Ignoring hints of tax hikes, Jarvis
group backs Schwarzenegger

Week of August 22 — August 28

Schwarzenegger received Jarvis group backing. Despite repeated refusals to rule out tax hikes, gubernatorial candidate Arnold Swarzenegger was endorsed by the Howard Jarvis Taxpayers Association Thursday. One day earlier, Swarzenegger and state Sen. Tom McClintock publicly disagreed after Swarzenegger said he would not raise taxes except in a state “emergency.” McClintock responded saying “the last time you want to raise taxes is in an emergency. That’s why you maintain budget reserves.”

Schwarzenegger policy advisor Warren Buffett was sharply criticized by Jarvis Association President Jon Coupal Aug. 15 after Buffett said California property taxes were too low. In a prepared statement, Coupal said Buffett’s comments “are a slap at Proposition 13 and the almost 70 percent of the voters in California who approved the tax-cutting measure.”

Schwarzenegger spokesman Sean Walsh last week told Fox News the state’s deficit and poor credit rating might bring tax hikes in a Schwarzenegger administration. A later Fox News story quoted Walsh saying he “misspoke.” Communications director for then-gubernatorial candidate Bill Simon, K.B. Forbes, said “This is the second tax increase trial balloon they have launched and the second retraction. It is pretty obvious what they are talking about behind closed doors — raising taxes.”

Of the election’s three top replacement candidates for governor, Schwarzenegger appears most likely to raise taxes. Unified Republican legislators, having successfully blocked Democrat tax hike proposals, would likely continue to do so under a Gov. Bustamante. McClintock has vowed to lower taxes if elected governor. Only Schwarzenegger, as a Republican who has refused to sign a no new taxes pledge, could combine the necessary political muscle to break Republican unity against tax hikes with a willingness to do so.

McClintock was given no opportunity to speak to Jarvis Association leaders before the endorsement was announced. Capitol insiders speculated the group considered endorsing only those candidates able to make large donations. Former Jarvis president Joel Fox is a Swarzenegger campaign advisor. “If you hire the former president and pay him enough money,” McClintock campaign Deputy Director John Stoos said, “I guess you get the endorsement.”