According to Mayor Gavin Newsom’s budget office, that would mean San Francisco could lose $80-$100 million this year – as it copes with a deficit that’s already half the General Fund. Other cities would likewise be devastated.

Having the state borrow money is just another Arnold tactic. He’s not willing to support taxing the rich (even though it polls well), or pushing an oil severance tax (although California is the only oil-producing state that doesn’t have one.) Borrowing money – and thus accruing monstrous debt – is what got us in the fiscal mess in the first place, besides Arnold’s slashing of the vehicle license fee in 2003. But Schwarzenegger isn’t being straight with the voters about this latest scheme. To borrow funds from cities and county governments, he will need two-thirds of the state legislature to support it. Given that we can’t get two-thirds to pass a budget or taxes, don’t expect the legislature to go along.

We expect a Republican movie actor to get his facts wrong, and shamelessly scare voters into passing regressive propositions. But in San Francisco, Mayor Gavin Newsom has endorsed a Muni budget with all the wrong priorities, then calls the Board of Supervisors “irresponsible” for challenging him, and makes dire predictions about consequences that don’t have to occur – if officials stop the political grandstanding and work together.

On May 6th, Board of Supervisors President David Chiu proposed a motion to reject the Muni budget – because it raises bus fares, cuts basic service, wastes valuable funds, betrays the public trust on Proposition A, and serves as a cash cow for other City agencies in the form of “work orders.” Chiu already had six of his colleagues sign on as co-sponsors (i.e., enough to defeat the budget), and by the end of a fascinating Budget Committee hearing Supervisor Bevan Dufty said he would be joining them as well.

In order to “de-politicize” transit policy, Muni is a separate City agency governed by seven Commissioners – all of whom happen to be appointed by the Mayor. But to provide a “check” on this practice, the City Charter allows a super-majority of seven Supervisors to reject the entire Muni budget. It’s never been done, but it’s a right the Board has. I had always assumed that if this happened, the MTA Commission would pass a new Muni budget that at least five Supervisors would support. But it turns out the MTA is not required to, and the Commission has not yet scheduled a meeting to respond to their budget getting dumped.

So what happens if the Supervisors reject a Muni budget, but the MTA does nothing? The City Charter would require the General Fund to absorb Muni’s costs – which the Mayor’s budget office says would be $30 million. Now Mayor Gavin Newsom is using this to paint the Supervisors as “irresponsible,” because the General Fund already has a $500 million deficit. “If the board rejects the Muni budget,” said Newsom flak Nathan Ballard, “it will result in cuts to health and human services and public safety – cuts that nobody wants.”

In other words, Newsom is using the grim reality of a budget crisis to scare us into going with a Muni budget that betrays our “transit-first” policy. Why should we accept that bus riders shoulder four times the pain in the form of fare hikes – than automobile drivers in the form of garage rates? Newsom is playing a game of “chicken” with the Supervisors, when it doesn’t have to happen if the Mayor simply works with them.

At last week’s Budget Committee meeting, as it became clear the Muni budget was dead on arrival, Board President David Chiu took aside MTA Chief Nat Ford in the hallway – and told him they should have a week to “sharpen the pencils” and come back with a more acceptable budget. That’s real leadership in a time of crisis … not the political grandstanding and fear-mongering of Gavin Newsom.

Paul Hogarth

Paul Hogarth is the Managing Editor of Beyond Chron — an alternative online daily based in San Francisco providing news coverage ignored or distorted by the San Francisco Chronicle. He is a tenants’ rights attorney at the Tenderloin Housing Clinic, an active member of the Harvey Milk LGBT Democratic Club and was an elected official on the Berkeley Rent Board from 2000-2004. He lives in San Francisco.

Republished with permission from BeyondChron.

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