ARNOLD THE REFORMER? IT'S TIME TO TAKE ON PENSIONS, GERRYMANDERING.

Byline: Joel Fox

AFTER winning office in a historic recall election, Gov. Arnold Schwarzenegger spent a year stabilizing an out-of-control government and working to improve the people's attitude toward Sacramento. Now it's time for Arnold the Reformer to wield his sword.

Although the administration has been focused on solving California's gnawing budget crisis, there are greater, systemic problems - in the way the state elects its legislators, manages its pensions and spends its money - that need addressing. The time is ripe for Schwarzenegger to take the lead on these reforms. The people elected him on a promise to clean up Sacramento - an enormous job that he alone has the power to accomplish.

Besides, change seems to come in California at 30-year intervals, and we're on schedule for more of it.

After the establishment of statehood in 1850, the California Constitution was rewritten in 1879. In 1910, local governments gained power and control over their own taxes. The Depression era expanded government, adding to the state's taxing powers with the introduction of the state income and sales taxes. From the mid-1960s to the mid-1970s, more constitutional revisions offered by a special commission came about, including the creation of a full-time Legislature. Finally, the people offered their own reform on runaway property taxes and changed the way government did business by passing Proposition 13 in 1978.

We're due for our 30-year overhaul, and Schwarzenegger must direct the new reforms. He would do well to follow the legacies of two notable former California governors, one Republican, one Democrat.

Republican Hiram Johnson served in the 1910s. He promoted the use of the initiative, referendum and recall, and in his inaugural address he declared that his ``first duty'' was to ``eliminate every private interest from the government and to make the public service of the State responsive solely to the people.'' Democrat Edmund G. ``Pat'' Brown, in announcing his candidacy in 1958, talked of building a great state, with the ``most important'' goal being the creation of ``hundreds of thousands of new jobs'' for California's citizens. His building program prepared California for the growth in the remainder of the century.

These first-line agenda items for the former governors - taking power from the special interests and improving the economy and job creation - were the twin jets that propelled the Schwarzenegger campaign. Now the governor, used to heavy lifting, can combine these twin tasks to create a reform legacy of his own.

Where to begin?

Since not one state Senate, Assembly or congressional seat changed party hands in the last election, there can no longer be any doubt that the Legislature created safe seats for its members at the expense of governmental accountability. Taking the power of redrawing legislative seats away from the Legislature and giving it to a special commission so that the districts will be more competitive is a good place to start.

Next is cleaning up the state pension system.

When the economy was strong, the Legislature approved public pension increases that are starting to put a strain on both local and state governments. The state's pension obligations zoomed up in a five-year period from about $200 million to $2.6 billion, and the state borrowed to pay the bill. Local governments also borrowed, and stories coming out of San Diego suggest that city could be threatened with bankruptcy largely because of its pension obligations.

Pension reforms fairer to the taxpayers, who must pick up any shortfall created by overly generous pension offerings, are needed. Assemblyman Keith Richman has proposed making public pensions more like the 401(k) accounts found in the private sector. Government would be responsible for making fixed contributions to the retirement plan, not for what the payout would be to the retiree.

Another important reform would be imposing a spending cap tied to inflation and population growth so that the government cannot spend away new money during flush times, only to find big holes in the budget when revenues drop. Even as the economy picks up, new revenues cannot keep pace with the new spending plans generated by the Legislature or the old programs that contain set, automatic increases every year. A firm spending cap could control the up-and-down California budget roller-coaster ride that the state has experienced the last decade.

Other reforms might come out of the governor's massive reorganization plan for state government operations. Savings and efficiencies were the goals of the California Performance Review, and Schwarzenegger surely will want to implement some of the suggestions that came out in the review.

Ideally, Schwarzenegger could convince the Legislature to work with him on adopting these reforms. But the interests that control the Legislature may not allow that to happen, especially when reforms would affect the legislators themselves, such as redistricting changes, or affect the influential public-employee unions, such as employee pension reform.

But this governor has a unique connection to the people. If the Legislature won't cooperate, he has other ways to reach reform goals.

Schwarzenegger could take his proposals straight to the people through multiple initiatives. Using his bully pulpit, he could make a case for major change, even call a special election next year to ask the people to endorse his reforms as soon as possible.

By embracing a number of measures to improve the way California does its business - and successfully convincing the people of the need to approve them - Arnold the Reformer could be the governor who shapes California for the 21st century.

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Drawing:

(color) no caption (Arnold Schwarzenegger)

Patrick O'Connor/Staff Artist