DEMS IGNORE ARNOLD DUELING AGENDAS CREATE RECIPE FOR TERMINAL GRIDLOCK IN SACRAMENTO.

Byline: Harrison Sheppard and David M. Drucker Sacramento Bureau

SACRAMENTO - As Gov. Arnold Schwarzenegger prepares to submit petitions to put his government-reform plans on the ballot, Democrats are pursuing an agenda that ignores his priorities of fiscal and political reform.

The Democratic agenda focuses on issues such as transportation and health care, which they argue matter more to ordinary Californians, even if it means tax increases for many people.

Since those programs will need the governor's signature to become law, they are likely to get the same response from Schwarzenegger as his priorities have received from the Democrats. And that means continuing gridlock on important issues.

``They are puppets, and the puppeteers are the powerful public employee unions, and they have obstructed any movement toward reform in the Legislature,'' Schwarzenegger spokesman Rob Stutzman said about the Democrats.

Schwarzenegger, stumbling recently in advancing his reform proposals, pulled back his pension plan and softened his stance on redistricting, but still believes he is on track to get most of his agenda on the ballot in a special election this fall.

Stutzman said he expects signatures for the governor's proposed ballot measures will start to be submitted to the Secretary of State's Office this week.

Responding to criticism from the governor's camp that Democrats are being obstructionist without offering counterproposals, Steve Maviglio, a spokesman for Assembly Speaker Fabian Nunez, D-Los Angeles, said Schwarzenegger's proposals have changed over time. And that has made it harder to analyze them and make counterproposals.

For example, the governor's idea of merit pay for teachers now is being changed to a concept called combat pay for teachers in the worst-performing schools.

``On the initiatives, it's difficult to offer a counterproposal when you don't know what the bottom line is for the governor,'' Maviglio said. ``It's like Jell-O - it's wiggling and moving all over the place.''

The transportation and health programs ``are the things people care about, not redistricting,'' Maviglio said. ``There's really no incentive for Democrats to put up proposals on issues that people aren't waking up in the morning and talking about.''

The Democrats' agenda is topped by several fundamental issues that remain perennial problems in California - transportation, health care and education. Most of their measures are still pending in the Legislature, which has until the end of the session in September to send them to the governor.

Recently, Assembly Democrats unveiled a complicated transportation funding scheme that involves lowering the gas tax, raising the statewide sales tax and borrowing $10 billion to help jump-start transportation projects.

They say the plan ultimately will be revenue-neutral to Californians, although critics said it could shift a greater tax burden onto the working poor. The proposal has not yet been formally written in a form for introduction as a bill.

On health care, the Democrats are focusing on a package of measures that would make it easier for Californians to obtain prescription drugs from Canada, which Schwarzenegger opposes, based on concerns about drug safety and federal legality.

Simultaneously, they killed in committee the plan Schwarzenegger put together with pharmaceutical companies, in months of negotiations, that the governor said would have reduced the price of drugs for millions of low-income Californians.

On education, Senate President Pro Tem Don Perata, D-Oakland, said recently that Democrats will fight to bring California's education spending at least up to the national average, which would mean $4 billion more than the $2.9 billion increase Schwarzenegger has proposed. Perata believes taxes should be raised if necessary to reach that level.

Senate Democrats have also proposed changes in the state education funding formulas to give local districts more accountability and make it easier for local voters to approve an increase in parcel taxes to fund schools. But Democrats remain opposed to a bill that could save school districts $300 million annually by allowing contracting out for services; districts currently are required to employ union members or firms that pay union wages.

The Democratic agenda is far less known to the public than the governor's plans, according to analysts.

Tim Hodson, executive director of the Center for California Studies, said it is more difficult for legislative Democrats to advance a coherent agenda because they need so many of them in the caucus to agree, while the governor is the only person who has to approve his agenda.

``It's a truism in politics that it's far easier to oppose than to govern,'' Hodson said.

He believes the governor would be better off not calling a special election this year, while the Democrats would be smart to try to continue negotiating with him to come up with mutually acceptable proposals for the June 2006 ballot, rather than continue to be seen as obstructionists.

``Just because a governor proposes something does not mean that the other party is obligated to come up with a counterproposal,'' Hodson said.

``If, for example, the majority party does not feel there is anything wrong with (the Public Employees Retirement System), simply because the governor says we need to reform, it doesn't mean they have to say OK, we're now under an obligation to reform it, if (majority party members) don't think there's anything that needs to be reformed.''

Harrison Sheppard, [phone]

harrison.sheppard(at)dailynews.com

CAPTION(S):

3 photos, box

Photo:

(1) Governor Arnold Schwarzenegger

(2) President Pro Tem Senator Don Perata

(3) Speaker of the Assembly Fabian Nunez

Box:

DEMOCRATS' AGENDA

SOURCE: Daily News research

Gregg Miller/Staff Artist