Lessons from California budget crisis

Arnold Schwarzenegger can still play the action hero. He proved that Tuesday by pulling a $15 billion bond initiative out of the smoldering trash-heap where voters were expected to send it.

Instead, Californians resoundingly approved the borrowing plan, plus a companion initiative intended to curb spending in Sacramento. They also turned down a proposal that would have allowed a 55 percent majority to pass the state budget, rather than the required two-thirds.

All three may be instructive for Nevadans, who often look west for political trends to embrace or reject. More significant, anything that happens to the Golden State's economy goes a long way to determining how much gold makes its way to Nevada.

The first lesson is Californians' willingness to deal with huge budget deficits by going into long-term debt. One voter's comment we read sounded like a shop-aholic with a no-limit credit card: "We're already in debt, so what's $15 billion more?"

The truth, however, belongs with the trust Californians have in Gov. Arnold to flex his political muscle in the statehouse. The long-term debt was preferable to draconian budget cuts or spiraling taxes, but it only buys time until the California Legislature gets its house in order. That means ratcheting down spending while the giving the economy a chance to prosper.

That's the second lesson: The companion initiative is intended to keep the state from racking up higher deficits in operating budgets and starts to build a reserve to repay the bonds. Nevada has drawn its rainy-day fund to dangerously low levels and needs to rebuild that savings account.

Finally, voters in California reiterated their approval of a two-thirds majority requirement in the Legislature. The "tyranny of the minority" arguments that echoed in Nevada when 15 Republicans blocked tax increases are so much bluster. The rest of us recognize the necessity of keeping free-spending legislators on a tight leash.

Tuesday's vote indicates Californians still believe Schwarzenegger has a vision that will lead them from the wilderness. It's good to be popular; it's far better to deliver.