In November 2002, after winning a close re-election battle against Republican Bill Simon, Gray Davis announced to Californians that the budget deficit had swelled to $35 billion. In response the state’s media denounced Davis as having caused the crisis and hiding the real facts from voters. In this atmosphere the recall effort that began in early 2003 caught on like wildfire, as the deficit was blamed on Davis, instead of on Tom McClintock’s tax cuts or the economic downturn.

Six years later we find ourselves in a similar place. The economy is in a downturn and state revenues are being hammered. Arnold Schwarzenegger is now warning that the deficit could be as large as $20 billion. So how does the media react?

Well, if you’re the San Francisco Chronicle‘s Matthew Yi, you talk about how this might help the governor and his proposed budget reforms:

The new deficit figure – 30 percent higher than the latest estimates by lawmakers – reflects a deepening fiscal crisis that has polarized the budget debate in the state Legislature, with Republicans vowing to fight tax increases and Democrats saying they won’t settle for cuts only.

Schwarzenegger, while maintaining he won’t support raising taxes, also wants to make fundamental changes in California’s budget process, and experts said today that the governor’s deficit estimate this week could help his campaign for budget reform.

The governor’s ideas include imposing a cap on spending, setting aside a so-called “rainy day fund” for lean budget years and giving him authority to impose automatic spending cuts in years when the state faces a fiscal crisis.

His proposal has gotten little traction in the state Legislature as Democrats, who control both houses, are balking at the governor’s ideas. But the widening budget deficit highlights the need for a structural change in how the state budget is worked out each year, said Larry Gerston, a political science professor at San Jose State University.

The article goes on to discuss the various reform proposals, and has a good quote from Steve Maviglio emphasizing the need to focus on immediate solutions instead of pointless “rainy day funds” and the like (when your roof is leaking, you need to fix it, not plan for the next rainstorm).

Nowhere in the article is any criticism leveled at Arnold for having created this mess. Gray Davis, victimized by a severe economic downturn, was held responsible by virtually the entire state media corps for the budget deficit. Arnold gets a pass, even though his role in creating this deficit was far more direct. Let’s review:

• Arnold refused to consider new taxes to close the last budget deficit. Instead he floated billions in bonds, leaving the state with a debt service load of $3-$4 billion each year.
• As his very first act in office, Arnold issued an executive order repealing the VLF fee increase. At the time it cost the state $4 billion a year; recent numbers from the California Budget Project suggest the current figure is $6.1 billion.
• When the first warnings of a looming budget deficit were sounded last summer, Arnold offered no leadership whatsoever to help right the state’s finances. A few tax increases in 2007 would have helped improve the state’s fiscal picture and given us a smaller, more manageable deficit today. Instead Arnold enabled the Yacht Party’s two-month hissy fit and line-itemed $700 million in health care cuts and $1.3 billion in public transit cuts from the 2007-08 budget.

The first two points suggest that Arnold is directly responsible for around $9 billion – half the projected deficit. Gray Davis had the bad luck to be elected governor in 1998. Arnold helped force Davis’ early exit from that office in 2003 on a promise to permanently fix the state’s budget. Apparently that promise is as forgotten by the media as Arnold’s role in creating the current deficit.

Madness. Simply madness.