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Chamber View

Time Will Tell

Author: Tallia Hart
July, 2006 Issue


Chamberview_taila.jpg Six years ago, in a discussion about what to do with the state’s budget windfall (created by a booming tech industry), California Governor Gray Davis said, “We must resist the siren song of permanent spending.”
He should have tattooed that mantra on his arm. Unfortunately for California, Davis abandoned his logic and spent the aforementioned windfall in the most harmful way possible—on recurring expenses. Davis and the legislature approved countless new programs we could afford that year (due to the one-time surplus) but not the next. The result was a structural deficit that we’re still paying for today.

It would be unfair to criticize Davis for not foreseeing the rapid decline of the tech industry’s viability in California, but he’s certainly responsible for allowing the overspending when all rational thought (including his own) indicated the smarter path was frugality.

Today, Governor Arnold Schwarzenegger is facing a parallel situation and must navigate the tricky politics of not spending. It’s odd, but having more money than expected can actually be a challenging situation for a governor.

There’ll be great pressure from special interest groups for new spending on programs that we appear able to afford. That problem will be compounded by the fact this is an election year. Large organizations with the resources to seriously affect an election will be making their impact felt on the budget process.

The current surge in state revenue is not quite as large as the 2000 surplus, but the way Governor Schwarzenegger handles it will be equally telling. Does he have the ability to lead California or will he be bullied by special interests?

Schwarzenegger recently made comments eerily similar to that of Davis: “Some may think this is a moment now where we can dramatically increase spending, but I urge them to resist that temptation.” Here’s hoping his actions will differ from Davis’ more than his words.

California’s economy is recovering, and that’s good for all of us. But the only way to build on that progress is for our elected leaders to be smart with our budget and not get caught up in the excitement of revenue we weren’t expecting.

Politics over prudence

Recently, the governor and legislature were planning to put a $68 billion infrastructure improvement bond before California voters. Everyone in the legislature agreed that some kind of infrastructure improvement is needed, but the bond measure failed to get the necessary support by the deadline, and the initiative never materialized.

Those who follow California politics probably could have predicted this outcome before the negotiations even started. Why? It’s election season, that magical time of year when nothing gets done in Sacramento—unless that “thing” has universal appeal to voters, political strategists and campaign donors.

To be fair, there are legitimate reasons to dislike the infrastructure deal. Although California’s levees and highways are in need of some serious upgrades and maintenance, it was a very costly plan. Any time the legislature is considering appropriating $222 billion, a lengthy examination of the plan is warranted.

The bond measure failed because both parties were terrified the other would gain a political advantage by negotiating a solution. If our legislature is serious about improving the state’s aging infrastructure, the opportunity remains for them to agree to some kind of deal for the November election. But odds are, nothing serious will get done.

This year, we’re heading toward a very high profile and costly gubernatorial election. Steve Westly and Phil Angelides are already pumping millions into a hotly contested Democratic primary. Once the primary election has been decided, the big showdown will occur. The General Election will bring even greater partisan gridlock to Sacramento. Unless things change soon at the Capitol, there won’t be a new bond deal. (We also might set a new record for how late the budget gets signed.) It’s all part of the new politics in the Golden State.

Get SMART

We’ve all heard about SMART, the proposed rail transit system for Marin and Sonoma counties. Pretty soon, the discussion will escalate into a full-fledged public debate over the pros and cons. It’s sure to be a divisive issue as there is no middle ground.

Opponents argue the cost to taxpayers is too high (current projections estimate a cost of around $340 million), and there won’t be enough people riding SMART to justify the enormity of such a project. Those are fair critiques. Marin County is currently facing budget problems, and even liberal estimates of initial ridership seem somewhat low for a project that will cost a third of a billion dollars.

However, both of these arguments address only the short-term impacts of a long-term improvement to our local and regional transportation systems—and our quality of life. The fact is, adding rail transit to our region will impact transportation systems all over Northern California.

Traffic in Marin County ranks among the worst in the country. If we learned that our schools or our public safety programs were similarly lagging, we would stop at nothing to alleviate the problem. For the future economic sustainability of our region (and for the sanity of our residents), transportation is just as important. Yet many in Marin County seem to accept our traffic woes as an irreparable reality rather than view it as a problem we should be working to solve.

Is SMART a silver bullet for our transportation problems? No. But it’s the best alternative we have to improve a failing system. It’s time for Marin County to seriously address the gridlock, and we have a great opportunity to do so with SMART.

Tallia Hart is president/CEO of the San Rafael Chamber of Commerce.



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