New West Notes

** The forces of Governor Arnold Schwarzenegger strike first with the first Spanish language TV ad of the general election season. Entitled “Avanzamos,” it is, not surprisingly, on the Team Arnold theme of California moving forward. It does not mention Democratic challenger Phil Angelides. It can be viewed, along with supporting material, here.

** With LA Mayor Antonio Villaraigosa‘s hybrid LA schools takeover reform scheme on the verge of passage in the California Legislature, Fresno Bee editorial page editor Jim Boren has some contrarian advice. Focus on normal city issues and beware the responsibility that will come with personal responsibility for dozens of schools and indirect responsibility for a sprawling district beset in many respects by poverty. The link, unfortunately, has one of those newspaper sign-ins.

** Governor Arnold Schwarzenegger will discuss the agreement to increase California’s minimum wage in a live webcast at 3 PM this afternoon from the Governor’s Office.

** A new Democratic web site goes live tonight at midnight. In and of itself, that’s not much news; partisan blogs sprout up on the Internet like mushrooms after a rain storm. But this one is different. California Majority Report is run by three very smart, very inside Democrats who nonetheless are not stuck in spin mode. Except when it’s their job to be. Each is a high-ranking alumnus of former Governor Gray Davis‘s late administration.

I broke this story last April when the venture was to be called “Little Blue Pill.” Since then it’s gone through a lot of design and other organizational work. Now it’s California Majority Report, www.camajorityreport.com. Most blogs are simply launched and built as they go. This is the more traditional roll-out.

Jason Kinney was chief speechwriter for Davis. Now he is a partner and senior figure in the uber don’t-call-it-lobbying firm, California Strategies, and advises Senate President Pro Tem Don Perata. The public affairs consulting firm, headed by the former chief advisor to Governors Pete Wilson and Arnold Schwarzenegger, Bob White, is increasingly bipartisan. Steve Maviglio, a former New Hampshire state legislator, was Davis’s gubernatorial press secretary. Now he’s deputy chief of staff and senior advisor to Assembly Speaker Fabian Nunez. He served some time in Phil Angelides‘ gubernatorial campaign during a leave of absence. Roger Salazar was Davis’s campaign press secretary. Later a top hand in Senator John Edwards‘ presidential campaign, he’s a partner in the rising Acosta/Salazar firm. As spokesman for the Education Coalition (the teachers union and other education lobbies), he played a key role in the dismantling of the Schwarzenegger mystique during the governor’s ill-fated “Year of Reform” last year, and was an advisor in Steve Westly‘s gubernatorial campaign.

The three partners will be joined by a number of top-flight Democratic contributors. More about them later, as NWN will be covering the launch party. Yes, there is a launch party, tonight at a tony Capitol restaurant. It will be co-hosted by Speaker Nunez and Pro Tem Perata. Its special guest star is former Governor Davis. Phil Angelides won’t be there.

I’ll also real time blog their press availability at 4 PM today, when Maviglio, Kinney, and Salazar will appear with their ideological and partisan opposite number, Flash Report publisher Jon Fleischman, a former executive director of the California Republican Party.

Yes, the new media is going to be just like the old media. It really is all about us.

We’ll, of course, have New West video footage tomorrow from the party. It looks to be a great insider fest. Incidentally, folks, I hope you’re not holding your breaths for the New West Notes party.

** Track global and national energy prices in near real time via Bloomberg. Crude oil prices are hovering a few dollars over $70 a barrel.

** Continuous coverage of the new global insecurity on Pajamas Media (PJM). Another Russian jetliner has crashed. They are having an awful lot of accidents. Iranian forces have reportedly taken over a Romanian oil rig in the Persian Gulf. This last is not on PJM.

It’s another big week in the California governor’s race. While Governor Arnold Schwarzenegger has survived another state Republican convention without incident, his Democratic challenger, Treasurer Phil Angelides, is about to begin running a new TV ad through the Democratic Party said to link him to unpopular President George W. Bush. Meanwhile, Schwarzenegger is moving to lock down support in the Central Valley as he looks to new and pending legislative victories on the minimum wage, solar energy, and global warming. But a possible showdown with the powerful prison guards union looms.

Angelides media consultant Bill Carrick wouldn’t discuss the new TV ad, but did say: “It’ll be fun. We’re gonna mix it up, do some different things, have some fun here over the waning days of the summer.”

The new ad for Angelides, officially presented by the California Democratic Party, which can take in much bigger contributions and present campaign advertising as “issue advocacy” (so long as it does not advocate a specific vote) up to 45 days before the election, will replace the one that has been running declaring Angelides to be “a leader, not an actor.”

Informed sources say the ad will identify Schwarzenegger with Bush, who is quite unpopular in California. There has been a spirited debate inside the Angelides campaign on how best to attack Schwarzenegger. Is he an incompetent actor who flip-flops and can’t be trusted? Or is he a none too covert ally of Bush, who in fact is not a nincompoop but is responsible for his re-election and all the attendant ills of America?

This video, with a behind-the-scenes view of a recent Schwarzenegger photo opportunity demonstrating how the images are created, shows a media power that will not be easy for Angelides to overcome. It’s hard to see the Democratic challenger — who trails in recent private polling by more than ten points — generating this sort of interest.

The flip-flopping incompetent actor responsible for Bush’s re-election and the continued prosecution of the Iraq policy will be campaigning in the Central Valley today, locking down support from farm and rural groups and leaders. Angelides has done some campaigning there of late, but lost badly there in the Democratic primary to Steve Westly. The Schwarzenegger campaign is moving to take the region off the table early.

Of bigger long-range import are the moves on minimum wage, solar energy, and global warming. Schwarzenegger, as predicted, struck a deal with Assembly Speaker Fabian Nunez and Senate President Pro Tem Don Perata, which will raise the minimum wage in California from $6.75 an hour to $8.00 an hour by 2008, but does not index the wage to cost of living adjustments. It’s a win for low-wage workers and labor, but it does not include the escalator feared by business groups, taking a major issue off the table for Angelides.

Schwarzenegger yesterday signed a bipartisan solar bill carried by LA Senator Kevin Murray which will add the state’s municipal utilities to his Million Solar Roofs initiative enacted in January by the state’s Public Utilities Commission for the state’s regulated private utilities. This bill augments what is now the biggest solar energy program in U.S. history.

Then there is the possible agreement on new legislation to fight global warming by curtailing greenhouse gas emissions. Sources close to Schwarzenegger and to the Democratic legislative leadership say an agreement is not far away on a bill that would put teeth into the implementation of Schwarzenegger’s expansive anti-global warming goals. This would be a tremendous plus for Schwarzenegger that would leave Angelides hoping that Republicans were dismayed enough not to vote. But polling shows that California Republicans are nearly as motivated to combat global warming as are Democrats and independents.

One dark cloud on the former action superstar’s horizon is his troubled relationship with the state’s powerful prison guards union. Contract negotiations are at an impasse and Schwarzenegger, who would still have to negotiate a contract next year should he be re-elected, has pulled out of the running for the union endorsement. Union officials brandish the possibility of a late independent expenditure campaign against him.

**  Negotiators for Governor Arnold Schwarznegger, Assembly Speaker Fabian Nunez, Assemblywoman Fran Pavley, and other anti-global warming advocates are nearing agreement on a landmark California bill to combat global warming by curtailing greenhouse gas emissions in the Golden State, the world’s fifth largest economy.

** A nice tip of the hat from Fox News commentator Karen Hanretty over at the Flash Report for the new video product here. Karen wonders about the audio on the closing scene of the “Team Angelides Behind The Scenes” video. I’m referring to giving some advice to a politician to not have Schwarzenegger, who I at first refer to as Angelides — because I’m looking through the view finder at the time at an Angelides sign — appear at an event. That’s an old story from 20 years ago which is actually a joke. On me and my forecasting. Had I not included that, the video would have ended with the Angelides banner falling down.

** As predicted a few weeks ago, Governor Arnold Schwarzenegger is going to get his minimum wage increase, without indexing automatic annual increases to the cost of living. He and Democratic legislative leaders have agreed to a scheme allowing for an increase in stages to eight dollars an hour by the beginning of 2008.

** Look, it is the latest dippy California book from a twitty East Coast elitist. A genre that is its own cliche. Yawn.

** More videos coming. Among other things, you will see a world class photo opportunity. You’ll also get some behind the scenes of the press.

** Track global and national energy prices in near real time via Bloomberg. Crude oil prices have climbed a bit to two or three dollars over $70 a barrel.

** Continuous coverage of the new global insecurity on Pajamas Media.

It was a weekend of contrasts for Governor Arnold Schwarzenegger. On Saturday, a well-received appearance before a mostly conservative white crowd at the Century Plaza Hotel for the second convention of the year for the California Republican Party. Then on Sunday, another well-received appearance across town at L.A.’s First AME (African Methodist Episcopal) Church. Video footage of Schwarzenegger and his Democratic challenger, Phil Angelides, is provided here. *

There were a few problems for Schwarzenegger at his party’s convention, but nothing compared to the convention in San Jose last February. Then he and his new campaign team had to put down an open rebellion from elements of his party’s right wing against his move back to the center. There was some drama over whether or not his convention speech would be well received.

This time around, there was nothing like that. With polls showing Schwarzenegger with 85 percent of his party voters’ support, substantially higher than Angelides’ share of the Democratic vote, the former action superstar had only to deal with minor demonstrations against his more moderate stances on illegal immigration and social issues. Pro-family activists rallied against the possibility that he might sign legislation promoting “homosexual indoctrination” in the schools, and a dozen or so Minutemen decried Schwarzenegger’s immigration policies.

For his part, Angelides claimed the opposite, that by gleefully pointing out to his convention audience on Saturday that the Democratic candidate opposes having National Guard troops on the border in a support capacity to the Border Patrol and backs the bill to grant drivers licenses to illegal immigrants — who the governor called by the politically correct term “undocumented workers” — that Schwarzenegger was being “inflammatory” on immigration as former Governor Pete Wilson had been when he ran for re-election in 1994. Wilson backed the draconian anti-illegal immigrant Proposition 187. Video footage of Schwarzenegger’s convention appearance is provided here.

Angelides said as much in a media conference call, providing reporters with brief quotes to plug into their stories on Schwarzenegger. He then decided to expand on these remarks by having a press conference at the Beverly Hilton Hotel, providing a press van to take reporters to his event, then return them to the Republican convention at the nearby Century Plaza Hotel. Video footage of Angelides’ press conference peformance is provided here. Behind the scenes footage of reporters being ferried to the site and Team Angelides readying for the event — along with an interview with strategist Bill Carrick on Angelides advertising and fundraising — is provided here.

“I was saddened today that the governor decided to inject the explosive issue of immigration into this race. I believe that a governor ought to unite the people of California, ought to calm the waters. What the governor did today is that he deliberately decided to fan the flames of bigotry,” Angelides declared to the handful of reporters in attendance.

Schwarzenegger campaign officials said that all the governor did was accurately recount Angelides’ own positions, pointing out that the immigration issue was injected into campaign politics not by Schwarzenegger, but by massive demonstrations earlier this year against proposed federal legislation to expel millions of illegal immigrants from the U.S., legislation which Schwarzenegger opposes. Schwarzenegger’s views have widespread popular support.

In all, it was a pretty uneventful convention at the Century Plaza Hotel, Ronald Reagan’s favorite. Unlike past conventions, where moderate Governor Pete Wilson was hung in effigy, there was little sign of hostile sentiment toward the current governor. Although there was a lot of material circulating in opposition to anti-global warming moves.

Discord was very muted, consisting of party endorsements for only part of Schwarzenegger’s Big Bang Bonds infrastructure package — amounting to $24 billion for transportation and levee repairs — and a couple of very minor demonstrations. His convention speech was very well-received, but not rapturously so. Some activists, such as Flash Report publisher Jon Fleischman, said that a relatively light turnout of delegates to the convention is an index of conservative activists’ dissatisfaction with Schwarzenegger. Others pointed out that the Century Plaza Hotel is expensive, the party has two conventions every year, and there was little going on there in this August vacation period.

The down ballot candidates spoke Friday night at a convention dinner, but only one reporter was there. There was little notice that the candidates would speak then.

There was a balloon-drop style demonstration for the candidates, with all of them appearing on stage together. But the shot was captured by none of the media.

Several gave notable speeches, including state Senator Chuck Poochigian, who gave a rip-roaring 100 percent negative speech on former Governor Jerry Brown, the frontrunner in the race for state attorney general. But they may as well have happened in the proverbial forest in which the tree fell but no one heard it.

Needless to say, Schwarzenegger did not appear with the generally much more conservative members of the Republican statewide ticket. There were no signs for the other candidates in the hall when the governor gave his convention address.

* Technical management issues currently make it very difficult to embed YouTube video here. In addition, a key lesson has been learned. It’s very hard to shoot handheld from the back of a ballroom with a small video camera.

**  A pretty routine California Republican Party convention in LA  this weekend. I have a lot of video footage and intel to process. Discord was very muted, consisting of party endorsements for only part of Governor Arnold Schwarzenegger‘s Big Bang Bonds infrastructure package and a couple of very minor demonstrations. His convention speech was very well-received, but not rapturously so. A dozen or so Minutemen demonstrated outside the hotel, disliking Schwarzenegger’s relatively liberal, in their view, immigration policies. A couple dozen delegates and religious activists rallied in opposition to legislation they fear that Schwarzenegger will sign that would “promote homosexual indoctrination” in the schools. Some activists said that a relatively light turnout of delegates to the convention is an index of conservative activists’ dissatisfaction with Schwarzenegger. Others pointed out that the Century Plaza Hotel is expensive, the party has two conventions every year, and there was little going on there in this August vacation period.

** Track global and national energy prices in near real time via Bloomberg. Crude oil prices have dropped substantially below their recent record levels, but still hover over $70 a barrel.

** Continuous coverage of the new global insecurity on Pajamas Media.

Prospects for the ceasefire in the Israel-Hezbollah War do not look promising. The UN peacekeeping force is coming together very haltingly and slowly. The Lebanese army is not disarming Hezbollah.

** Just went over to the Beverly Hilton Hotel for Phil Angelides’ counter press conference. There is a lot of footage of Angelides scoring Schwarzenegger for being in bed with special interests and for today “injecting the inflammatory issue of immigration” into the race today in his convention speech. The governor criticized Angelides for opposing his move to put National Guard forces on the border in a support role and for his support of Senator Gil Cedillo’s bill to provide drivers licenses to illegal immigrants.

** Meanwhile, outside the hotel there was a demonstration of a dozen or so Minutemen protesting a too liberal stance on illegal immigration. Many American flags out on Avenue of the Stars.

** Schwarzenegger gave a well-received 17-minute speech at the luncheon. An edited version of highlights and behind-the-scenes shots will be available here Monday with the full report from the weekend.

For the first time, Schwarzenegger did some comparison stuff with Angelides, on the issues that have already been discussed here. While forceful, it was relatively low key and measured as these things go. He did not refer to Angelides by name.

One other minor discordant note, along with the slickly produced corporate piece against the anti-global warming stance, is a few activists passing out fliers critical of the more liberal stance on illegal immigration. But little if any contentious drama is happening here. It may be time for a siesta.

** A very uneventful convention so far here at the Century Plaza Hotel, Ronald Reagan’s favorite. Unlike past conventions, where moderate Governor Pete Wilson was hung in effigy, there is little sign of hostile sentiment toward the current governor, who will speak here sometime during the luncheon period. Although there is a lot of material circulating in opposition to anti-global warming moves. I’ve just done some establishing shots of the milling scene.

The down ballot candidates spoke last night at a convention dinner, but virtually no press was there.

** As the UN struggles to pull together a peacekeeping force for Lebanon and the Lebanese army drags its heels at confronting the challenge of disarming Hezbollah, some fighting has flared up again.

** Connecticut Senator Joe Lieberman continued to make changes in his operation following his narrow Democratic primary defeat last week to super-rich anti-Iraq War candidate Ned Lamont. He’s just hired a new Democratic media consultant and a Republican pollster. Lieberman, the 2000 Democratic vice presidential nominee who has drawn considerable fire for his friendship with President George W. Bush and backing for the Iraq policy, holds a sizeable lead over Lamont for the general election, running now as an independent.

** LA Mayor Antonio Villaraigosa appears on Univision’s Voz y Voto program Saturday at 10 AM across California and at 10:30 AM in Los Angeles. He talks about his reform plan for the LA Unified School District, the status of his prospective endorsement of Democratic gubernatorial candidate Phil Angelides, and his possible campaign for governor in 2010.

** The California Republican Party convention — they have two a year — starts later today in Los Angeles. I’ll be there covering it. Since I’ll be shooting video footage, real time blogging will be kept to a minimum unless something really significant is happening. The convention should be fairly routine.

There are a couple articles in the daily newspapers about conservatives being a problem for Arnold Schwarzenegger, which is the sort of thing you write when these conventions come up. Schwarzenegger, who speaks at the convention luncheon tomorrow, put down his right-wing activist rebellion at the GOP convention last February in San Jose. The polls show strong support for him among conservatives now even as he has moved back to the center, and in some cases beyond, thanks in no small measure to the presence of Phil Angelides as the Democratic candidate. If Schwarzenegger has a problem with Republican voters in November, and he may, it has little to do with him and much more to do with a possible Republican demoralization with the deflation of the George W. Bush presidency and the ongoing Iraq and global instability crises. But that affects not so much right-wing voters but more moderate Republicans, who are somewhat embarrassed by Bush. They, however, are the Republicans who like Schwarzenegger best.

Incidentally, despite the way it often comes off in the press, most Republican voters want to raise the minimum wage and are concerned about global warming and other environmental issues. The activists and virtually all of the politicians are more conservative than most Republican voters.

A better story is the state of the Republican ticket. Will there be campaigning for the ticket? Will I capture video of Schwarzenegger with his very conservative running mate, Tom McClintock? How will the ticket members relate to one another?

** Track global and national energy prices in near real time via Bloomberg. Crude oil prices have dropped substantially below their recent record levels, but still hover over $70 a barrel.

** Continuous coverage of the new global insecurity on Pajamas Media.

It’s dead, again. Redistricting reform in California, that is. It died earlier this week when a special legislative conference committee failed to reach agreement on a ballot measure linking redistricting reform with an adjustment in term limits. It died again yesterday in a Rashomon-like welter of conflicting stories when the Assembly was unable, some stories have it unwilling, to receive the redistricting only bill passed Wednesday in time to take it up before adjourning for the week and pass it to make the November ballot.

Redistricting reform was on the California ballot last year as part of Governor Arnold Schwarzenegger’s ill-fated “Year of Reform” package. As they scrambled to shoot it down, Democratic legislative leaders pledged that they would “do it right” this year. But politicians seldom if ever give up power, powerful interests in the Democratic Party like the system just the way it is now, and there have been multiple signals for months that it would not happen.

Senate President Pro Tem Don Perata, for example, made it known that he preferred that this November’s ballot focus as much as possible on the infrastructure bonds package he has championed for several years. Assembly Speaker Fabian Nunez pushed for months to link redistricting reform with a change in the term limits law. While there is some merit to his argument, there is no way such a measure could actually pass now. Voters like term limits and the insiders who have moaned about them for years have never embarked on a public education campaign. Then there are the public employee unions, the “anchor tenants” of the Democratic Party, to use Willie Brown’s term. They don’t want to change the redistricting system in which the politicians in power draw their own district lines.

After yesterday’s comedy of errors around the physical delivery of the bill from the Senate to the Assembly — which many regard as just the latest act in a kabuki play — Nunez held a contentious media conference call with clearly agitated journalists.

He insisted that the Senate, after passing a redistricting reform bill, at first sent over a companion bill but kept the main bill in-house. Only early yesterday afternoon, say he and his top aides, did the Senate finally attempt to deliver the main bill to the Assembly. Sadly, the Assembly had already adjourned and was unable to take up the bill in time to place it on the November ballot. Nunez flatly denied stories circulating from Perata aides that the Senate did try to deliver the main bill only to be refused.

At the end of the conference call, noting that we are where we are, I suggested to the speaker that he, Governor Schwarzenegger, and Senator Perata set a deadline next year to place a reform measure on the 2008 ballot. So that this time there would be no opportunity to fail by waiting until the last minute. He agreed to this approach. We’ll see what others say.

Perata, I’m told, will be agreeable. It probably goes without saying that Schwarzenegger will be, since he put his reputation on the line last year trying to pass a redistricting reform initiative only to be told that the Legislature would do it right this year.

Of course, what the politicians really want is to change term limits at the same time as reforming redistricting. Both will require a focused, sophisticated public education campaign. Redistricting, while key to the functioning of the political system, is an esoteric issue to most voters. And term limits are popular.

It would require leadership that can break through the clutter to get these things passed. That almost certainly means Schwarzenegger. Ironically, he may well have gotten redistricting reform passed last year, despite some flaws in the initiative, had he focused on it rather than take on all four initiatives that he ended up proposing.

Meanwhile, after this very questionable episode, with the press clearly not buying the explanations of Democratic legislative leaders, it will be important for the institution’s credibility to continue the progress shown earlier this year in conceiving and passing the multi-faceted infrastructure bonds package and producing a timely budget. Absent that, there will be no hope for future alterations in term limits or other institutional changes at all to the liking of the political class.

** New Connecticut Democratic Senatorial nominee Ned Lamont has worse problems than trailing the man he just beat in the Democratic primary, Senator Joe Lieberman. Among likely voters in the general election, he has higher unfavorables than favorables.

** Once again, to our utter lack of surprise, redistricting reform in California is dead for this year. It died earlier this week when a special legislative conference committee failed to reach agreement on a ballot measure linking redistricting reform with an adjustment in term limits. Not a shock here, as readers know, It died again today when the Assembly was unable, some stories have it unwilling, to receive the redistricting only bill passed yesterday in time to take it up before adjourning for the week and pass it to make the November ballot.

I just got off a long and contentious media conference call in which Assembly Speaker Fabian Nunez spoke with clearly agitated journalists. He insists that the Senate, after passing a redistricting reform bill, at first sent over a companion bill but kept the main bill in-house. Only early this afternoon, say he and his top aides, did the Senate finally attempt to deliver the main bill to the Assembly. Sadly, the Assembly had already adjourned and was unable to take up the bill in time to place it on the November ballot. Nunez flatly denied stories circulating that the Senate did try to deliver the main bill earlier in the day only to be refused.

I’ll have a report on this tomorrow. However, I formed the distinct impression months ago that redistricting reform would not happen this year, although it had been promised by Democratic leaders last year as they set about the task of defeating Governor Arnold Schwarzenegger’s reform initiative. Senate President ProTem Don Perata had made clear his preference that the November ballot stay as focused as possible on the infrastructure bonds package. Powerful interests in the Democratic Party had made it clear that they like the current regime, in which the politicians draw their own lines.

At the end of the conference call, noting that we are where we are, I suggested to the speaker that he, Governor Schwarzenegger, and Senator Perata set a deadline next year to place a reform measure on the 2008 ballot. So that this time there would be no opportunity to fail by waiting until the last minute. He agreed to this approach. We’ll see what others say.

** The Daily Kos explanation for Lieberman’s lead over Lamont? It’s the media’s fault. The solution to the problem? “Scandalize” Lieberman. For those who may not know, the Daily Kos is one of the big hyperpartisan web sites.

** Here’s an interesting perspective from Slate on the impact of Lamont/Lieberman, comparing the anti-war fervor of today to the anti-war fervor of the Vietnam era, discussing its possible impact on Democratic politics. The thinking, however, may predate the latest polls showing Lieberman in the lead for the general election. Still, the analogies are interesting.

** Sources around Governor Arnold Schwarzenegger, including Schwarzenegger himself, and the Democratic legislative leadership are optimistic about producing a bill to cap greenhouse gas emissions in California. AB 32 is authored by Assembly Speaker Fabian Nunez and LA Asssemblywoman Fran Pavley (she authored the first landmark global warming bill to curtail tailpipe emissions). Here are dueling ads from Environmental Defense and the Competitive Enterprise Institute, the latter unintentionally amusing, on the subject.

** U.S. Senator Joe Lieberman, now running as an independent, has a big lead over freshly minted Democratic nominee Ned Lamont in the Connecticut Senate race. Lamont, running as a champion of anti-war sentiment and backed by the hyperpartisan blogs, won a narrow primary victory over the 2000 Democratic vice presidential nominee and Iraq War backer last week.

** Track global and national energy prices in near real time via Bloomberg. Crude oil prices have dropped substantially below their recent record levels, but still hover over $70 a barrel.

** Continuous coverage of the new global insecurity on Pajamas Media.

In an interesting move, Treasurer Phil Angelides has called for new tax credits for middle class Californians. But as he does so, he backs off any previous specificity on a centerpiece of his program, closing corporate tax loopholes. In the process, he lowers the amount of money he previously said he would raise by the loophole closures and promises a strikingly specific amount of savings from government reforms, which also go unidentified.

Angelides, who is now running far behind Governor Arnold Schwarzenegger in private polling, said yesterday that he will fund his spending programs, including the proposed new tax expenditures in the form of a middle class tax cut, by raising taxes on the rich, closing corporate tax loopholes, and eliminating $1.15 billion in government inefficiencies. He had previously said he would fund his new spending with tax hikes on the rich and closing corporate tax loopholes. The new element, big new savings from eliminating government inefficiencies, is something he was previously critical of when it was called for by Controller Steve Westly, his narrowly defeated Democratic primary rival, and Schwarzenegger. While Angelides produced a very specific budget savings number from eliminating inefficiences, it’s not tied to any specific proposals to produce the savings.

Here is the new Angelides economic plan. Here also is Schwarzenegger discussing his general approach on taxes, and engaging in press Q&A on his and the Legislature’s raising of several fees during the 2004 budget crisis and responding to Angelides’ new middle class tax cut move. (Video from NWN.)

While Angelides’ proposal to raise taxes on the wealthy is specific, his plan to close corporate tax loopholes, which was vague from the start when he first called for it 19 weeks ago, now lacks all specificity. Angelides now declines to identify any corporate tax loopholes he will eliminate, deferring the specifics until after the election to a blue ribbon commission.

The history of Angelides’ corporate tax loophole closure proposal, along with tax hikes on the rich the fiscal centerpiece of his campaign, is intriguing. It dates back to April 5th, a key moment in the Democratic gubernatorial primary. For the past 19 weeks, after repeated requests of the candidate himself, in person, and of his campaign, the program has remained remarkably incomplete.

Finding himself in very difficult straits with the ascension of Westly’s candidacy, Angelides took a dramatic new tack in his campaign on April 5th, attacking his rival at a Sacramento rally in which he “defined the choice” in the Democratic primary and making fiscal policy the core of his candidacy. In a press availability afterwards, I asked the treasurer to define what he meant by this statement in his speech: “I’ll fully fund our schools, roll back the Schwarzenegger tuition hikes, expand financial aid, and open the doors to college wider than ever — and I’ll balance the state’s budget. I’ve said exactly how I’ll pay for this — by closing corporate tax loopholes and asking multi-millionaires to pay their fair share again.”

Angelides replied that he would seek to “get back” much of the $17 billion a year that he says high-income Californians and corporations get in tax cuts and tax loopholes as a result of recent federal and state actions. He would use the money he gets back to fund what he is calling for. He was vague in rat-a-tat-tat fashion, not specifying “exactly” what tax loopholes he would close, a “$2.5 billion” program of a dozen corporate tax loophole closures, saying as he made ready to leave that his campaign would send me the list promptly. Which, as it happens, his campaign did not.

Later that day, following his debate with Westly at the taping of Univision’s Voz y Voto, we did return to the question of what the treasurer is calling for. He acted in a hurry again. I again asked what I had asked after his speech.

Then I had asked him to be specific about his corporate tax loophole closure program, and he had said his staff would send me a list. What was actually sent was not a list of those loopholes Angelides proposed to close, but a discussion of the fiscal situation.

Noting this, I asked the treasurer to name some of the loophole closures in his program. He mentioned three, then referred me to the web site to look up the rest.

I didn’t see the program on his web site.

Later, the Angelides campaign, via then communications director Nick Papas, sent me a list of corporate tax loopholes to be closed. Only eight, and with no revenue figures attached to any of the loophole closures.

“Treasurer Angelides has previously proposed closing the following corporate tax loopholes.

“1. Close the “yacht loophole.”
2. Eliminate special resource
depletion deductions for gas and
oil companies.
3. Keep small business Subchapter S
tax break for small businesses
alone.
4. Repeal sales tax exemption for
farm and timber machinery.
5. Repeal sales tax exemption for
diesel used in agriculture.
6. Repeal sales tax exemption for
liquid petroleum gas used in
agriculture.
7. Close the expatriate corporation
loophole.
8. Close the “nowhere income”
corporate loophole.

“Additionally, the Treasurer has proposed legislation requiring a detailed annual review of tax loopholes currently in the tax code as part of the budget.”

That was it from the Angelides campaign. No revenue figures were supplied for the corporate tax loopholes that Angelides proposed to close.

The California Taxpayers Association, which opposes tax increases, did its own analysis of how much revenue the proposed Angelides corporate loophole closures would provide the state. Here is their memo on the subject: “From the sketchy descriptions, we could find estimates as follows, mostly for first year, second year and third year, although for numbers 1 and 7 there is only out-year impact. The sources for the numbers are included.

1. Close the “yacht loophole” $35 million in 2006-07, if the provision in law is allowed to sunset. (Source: Legislative Analyst 04-05 budget analysis).
2. Eliminate special resource depletion deductions for gas and oil companies. $22 million 1st year; $22 million 2nd year, $22 million 3rd year (Source: Assembly Revenue and Taxation Committee)
3. Keep small business Subchapter S tax break for small businesses alone. $835 million 1st year, $680 million 2nd year, $715 million 3rd year (Source: AB 1644 legislative analysis.)
4. Repeal sales tax exemption for farm and timber machinery
$95 million, $109 million, $125 million. (Source: Assembly Rev&Tax)
5. Repeal sales tax exemption for diesel used in agriculture
$31 million, $32 million, $34 million (Source: Assembly Rev&Tax)
6. Repeal sales tax exemption for liquid petroleum gas used in agriculture. $7 million, $8 million, $8 million (Source: 2001-02 Legislative Analyst’s Budget Package.)
7. Close the expatriate corporation loophole. In 2014-2015, $60 million. (Source: Franchise Tax Board estimate in AB 441.)
8. Close the “nowhere income” corporate loophole. Assuming this is same as AB 34 (Ruskin) on tax havens, Assembly Rev&Tax says $2 million; $20 million, $40 million.
These eight would add up to a first-year total of $992 million; $871 million for second year, and $979 million for third year.”

Those sums are less than 40 percent of the $2.5 billion annually Angelides cited after his rally speech.

For weeks after, the campaign promised to provide details to flesh out what the treasurer characterized in that speech as his “exact” program: “I’ve said exactly how I’ll pay for this — by closing corporate tax loopholes and asking multi-millionaires to pay their fair share again.” But it did not, nor would Angelides provide details. Later, press secretary Brian Brokaw said Angelides had provided a few “examples” of what he would do as governor.

It is an unusual situation to be left to play guessing games about a policy proposal that a leading candidate for governor of California presents as the centerpiece of his campaign. But there we are.

Another interesting thing about Angelides’ blue ribbon commission notion is that it would have to come up with a specific amount of revenue. Not the original $2.5 billion. Now the figure is down to $2 billion.

That, incidentally, amounts to a 20 percent corporate tax increase. Which is less than 25 percent, which was what the Angelides plan called for in the Democratic primary. But still a huge lynchpin figure. Angelides’ repeated inability to account for even half that amount during the Democratic primary probably demonstrates that there would be pain associated with those loophole closures. Which would account for his plan going from vague to blank when it comes to the details.