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Contra Costa Times
Jan 14, 2009 - 01:00 AM

by Steven Harmon

Schwarzenegger Accused Of Doing Bidding Of Big Business

SACRAMENTO, CA -- Gov. Arnold Schwarzenegger has chastised Democrats as being too firmly in the grasp of special interest groups and his fellow Republicans for hewing too closely to their anti-tax pledges.

But as he portrays himself as standing above the warring factions, Schwarzenegger has held fast to his own loyalties -- to the business community -- while claiming to seek a solution to the budget crisis that will simultaneously stimulate the economy.

Critics say his business-first ideology has clouded budget negotiations. Though both sides say progress has been made in the last several days, a number of obstacles remain, including the governor's demands that Democrats roll back some worker and environmental protections.

Schwarzenegger wants to eliminate the eight-hour workday to allow employers scheduling flexibility and is seeking to exempt a handful of major construction projects from environmental standards, saying exemptions from the California Environmental Quality Act would speed up job production for projects such as the $420 million Caldecott Tunnel Fourth Bore expansion on State Route 24.

"This confirms that when the chips are down, the governor goes to bat for wealthy contributors and friends," said Jamie Court, director of Consumer Watchdog, which monitors campaign contributions to the governor. "His heart is with big business."

Administration officials insist the governor has not offered any special favors to the business community, pointing to his proposed tax increases in current negotiations, as well as past efforts such as limiting greenhouse emissions, raising the minimum wage and attempting to reform the health care system.

"We're facing a $42 billion shortfall, and the governor's priority is to get people back to work," said Aaron McLear, the governor's spokesman. "His job creation measures do just that."

The administration estimates that 22,000 new jobs would be created with the exemptions and permit streamlining. CEQA is the state law that requires construction projects to minimize environmental impacts. It also allows the public to raise concerns. In addition to the CEQA exemptions, Schwarzenegger wants to create a Cabinet-level board that would have the authority to overrule state agencies' decisions on how quickly to issue building permits.

"I've not had a single conversation with big business in all the weeks I've been engaged in discussions," said Will Kempton, director of the California Department of Transportation, which has played a central role in pushing for the CEQA exemptions. "We maintain that the economic urgency compels us to create new opportunities for jobs through CEQA relief and permit streamlining."

Kempton acknowledged that a streamlined CEQA process could allow CalTrans to sidestep a decision on a pending appeal before the Alameda County Superior Court. CalTrans would be able to reapprove the project with a CEQA exemption.

A group of environmentalists, the Fourth Bore Coalition, is seeking stronger environmental protections to be put in place before allowing the Caldecott project to move forward.

Critics say "shovel-ready" projects -- and tens of thousands of jobs -- could have been protected if Schwarzenegger had agreed to the Democrats' $18 billion deficit reduction plan. He vetoed it last week. Nearly 2,000 infrastructure projects were put on hold last month when a state agency that handles financing for bond-funded projects, the Pooled Money Investment Board, had to suspend the allocation of $3.8 billion to avoid running out of cash.

"That's the part that makes me angry," said Paul Mason, deputy director of Sierra Club California. "The standoff is making the problem worse. People are losing jobs with projects that are funded by PMIB dollars. There's more than enough good projects where you don't have to waive environmental protections. It's holding the state hostage to weak environmental protections in a way that doesn't even provide economic benefit in the short term."

Instead, Schwarzenegger appears to be using the budget crisis to sidestep environmental safeguards, said Ann Smulka, chair of the Fourth Bore Coalition and a member of Berkeley's Transportation Commission.

"It seems shortsighted to do something that would have an impact for the next 20 to 30 years for jobs that may be created in the next five years," Smulka said. "Especially when mitigation would provide jobs and should be done. This just shows the power of government versus the little guy, and CEQA is there to protect the little guy."

Developers have long sought to weaken CEQA, which they contend delays construction and increases costs. Developers and others in the construction industry have contributed $21.6 million to Schwarzenegger since he took office in 2003 after promising to take moneyed influence out of Sacramento. He's taken another $15 million from banks and other businesses, according to Consumer Watchdog.

Eliminating the eight-hour workday would reduce overtime pay for workers, which means less money going into the economy, said Art Pulaski, executive secretary-treasurer of the California Federation of Labor. "It's just more money in the pocket of big business and has nothing to do with spurring on the economy," Pulaski said. "And it only makes budget negotiations more complicated when you add extraneous things that have nothing to do with the budget."

The governor is merely trying to reduce costs for employers, which will enable them to hire more employees, said Allan Zaremberg, president and CEO of CalChamber, which represents more than 16,000 businesses.

"The governor knows that without a robust private sector, there's less money for essential government programs," Zaremberg said. "To say protecting jobs means he's in the pocket of big business is a misunderstanding."

Reach Steven Harmon at 916-441-2101 or sharmon@bayareanewsgroup.com.




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