Governor Is Digging Himself Deeper With Denial of School Funding Deal

Sacramento —  Gov. Arnold Schwarzenegger may be confused. Perhaps he’s in denial. Or maybe he’s being disingenuous. Or just parsing words. Or even lying.

“Right-out lying,” as he said of the school lobby Tuesday.

Two things are certain: Schwarzenegger is not being completely candid. And he’s way too vitriolic for a governor.

“I did not break a promise, like they keep saying, that I borrowed $2 billion and now I’m supposed to give it back this year,” Schwarzenegger told reporters at an elementary school photo-op near Sacramento. “This is wrong; it’s a right-out lie....

“We did not make a promise that we will give it back this year because I couldn’t guarantee to give it back this year, because we didn’t know how much money we’d have.”

A third thing also is certain: There was a deal. The governor promised schools more money -- not $2 billion, but more like $3 billion, based on the latest calculations. He pledged to give it to them this year.

Too many people were in the room and heard him.

And nobody in the Schwarzenegger administration, until Tuesday, had ever tried to deny it.

It’s a complex issue involving the Byzantine school funding guarantee contained in Proposition 98.

Here’s what happened:

Shortly after getting elected, Schwarzenegger was desperate for money to balance the budget without raising taxes. So he cut a deal with the “education coalition,” including the biggest teachers union, school boards, administrators and the PTA. If they’d surrender $2 billion that schools were owed under Prop. 98, he’d later return it to their guaranteed funding base.

But this is the most important part of the deal: The governor promised that if tax revenue rose, he’d give schools their normal Prop. 98 share of the increase. Put another way, they all agreed that schools would receive their normal cut of total revenue, minus the surrendered $2 billion.

“Trust me,” Schwarzenegger said when the deal was announced.

But when revenue rose, the governor reneged.

One obstacle to comprehension here is that there are too many “$2 billions” floating around.

Disregard the $2 billion initially seized for budget-balancing. That could be returned to the schools’ funding base any time in the next one to three years, depending on economic conditions. (That is, unless the governor’s spending cap is approved by voters. Then schools will get shortchanged, but that’s another complicated story.)

Focus on the $2.3 billion that the increased tax revenue should have earned schools during the current and next fiscal years. In proposing his 2005-06 budget in January, Schwarzenegger decided to hold on to that $2.3 billion to avoid a tax increase. By last week, this amount had grown to $3.1 billion because of even higher tax receipts, according to nonpartisan Legislative Analyst Elizabeth G. Hill.

Bottom line: Schwarzenegger is proposing a roughly $3-billion annual increase in Prop. 98 funding for kindergartens through community colleges. But that’s $3.1 billion less than what they’re owed under the deal he cut.

Unfortunately, many people -- myself included last week -- have inaccurately short-handed a description of this deal by stating that Schwarzenegger “borrowed” $2 billion and hadn’t repaid it, as promised. (I’ve also previously written the above long-winded but accurate version.)

On Tuesday, Schwarzenegger was denying the oversimplified rendition. And he was technically correct, but in a Clintonesque way.

The governor’s tone was that he hadn’t broken any promise and that people who contended he had were liars.

“I am personally offended that the governor has resorted to calling me and other education leaders ‘liars,’ rather than honestly discussing how we are going to fund schools,” state Supt. of Public Instruction Jack O’Connell, a Democrat, said in

a written statement Wednesday. “His current attempt at revisionist history is outrageous....

“I agreed to his plan because I trusted him to be good to his word.... His inability to be honest and keep his promises should concern anyone who is asked to put their trust in him.”

Asserted Barbara Kerr, president of the California Teachers Assn., who was at the negotiating table: “He changes his reality every day. That’s what happens when you don’t tell the truth -- the story keeps changing and changing.”

As for the governor calling her and others liars: “That’s the way he behaves. When all else fails, he calls somebody a name. It’s the bully type of tactic.”

But don’t take their words for the broken promise.

In passing the current budget last summer, the Legislature sent the governor a separate bill that put this deal in writing. He signed it.

The Sacramento Bee reported Wednesday that Schwarzenegger was asked in January by its editorial board what he had learned from negotiating the deal. He replied: “You learn to just always make it clear that things can change and then that changes ... the deal.”

Until Tuesday, administration officials had been telling reporters that the governor’s highest priorities for the $2.3 billion -- now $3.1 billion -- were avoiding higher taxes and deeper cuts in programs for the poor.

But he isn’t arguing that. He’s calling his critics liars.

He’s digging himself in deeper. He’s in denial and being disingenuous.

It’s bad policy and worse politics.

George Skelton writes Monday and Thursday. Reach him at [email protected].