Cato Gives ARNOLD a D on Fiscal Policy

Stephen Slivinski has released his Fiscal Policy Report Card on America’s Governors: 2006. He gives California’s governor a D:

Governors who received praise in previous editions of the report card but have lower grades this year include Arnold Schwarzenegger of California (current grade, D); Jeb Bush of Florida (current grade, C); Bill Owens of Colorado (current grade, D); George Pataki of New York (current grade, D); and Bill Richardson of New Mexico (current grade, C) … Arnold Schwarzenegger: He received accolades for his first two years on the job when he received an A in the 2004 edition of this report card. This year, however, his grade has dropped to a D. It seems that the California governor has changed his stripes completely. After one year of aggressive budget cutting, he has let the big spenders in Sacramento get to him. Today, California state government is 12 percent bigger in real per capita terms than it was after his hard-fought battle to eliminate the massive $15 billion deficit. Now his efforts are geared toward expanding government, not scaling it back. It’s likely many voters no longer recognize the Arnold Schwarzenegger they elected in 2003 … The plot of the second reel of the current Arnold Schwarzenegger film has taken a turn for the worst. In the first reel, Schwarzenegger played an aggressive budget cutter who slashed spending by around $6 billion over two years and reversed Gray Davis’s car tax hike. Part of his budget fix, however – a $15 billion bond to cover year-to-year expenses – looks in retrospect like a harbinger of things to come. Lately, while he’s held the line against tax increases, he’s also been eager to expand government massively. Over the past two years, Schwarzenegger proposed budgets that boosted spending several times faster than population growth. This year he cut a deal with the Democrats in the state legislature to hike the budget by 10 percent. He also conspired with them to put on the ballot a massive $37 billion bond to pay for infrastructure projects, many of which have been rightly criticized as pork. Meanwhile, the recommendations produced by his first-year budget task force, which could produce $32 billion in budget savings, collect dust like a forgotten screenplay on a shelf somewhere. Schwarzenegger is no longer the small-government crusader he claimed he was when he auditioned for the role of governor. He has instead become a borrow-and-spend version of the big spending governor he unseated in 2003.

ARNOLD is bragging that he has avoided increasing taxes – but even the Cato crowd understands that his borrowing is only deferring the tax bill.