The Governor Owes Schools an Apology — and $2 Billion

George Skelton
LA Times Capitol Journal

April 14, 2005

It’s like they’re shouting at each other in different languages ‹ Gov. Arnold Schwarzenegger and the angry school folks.

They’re debating the proverbial apples and oranges. Both are right, rhetorically.

Schwarzenegger is wrong politically ‹ and many say morally.

Schwarzenegger insists everywhere he goes ‹ on talk radio and at initiative campaign rallies ‹ that his proposed budget includes a $2.9-billion funding increase for schools: kindergarten through community college.

When the “special interests” claim that school funds are being cut, he says, “They are lying.”

“The [teacher] unions spread propaganda that I’m taking money away from education, which is totally incorrect, because I’m addingŠ. I am a pro-education governor.”

The governor is correct. He is adding money. But what he leaves out ‹ and the ed lobby is hollering about in TV ads and at protest rallies ‹ is that he promised schools roughly $2 billion more and reneged.

He pledged that extra money in a face-to-face, handshake deal shortly after taking office. It was the schools’ condition for passively surrendering $2 billion they were rightly owed under Proposition 98. The governor needed the $2 billion from schools to avoid raising taxes.

So there’s a TV ad now running in California’s largest urban areas that shows parents proclaiming: “I’m upset about Gov. Schwarzenegger breaking his promises on education. He said he’d never shortchange Prop. 98Š. That would only happen, quote, ‘over my dead body.’ But then he borrowed $2 billion from the education budget and now refuses to pay it back.”

The broken promise is at the heart of a bitter battle between Schwarzenegger and an education coalition led by the powerful, 335,000-member California Teachers Assn.

Breaking his word to the CTA and other school groups probably is the single most damaging error Schwarzenegger has committed as governor. It soiled his image as a straight shooter.

I don’t know about Hollywood and moviemaking, but in Sacramento and politics, breaking your word is probably the worst sin. The term “double-cross” comes to mind.

“I’m out of the deal-making business with this governor,” says Barbara Kerr, the CTA president.

“He owes us a bit of money and seems to be trying to make the lenders into the bad guys.”

The governor’s rationale for withholding money from schools was that it would spare other state programs from deep cuts, particularly healthcare for the poor and disabled.

H.D. Palmer, the governor’s budget spokesman, offers this example: 190,000 children would have been forced off the Healthy Families medical care program for the working poor.

“The governor said that wasn’t a trade-off he was willing to do,” Palmer recalls. “So he stuck with what he believed was a reasonable balance.”

As it was, Schwarzenegger still had to cut deeply into many health and welfare programs.

Of course, he also could have raised taxes. He’d have broken a different promise, but not one as signed and sealed as the school deal.

Here’s what happened:

Schwarzenegger was desperate for money, and school officials wanted to cozy up to the charismatic, larger-than-life new governor. Also, they feared a worse result if there was no cooperation. So they agreed not to fight for the $2 billion on the condition that it be returned ‹ that is, returned to their guaranteed annual funding base. It hasn’t been.

The governor assured schools that if tax revenues increased this year, he’d give them their normal cut under Prop. 98. Revenues did, but he didn’t.

The final paragraph of the statement Schwarzenegger released at the deal’s announcement read: “This Prop. 98 funding will be restored as required by law and our agreement. Today, I am making that promise to our teachers and students.”

Schwarzenegger didn’t just renege on the deal. He’s pushing a budget “reform” to amend Prop. 98 so that repayment of back money owed schools ‹ roughly $4 billion ‹ is stretched out over 15 years and not added to the guaranteed base.

There is logic in tinkering with Prop. 98. Under the current system, if the state gives schools a fat bonus during boom times, it’s on the hook for that payment year after year, even when the economy sours. Of the $50 billion in state and local tax revenues Schwarzenegger is proposing for schools, nearly $10 billion is because of funding bonuses ‹ called “over-appropriations” ‹ between 1999 and 2002.

Schwarzenegger’s budget control plan would allow the state to give schools a one-time bonus without it becoming part of the guaranteed base.

Senate leader Don Perata (D-Alameda) has said he’s willing to tinker with Prop. 98. But not Assembly Speaker Fabian Nuñez (D-Los Angeles).

“When we’re in the top five states in per-pupil funding,” Nuñez says, “then perhaps we can talk about reforming Prop. 98.” California currently is closer to the bottom five.

Anyway, Nuñez says, “the governor has to decide how long is a deal good for. He needs to clear the air and reestablish a certain level of trust.”

Veteran Republican strategist Ken Khachigian thinks Schwarzenegger should take the statesman’s route and address a joint session of the Legislature.

“Lay it out,” Khachigian advises. “Say, ‘This is not a problem I invented. It’s a mutual problemŠ. Let’s focus on the budget and avoid a ballot fight.’

“He’s got a lot of maneuvering room. He’s got great communication skills. He can be visionary, philosophical and assertive. He doesn’t have to look like a wimp.”

In the speech, Schwarzenegger could apologize for repeatedly referring to former negotiating partners as greedy special interests. And he could give the schools back their promised money.

George Skelton writes Monday and Thursday. Reach him at
Copyright 2005 Los Angeles Times