Governor to face push and pull on 2005 special election.

WITH the increasing likelihood that Gov, Arnold Schwarzenegger will call a special statewide election for late next year to put a state government reform package before voters, the battle now begins among interest groups and politicians over just what reform proposals will make it onto that ballot.

Schwarzenegger has said he supports taking the redistricting process out of the hands of the Democrat-controlled Legislature and he has expressed support for a stricter state spending cap. He's also said he would put on the ballot other reforms from a massive proposed overhaul of state government if the Legislature decides not to act on them.

But the governor is likely to lace competing pressures as details of these proposals are hammered out. For example, incumbent Republican legislators--whose votes Schwarzenegger would need to pass a budget--might resist redistricting reform that could throw them out of office.

Schwarzenegger has not said whether he would endorse a redistricting initiative from Ted Costa--the "godfather" of last year's recall election --that would hand the power to redraw legislative districts to a panel of retired judges. That initiative received clearance last week to begin gathering signatures.

Costa's measure could run into legal trouble. since it would also redraw congressional district boundaries. The U.S. Supreme Court recently' remanded to a lower court a plan from Texas Republican lawmakers to redraw congressional districts in that state for the second time in a decade.

Meanwhile, a coalition of conservative groups is considering gathering signatures for an initiative to limit the annual growth of the state budget. The coalition includes the Howard Jarvis Taxpayers Association, the California Taxpayers Association and state Sen.-elect John Campbell, R-Irvine.

Schwarzenegger proposed a nearly identical spending cap last December, only to agree to a watered-down proposal from the Democrat-controlled Legislature that became Proposition 56 on the ballot last March. Schwarzenegger has not yet endorsed the taxpayer groups' initiative effort.

As for the report on overhauling the state government, timing is crucial. Schwarzenegger has said he prefers legislative action, which might not happen until the end of next summer. By then, it would be too late to take those reforms to a vote of the people in 2005.

Complicating matters is the prospect of an initiative banning driver licenses for illegal immigrants. Supporters of that measure have until March to collect at least 600,000 signatures; if successful, that initiative automatically goes onto the next statewide ballot.

"This measure would create a divisive debate on both sides," said Tim Hodson, executive director of the Center for California Studies at California State University Sacramento. "It would make the political calculations on the dynamics surrounding a special election much more difficult."

The chief concern for Schwarzenegger and state government reform advocates is that such a measure could drive thousands of predominantly Democrat Latinos to the polls and create a much more partisan atmosphere.

What's more Schwarzenegger antagonized many Latinos with his recent veto of a bill allowing driver licenses for illegal immigrants,

The bill's author, Sen. Gil Cedillo, D-Los Angeles, said he intends to reintroduce an identical bill this session, ensuring that the debate will be kept alive next year in Sacramento.

Staff reporter Howard Fine can be reached by phone at [phone], ext. 227, or by e-mail at [e-mail].