“THEY WANT TO DESTROY ME”: HOW CALIFORNIA'S FISCAL CRISIS BECAME A WAR ON “BIG GOVERNMENT UNIONS”

Abstract

In 2003, California voters recalled their governor and elected movie actor Arnold Schwarzenegger in his place. Two crises triggered this event: large ongoing state budget deficits and a failed electricity deregulation plan. In his first year, Governor Schwarzenegger dealt with the budget through large‐scale borrowing and had a reasonably cooperative relationship with the legislature. But in 2005, with the budget still in deficit, he threatened to go to the voters with a budget solution. That decision somehow morphed into a gubernatorial campaign against “big government unions.” Ultimately, after vast sums were spent on a November 2005 special election, all the governor's initiatives lost, including one offering “paycheck protection” to public union members. The decision to antagonize unions seemed to result from excess delegation of authority by the governor to outsiders and lack of control of his own staff.