ARNOLD'S TEAM SHOWS ACTOR'S INCOME TAX FILES ANNUAL EARNINGS IN 8 FIGURES.

Byline: James Nash Staff Writer

Actor-turned-politician Arnold Schwarzenegger faced tough questions Sunday over his income tax returns and his vote for Proposition 187, the controversial 1994 ballot measure that sought to deny public services to illegal immigrants.

Schwarzenegger was in New York at Inner City Games, a physical and mental fitness program for which he serves as chairman of the board. But in response to inquiries from reporters, his campaign staff released his 2000 and 2001 tax returns and confirmed that he voted for Proposition 187.

Democratic Party leaders, united behind Lt. Gov. Cruz Bustamante as the party's choice if voters oust Gov. Gray Davis on Oct. 7, stepped up their attacks on Schwarzenegger, who was shown to be the front-runner in the race for governor in a Time/CNN poll.

Schwarzenegger, leading the pack of about 193 candidates, attracted 25 percent of potential voters, followed by 15 percent for Bustamante, the only Democratic officeholder on the ballot after Insurance Commissioner John Garamendi withdrew under party pressure. A second poll, conducted by Gallup and released Sunday by CNN and USA Today, found 42 percent of voters said they might vote for the actor, 72 percent take his candidacy seriously and more than half think he could do a better job than career politicians. Bustamante was far behind.

At a small rally Sunday afternoon at Pan-Pacific Park in Los Angeles' Mid-Wilshire district, Davis supporters linked Schwarzenegger to the policies of President George W. Bush and former Gov. Pete Wilson, who backed Proposition 187. Noting that Schwarzenegger has named Wilson as his campaign chairman, the anti-recall forces said a Schwarzenegger administration would resuscitate many of Wilson's policies.

``To be honest, that scares me,'' said U.S. Rep. Hilda Solis, D-El Monte. ``And that should scare working families and women.''

At the rally, which attracted about 80 people, Solis mocked Schwarzenegger's catch phrase - ``Hasta la vista, baby!'' - and said that once immigrants look at the actor's political positions, they will favor keeping Davis in office.

Pressed by reporters to release specific positions on issues, Schwarzenegger's campaign staff confirmed Sunday that the actor had voted for Proposition 187, which would have denied health care and public education to illegal immigrants. The ballot measure passed at the polls but later was ruled unconstitutional, and appeals launched under Wilson were not pursued by Democrats in the Davis administration that came next.

Schwarzenegger campaign spokesman Sean Walsh noted that the former bodybuilder immigrated legally from Austria in 1968 and has stood for the rights of legal immigrants, but Walsh said illegal immigration has put a strain on the state's finances. He said the campaign staff will release a more detailed statement after consulting with Schwarzenegger.

Speaking on ABC's ``This Week'' with George Stephanopoulos, California Democratic Party Chairman Art Torres slammed Schwarzenegger's appointment of Wilson to manage his campaign.

``There's a famous phrase in our community, and that is, judge a person by the friends he keeps,'' Torres said. ``And, unfortunately, his new chairman, Gov. Wilson, supported 187 furiously against immigrants and Latinos.''

Also Sunday, Schwarzenegger's campaign team released the candidate's tax returns for 2000 and 2001, a requirement for gubernatorial candidates. Schwarzenegger listed gross income of $31.1 million in 2000 and $26.1 million in 2001. Schwarzenegger's 2002 returns are not yet complete, his campaign team said, but likely will be released in September.

The team released copies of California Fair Political Practices Commission documents showing that Schwarzenegger and his family have received thousands of dollars worth of gifts - from a $250 box of cigars from motivational speaker Tony Robbins to $2,500 worth of shirts and sweaters from fashion designer Georgio Armani. Schwarzenegger - who was reportedly paid $27 million to $30 million for starring in this summer's ``Terminator 3'' - also received a Terminator talking skull valued at $1,000 from the sequel's producers.

The tax returns show that Schwarzenegger pays taxes in three states - California, Ohio and New York - and has wide-ranging investments in real estate, technology venture capital, movie theaters and the Starbucks coffee chain.

Schwarzenegger adviser Colleen McAndrews said he would be the wealthiest California governor in at least a generation. She and other Schwarzenegger aides declined to reveal his net worth.

``He will have a more complicated conflict-of-interest situation than any of them,'' she said, referring to the state's governors since 1974.

Sunday was the first full day to campaign since the 5 p.m. deadline Saturday for people to file as candidates in the historic election in which voters will decide whether to remove Davis, and if so, who will replace the second-term governor. Few of the high-profile candidates made public appearances.

Workers in the California Secretary of State's Office said Sunday that 193 candidates had filed the necessary combination of signatures and fees to run. Of those, 89 candidates have qualified for the ballot while 104 remain under review.

Top Republican contenders include Schwarzenegger; Pacific Palisades investment banker Bill Simon Jr., who lost to Davis in last year's general election; former baseball commissioner Peter Ueberroth, who is running as an independent; and state Sen. Tom McClintock of Thousand Oaks.

Some political observers said the size of the Republican field could be a boon for Bustamante, since the top vote-getter would become governor if more than 50 percent of voters support Davis' ouster. Pundits say Simon and McClintock are likely to split votes from conservatives, while Schwarzenegger and Ueberroth will poll better among moderates. The split among moderate and conservative Republicans could leave no Republican candidate with more votes than Bustamante.

``The arithmetic would favor Bustamante because there are four or five active Republicans at this point,'' said Sherry Bebitch Jeffe, a University of Southern California political scientist.

Republican consultant Sal Russo, who ran Simon's 2002 campaign, downplayed the concern, saying that conservative voters galvanized by the recall would support Simon over more liberal alternatives such as Schwarzenegger. But Walsh, the Schwarzenegger spokesman, said conservative voters would favor the actor because he projects leadership and decisiveness.

California Republican Party Chairman Duf Sundheim said that it's too early to sort out the competing claims but that voter anger at Davis should not benefit Bustamante.

``People want a change,'' Sundheim said. ``The Democrats are telling people if you don't like the Davis-Bustamante administration, we'll give you the Bustamante part of the Davis-Bustamante administration.''

The Associated Press contributed to this report.

James Nash, [phone]

james.nash(at)dailynews.com

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