Gov. Can Handle the Truth, and So Can We

Sooner or later, it’s going to happen. Gov. Arnold Schwarzenegger is going to appear on Jay Leno, Oprah or perhaps the “Today� show, and finally admit that despite months of promises to the contrary, he has to raise taxes.

He’s not quite ready to tell the truth, which is understandable. In a long line of contradictions, this will be his biggest yet. But as I read it, he dropped the first hint Tuesday in responding to a question about raising taxes during an interview with The Times’ Peter Nicholas.

“I’m going through wishful thinking that I’ll never have to go there,� Schwarzenegger said. “Because I just don’t like it. I try to work around and find ways so we don’t have to do that. So that’s the stage I’m in right now. Maybe someone else will say it’s denial, but I’m at that stage where I say, ‘You can’t do that.’ �

No, it’s not a call for taxes. Not by any stretch. But it’s a crack in what has been an otherwise rock-solid stand against any tax increase, barring a biblical disaster. And I, for one, am optimistic.

Yeah, I know what I said recently. I warned you that if I suddenly go soft on Schwarzenegger, it might be because of my recent head injury. But I see some progress here.

Look, it’s never easy for an elected official to be honest with the public. It goes against everything politics is about. But Schwarzenegger might be taking a baby step on the road to truth-telling, and I’m here to pat him on the back, not smack him around.

The sensible way to handle the budget mess, most of which Schwarzenegger inherited, is to make three moves: Borrow, cut and temporarily raise taxes.

Schwarzenegger has taken borrowing to unprecedented levels, and he’s begun swinging an ax. But, as he will soon be forced to divulge, that and a million photo-ops with every star-struck legislator and foreign visitor won’t make ends meet. Not by a long shot.

The economy is not expected to recover quickly enough to save him. He still doesn’t have the Indian gaming money he’s after. And no Californian should be holding his or her breath while Big Boy locates all the waste, fraud and abuse he promised to ferret out.

If Schwarzenegger doesn’t temporarily raise taxes, as Ronald Reagan and Pete Wilson did in similar jams, he will not be governor of a fantastic state filled with shining happy people who all have fantastic jobs.

He will be governor of a state where traffic stops altogether, public school teachers pray to God almighty for textbooks, college students get locked out, legions of the uninsured limp into overcrowded emergency rooms, and the L.A. County sheriff releases thousands more drunk drivers and wife-beaters because he can’t afford to keep them locked up.

Obviously, we’re all going to have to get used to leaner times now that Gray Davis is sitting at home sharpening pencils, or whatever he does these days. But we can avoid savage cuts with minimal temporary sacrifice by those who are fortunate enough to be in Schwarzenegger’s orbit.

Hiking the tax rate on the top 1% of California’s earners from 9.3% to 11% would bring in $2.4 billion a year. Those same people got a $12.7-billion federal tax cut this year. So we can rest assured they won’t be turned out of their estates because of a meager state tax increase.

To spread the pain, maybe Schwarzenegger can nick the middle class with a nominal tax increase. As I’ve told you before, California is 19th in the country in local and state taxation, and the U.S. is 27th among 30 developed nations in taxes as a percentage of gross domestic product.

In other words, a fractional temporary tax increase would not make us communists, despite foaming rants by readers who wonder why I don’t move to Cuba.

I like it here in California, that’s why. We’ve got an action governor who may be on the brink of fixing workers’ comp, and I think he may finally be on the verge of telling us the truth about the budget.

Then again, it could be the head injury.

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Steve Lopez writes Sunday, Wednesday and Friday.