Schwarzenegger May Take Budget Cake

Sure, he has charisma and starpower, the skeptics said when Arnold Schwarzenegger (search) was running for governor, but can he handle the day-to-day drudgery of governing, such as passing a budget? The skeptics are about to get their answer.

Just days before the June 30 end of California's budget year, the actor-turned-Republican-governor looks as if he is going to extract most of what he wants from the Democratic-controlled Legislature and pass his $103 billion spending plan on time.

Using dealmaking skills many lawmakers didn't know he had, Schwarzenegger has reached agreements with a variety of interest groups to help eliminate a $17 billion deficit.

So far, teachers, school officials, state universities and local government leaders have all agreed to accept short-term spending cuts in return for improvements in the future. And on Monday, Schwarzenegger reached a deal with five Indian tribes for a major expansion of casino gambling (search) that would bring the state $1 billion this budget year.

"You've got to believe that the governor is setting himself up very well as the dominant individual in state politics," said Larry Gerston, a political science professor at San Jose State University. "The shadow he is casting right now is so long you can hardly see the Capitol."

While Schwarzenegger has been helped by an improving economy, if he gets a budget passed before the June 30 deadline, he will have accomplished something California has done only twice in the past decade because of bitter partisan gridlock. The man Schwarzenegger ousted in a recall election last fall, Democrat Gray Davis (search), could not meet the deadline in his last three years in office.

"He is moving the process the only way possible, with much dexterity and determination," said Democratic former Gov. Jerry Brown, now mayor of Oakland.

Schwarzenegger's spending plan does not raise taxes. But it uses billions of dollars in borrowing, accounting gimmicks and one-time savings to get through another year. Most of the big reforms he promised during the election remain on his to-do list.

"This year is all about stopping the hemorrhaging," said Allan Hoffenblum, a GOP consultant in Los Angeles. "He's only been in office a few months. Give him another year."

Since his election in October, Schwarzenegger has claimed several victories that have enhanced his power. Upon taking office, he repealed an unpopular increase in the car tax and forced lawmakers to repeal a law allowing illegal immigrants to obtain driver's licenses.

In March, he persuaded voters to approve the nation's largest state bond issue - $15 billion in borrowing. He also brokered a deal to reform the state's costly workers' compensation system.

Schwarzenegger moved early to gather support for his budget proposal, even before the final version had been released to lawmakers in May. He outflanked the Democrats by negotiating a series of side agreements with key interest groups.

Some Democrats are worried about the governor's growing clout and may try to hold up the budget if only to remind their constituents that they are still California's majority party.

Assembly Speaker Fabian Nunez said lifting a cap on freshman enrollment at state universities is his No. 1 priority. He also wants to rescind a wage cut for home health care workers. And some Democrats want to provide a cost-of-living increase in welfare checks.

All together, the Democratic list would add less than $500 million to the Schwarzenegger spending plan - less than 1 percent of the overall budget.

Gerston said that while many of the governor's solutions simply push problems off into the future, the Democrats appear to be putting up only token resistance.

"Democrats either go ahead and look the other way or they fight it," he said. "Clearly they appear to be going with the flow."