AD WATCH

Californians for a Balanced Budget Yes on 57 and 58 is putting three new television advertisements on the air this week. The political committee is largely funded through donations to Gov. Arnold Schwarzenegger’s political committee, the California Recovery Team.

In the ads, Republican Schwarzenegger and state Controller Steve Westly, a Democrat, argue for passage of Proposition 57, a $15-billion deficit bond, and Proposition 58, a balanced-budget amendment to the state Constitution, on the March 2 ballot. One ad, featuring Schwarzenegger, runs 30 seconds and is now appearing statewide. The other two run 15 seconds each and begin airing statewide this weekend. The new ads will supplement the first campaign ad for the propositions, which debuted last week.

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Title: History

Producer: Don Sipple

Script: Schwarzenegger, in a suit and tie, walks through a darkened room with lit-up boxes behind him showing graphics of the two propositions in the background. The governor says as he walks: “I am committed to putting our financial house in order. And I need your help. After all, it is your money.”

The screen switches from Schwarzenegger to two graphs. The first is a bar graph showing the “California State Budget 1998-2003.” The graph shows state revenue increasing 25% while spending goes up 43%. The second graph shows the state’s structural shortfall over that time.

As the graphs appear, a female voice says: “For years, the state has been overspending. And deficits were papered over with borrowing. Now $14 billion of debt comes due in June.”

Finally, the screen returns to Schwarzenegger, still walking through the darkened room. He says: “Two measures on the March ballot are critical to resolve the state’s fiscal crisis. Prop. 57 refinances past deficit borrowing at low interest rates. And Prop. 58 tears up the credit card for good. Please join me in voting yes on 57 and 58.”

At the conclusion, the screen fills with the 57 and 58 campaign logo along with text describing how the ad was paid for.

The first of the two 15-second ads repeats the second half of the 30-second script.

The other 15-second ad begins with a graphic that reads: “Bipartisan Budget Plan” and brief text descriptions of Propositions 57 and 58.

Westly is heard saying: “Proposition 57 and 58 were put on the ballot by... “

The screen then switches directly to Westly, who is standing in the same darkened room that Schwarzenegger appeared in. He stares into the camera and continues: “ ... Democrats and Republicans working together to solve the state’s fiscal crisis. To protect our schools, our jobs and healthcare for seniors, vote yes on 57 and 58.” A graphic describes Westly as a Democrat.

Accuracy: Westly is correct in describing bipartisan support for the measures. The Legislature voted in December to put the propositions on the ballot. But passage of 57 and 58 does not represent a “budget plan” or specifically protect schools or health care. Those matters are addressed in the actual state budget.

In his budget, Schwarzenegger has proposed enrollment caps on some health programs, and a temporary suspension of part of a mandated increase in education spending.

State Treasurer Phil Angelides argues that instead of borrowing to cover the deficit, the state should raise taxes to prevent cuts to programs.

In the two Schwarzenegger ads, the governor correctly points out that the money involved belongs to taxpayers and that the state has billions in short-term debt due in June. But his description of the measures is incomplete.

Proposition 57 does refinance previous borrowing but also includes more than $3 billion for new expenses in the upcoming budget year, including debt service payments and state employee compensation costs.

And though the borrowing would have a lower annual cost than borrowing approved by Gov. Gray Davis -- which is subject to legal challenge -- the total cost of repayment would be higher because more money would be borrowed over a longer period.

Although Proposition 58 prohibits future deficit borrowing in the manner of the Proposition 57 deficit bond, it does not tear up the state’s credit card for good. Proposition 58 would permit short-term borrowing and other types of borrowing as long as they are not labeled deficit bonds.

Schwarzenegger’s own 2004-05 budget calls for borrowing $950 million to cover a payment the state must make to the pension fund for government workers.

Analysis: Schwarzenegger’s advertisement strongly echoes the populism of his recall campaign against then-Gov. Gray Davis. His request for the “help” of the people has been one of his most effective political appeals.

Westly hits another argument that tests well in polls: that the campaign for Propositions 57 and 58 has broad bipartisan support.

The television spots describe the measures themselves in only the simplest terms.

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Compiled by Times staff writer Joe Mathews

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Los Angeles Times