ON MAY 19th Californians will go to the polls to vote on six ballot measures that are as important as they are confusing. If these measures fail, America’s biggest state will enter a full-blown financial crisis… A good outcome is no longer possible. California now has the worst bond rating among the 50 states. Income-tax receipts are coming in far below expectations. On May 11th Arnold Schwarzenegger, the governor, sent a letter to the legislature warning it that, by his latest estimates, the state will face a budget gap of $15.4 billion if the ballot measures pass, $21.3 billion if they fail. Prisoners will have to be released, firefighters fired, and other services cut or eliminated. One way or the other, on May 20th Californians will have to begin discussing how to fix their broken state.

Only a minority of Californians bother to vote, and those voters tend to be older, whiter and richer than the state’s younger, browner and poorer population… Those voters, moreover, have over time “self-sorted” themselves into highly partisan districts: loony left in Berkeley or Santa Monica, for instance; rabid right in Orange County or parts of the Central Valley. Politicians have done the rest by gerrymandering bizarre boundaries around their supporters. The result is that elections are won during the Republican or Democratic primaries, rather than in run-offs between the two parties.
Representative democracy is only one half of California’s peculiar governance system. The other half, direct democracy, fails just as badly. California is one of 24 states that allow referendums, recalls and voter initiatives. But it is the only state that does not allow its legislature to override successful initiatives (called “propositions”) and has no sunset clauses that let them expire. It also uses initiatives far more, and more irresponsibly, than any other state.

Governor Arnold Schwarzenegger today announced California will be the first state to be the official partner of CeBIT, the world’s largest trade fair for digital business solutions and information and communications technology (ICT). In previous years, CeBIT has partnered with other nations
including the United States, France, Russia, India and Canada. As the Partner State, California businesses will be highlighted above all others, providing a great opportunity for business matchmaking and networking for California businesses “I am excited to officially announce that California will be the 2009 CeBIT partner state, a role previously reserved only for nations, and we look forward to demonstrating California’s global leadership in information communications technology,” said Governor Schwarzenegger. “Not only does CeBIT provide California with a venue to showcase our innovative spirit, it is a tremendous opportunity for California companies looking to promote their
products in the global marketplace. I urge businesses across California to showcase
their innovation at CeBIT 2009.”

At CeBIT 2009, California will spotlight the state’s innovative ICT technologies in several key industries including green IT, entertainment, Internet-based services, TeleHealth, security, consumer
electronics, digital content generation and distribution, aerospace, and research and technology. The star attraction of the Partner State program will be the Germany-California ICT Summit. The two entities will use this opportunity to step-up collaboration and stimulate more bilateral business. “It is fitting that we are in the Silicon Valley today since it is a major source of global information, communications technology and venture capital. The region has garnered a lot of well-deserved attention over the years,” said Dale E. Bonner, Secretary of California’s Business, Transportation & Housing Agency. “But there are also many other innovative information and technology companies located in places like Los Angeles, San Diego and regions throughout California
that will play an important role in CeBIT 2009.”

The event could cost more than $3 million between GE and other private sponsors, according to participants in the planning of the conference, who requested anonymity because they were not authorized to discuss the arrangements. That would make it an expensive example of a technique Schwarzenegger has embraced to bring the glitzy style he appreciates to ceremonial state functions: getting corporations and wealthy supporters to pay for them. The governor’s aides say the practice saves taxpayers money.

Government watchdog groups argue that it may compromise the administration’s independence from corporate interests. Schwarzenegger’s phone call with Immelt was arranged by a GE executive, formerly an advisor to the governor, who oversees the company’s lobbyists in Sacramento.

“It’s a governmental conference, with governmental officials,” said Robert Stern, president of the Center for Governmental Studies in Los Angeles. “If GE is paying for it, the question is what does GE expect for their contribution? And they are certainly going to expect good will.” A spokesman for General Electric said the size and nature of the company’s contribution have not been finalized, and administration officials said there is no budget yet. Schwarzenegger’s office has accepted millions of dollars in private gifts for things such as state dinners, international travel and ornaments on state Christmas trees.

The cross-border conference, held each year in one of the 10 participating U.S. and Mexican states, is an important event for Schwarzenegger because it is the first to be hosted in California in eight years, and the only one while he is governor. “We are going to take this important annual event to a whole new level,” Schwarzenegger said last month in a statement announcing the partnership…

The bulk of private support received by Schwarzenegger’s office has come from the California Protocol Foundation, a nonprofit group affiliated with the California Chamber of Commerce that does not disclose the names of its donors or the details of specific expenditures.

Gov. Arnold Schwarzenegger on Wednesday encouraged lawmakers — especially those from small towns — to do more globe-trotting on the dime of special interests. Speaking at a forum on global economics held by the nonprofit Milken Institute, the governor suggested lawmakers would be more willing to embrace his plans to privatize the building of roads, schools, high-speed rail systems and other public works if they could see how effectively it has worked in other countries.

“Some of them come from those little towns, you know what I am saying, they come from those little towns and they don’t have that vision yet of an airport or of a highway that maybe has 10 lanes or of putting a highway on top of a highway,” Schwarzenegger said. “They look at you and say, ‘We don’t have that in my town. What are you talking about?’

“So they are kind of shocked when you say certain things. So I like them to travel around.” Such travel is typically paid for by a combination of special interests with business before the Legislature and foreign governments.

It usually involves stays at luxury resorts, high-end dining and the option of bringing a spouse along. Schwarzenegger has jetted around the world on “trade missions” paid for by donors whose identity is not disclosed. Campaign finance reformers are troubled by the ethical issues raised by such trips. Schwarzenegger said he is not.

“I am always against when the media beats up” on lawmakers “for traveling around because someone else is paying for their trips,” he said. “I mean, so what. If they were to take the money from the taxpayers,” then the media “would complain about using tax dollars to travel around the world and live in luxury and all this stuff.

Like many of the Californians he represents, Gov. Arnold Schwarzenegger now spends more than three hours commuting because he lives so far from the office. But his ride is a private jet. After flirting briefly with buying a Sacramento abode for his family, then living alone for a while in a 2,000-square-foot hotel penthouse across from the Capitol, the governor has decided to stay nearly every night at his Brentwood mansion.

The commute costs hundreds of thousands of dollars a year, which aides say the governor pays for himself. Some environmentalists say the trips expand his carbon footprint enough to undermine his image as a crusader against global warming, despite the pollution credits he buys to offset the damage.

Abandoning more glamorous parts to settle in Sacramento has long been a trade-off governors made for the privilege of running the state. But Casa de los Gobernadores, the 12,000-square-foot suburban ranch home that Ronald Reagan and his family had built when they ruled the town, did not lure Schwarzenegger and kin, despite five visits to the home by California first lady Maria Shriver and a Realtor.

“I just don’t have a home in Sacramento,” Schwarzenegger said in a recent interview at a Starbucks in Washington, D.C., where he had flown — by private jet — to attend the winter meeting of the National Governors Assn. “The question is how can I be with my family, because that is extremely important, to be with my kids. They are all growing up. They are in their teens. They need their father around,” …

Schwarzenegger has used his vast financial resources to create a kind of roving governorship, with almost constant travel in and out of California. He spent more than $591,000 in campaign funds, donated mostly by special interests, for travel in 2007 — a year in which he was not running a major campaign.

The governor rarely sleeps now in the $62,000-a-year hotel penthouse paid for by a tax-exempt charitable foundation. But in the early years of his administration, Schwarzenegger spent most weeknights there, working late, receiving visitors and playing chess, former aides said.

“When I worked for him, he was there almost every night,” said Donna Lucas, a public relations consultant who was a senior advisor to the governor and first lady during Schwarzenegger’s first term. “We were working so hard, I can’t even tell you. I know it was important for him to have an opportunity to be up here in Sacramento.”

When he went out, his security detail would knock loudly on the door of the hotel garage where his caravan of SUVs was parked, wave to the workers and bring the governor down from his suite, as garage and hotel employees took pictures. Now he is rarely sighted. “I didn’t see him in a very long time,” a cashier said from inside a booth at the garage, speaking on condition of anonymity out of fear of losing the job.

At a time when Sacramento is struggling to balance its checkbook, Gov. Arnold Schwarzenegger gave a robust assessment of the state’s economic strength Thursday and claimed the media is overstating the depth of the national slowdown.

“I don’t like the coverage that I see, because it’s a little bit too negative,” the celebrity-governor said in a speech to a civic group, Town Hall Los Angeles. “The reality of it is, it’s not that bad,” Schwarzenegger said. State finances “did go down with the economy, but we are going to be OK in California.”

Schwarzenegger’s remarks echoed in part an assessment of the national economy by President Bush, who expressed concern Thursday about slowing growth but predicted the nation is not bound for recession. “I believe that our economy has got the fundamentals in place for us to … grow and continue growing, more robustly hopefully than we’re growing now,” Bush said in Washington.

Faced with a troubled housing market and the largest projected budget gap in the nation, Schwarzenegger has called for across-the-board cuts to most state programs and said Thursday his administration “should go after” so-called tax loopholes. There are “tax loopholes out there that we can close that will give us additional money for our budget, so we don’t have to make just cuts,” the governor told reporters after his speech, without committing to specific steps.

The governor argued that the state is better positioned than many others to rebound, because of the diversity of California’s economy, which includes the entertainment capital in Los Angeles and high-tech powerhouses in the Silicon Valley. State income is higher than at this time last year, he said, but falling below projections for growth. But the state’s financial condition is nothing like 2003, he argued, when he was elected in a historic recall election. “We have turned things around,” he argued.