Feinstein Joins Governor in Boosting Propositions 57, 58

U.S. Sen. Dianne Feinstein (D-Calif.) urged voters to support Gov. Arnold Schwarzenegger’s two ballot propositions Thursday, even as a new poll showed the package continuing to fall short of majority support.

California could find itself in default of its debt obligations if the first of the two ballot measures, Proposition 57, fails to pass, Feinstein said.

Later in the day, state Treasurer Phil Angelides, also a Democrat, implicitly challenged that statement, offering a plan to cover the state’s debt without Proposition 57. His plan would raise taxes and include $10.9 billion in short-term borrowing.

Proposition 57 is a $15-billion bond to cover the state’s deficit. Its companion measure, Proposition 58, requires a balanced budget and restricts future use of borrowed money to cover deficits. The two are linked; both must get majority support for either to pass.

A poll released by the nonpartisan Public Policy Institute of California found Proposition 57 trailing, with 38% of those surveyed supporting the measure and 41% opposed. Proposition 58 is faring better -- 52% in favor and 23% opposed. The poll was conducted Feb. 8 through 16 and has a margin of sampling error of plus or minus 2 percentage points.

The survey also found support for the measures weaker among Democrats than Republicans.

So it was that Feinstein, the state’s best-known Democratic politician, stood alongside Schwarzenegger and Democratic state Controller Steve Westly at the Fairmont Hotel in Santa Monica on Thursday.

The senator acknowledged the measures weren’t a panacea, but said that, without their passage, the state would not be able to pay back short-term loans that will come due in June.

If Propositions 57 and 58 fail, she said, “California effectively is going to default. Think of what that will do across the state.” And without the measures, she added, the state can’t address its long-term structural deficit.

“If you don’t pass 57 and 58, you compound the structural problem,” Feinstein said. “You make it extraordinarily difficult, if not impossible to solve, and that indeed is a dark day for California.”

As Feinstein spoke in Santa Monica, members of the state Assembly sought to demonstrate they were working to whittle down the state’s deficit by approving some modest budget cuts amounting to about $680 million. The cuts mostly involved reclaiming unused money from programs funded last year and postponing payments to local government.

The lawmakers put off the governor’s proposed midyear program cuts in social services and transportation.

In outlining his opposing budget plan, Angelides, one of the few public officials not supporting Propositions 57 and 58, warned that passage of the bond is far from a sure thing and said state officials should begin now to prepare alternatives.

“We don’t want to be talking to the credit rating agencies, investment houses, everyone else in the market in May in a panic,” Angelides said. “We need to talk to them today.”

Angelides’ plan includes hiking the income tax on the top 2.4% of income earners in the state (single taxpayers making more than $140,000 per year) and using existing sales tax money to refinance some of the state’s outstanding loans.

There is no official campaign against the measures, but Angelides stepped up his criticism of Proposition 57 this week as polls showed it struggling.

The Public Policy Institute poll suggested that even Schwarzenegger’s popularity -- 61% of those surveyed approved of the job he is doing -- might not persuade people to vote for the bonds.

The poll did suggest that TV ads featuring the governor, which went on the air after the poll had begun, have softened opposition to the bond measure.

Proposition 57 trailed 45% to 37% before the ads appeared, but support and opposition were evenly split -- at 38% -- after the ads ran.

Last fall, Feinstein made television advertisements opposing the recall that brought Schwarzenegger into office. But that seemed forgotten Thursday, as advisors to the governor boasted that her endorsement was the first joint public appearance of California’s two most popular politicians since his swearing-in in November.

Schwarzenegger usually commands any stage, but he seemed to defer to the veteran politician. The senator compared the vote with the presidential election in importance, adding, “there’s never been a more important election” for the state’s economy than the one of March 2.

In response, the governor gushed: “I love your passion for Proposition 57 and 58. It’s terrific. I love it.”

Schwarzenegger is scheduled to speak in support of the measures tonight at the state Republican convention. But he leaves the campaign trail this weekend to attend the National Governors Assn. meetings in Washington and plans to visit New York early next week for a fundraiser and a meeting with Wall Street executives.

In the meantime, the 57 and 58 campaign will rely largely on a deluge of television ads, including two new 15-second spots available this weekend.

Late Wednesday, Schwarzenegger transferred $1.5 million from his main political fund, the California Recovery Team, into the 57-58 campaign. That is roughly the cost of running an advertisement on statewide TV for a week.