"A crisis in democracy"

It's great to be back. This is the sixth speech I've given at the Commonwealth Club, but my first one as a candidate. With any luck, the next one will be as your governor.

This will greatly depend on how many of California's disillusioned, disregarded, and just plain disgusted voters turn out on October 7. Which is why the heart and soul of my campaign is reaching out to new voters and inspiring disaffected ones.

The need to re-engage disaffected voters is not some idea I picked up on the way to my announcement speech. I've been writing and speaking out about the dangers of this widespread disengagement from the political process for many years.

Of course, the leaders of the Democratic and Republican parties have been only too happy to play to a shrinking universe of likely voters.

There's nothing that makes the heart of a major party hack go pitter-pat like another million voters dropping off the rolls. The fewer meddling and unpredictable voters the better. It's so much easier to play to, control and manipulate a smaller audience. The key is giving the people fewer and fewer alternatives until they just throw up their hands in disgust and give up.

And the strategy is working. Voters seem convinced that their opinions -- and their votes -- no longer matter.

Just look at California. There are over 21 million eligible voters in this state, but over 13 million of them didn't vote in the last election. Gray Davis was voted into office by only 17 percent of the eligible electorate. If that's not a crisis in democracy, I don't know what is.

So, basically, we Greeks gave you democracy and you screwed it up. Now I'm running to help fix our broken political system. My campaign is all about energizing a popular, grassroots movement that will give people a voice in their government again.

If we can bring back just a small percentage of the voters who have turned their backs on the political process -- we can totally shift the dynamics of California politics.

That's why I'm launching a college tour on September 8, designed to reach out to young people. Young people haven't stopped caring about the world; they've just stopped believing that politics is the way to make a difference. We need to change that.

And the reason for doing all this is not some abstract belief in democracy. It's because nothing will change in Sacramento if the people aren't galvanized, motivated, and mobilized. That's been the history in this country -- and in this state. It's been the people -- not elected officials -- who have been in the forefront of the great social changes of the last century.

It wasn't elected officials who led the struggle for civil rights or the drive for women's rights or the fight to end the war in Vietnam. It was the people. And without the outrage of at least a critical mass of the people we'll never be able to take our government back.

In the next few minutes, I could offer up an amazing array of programs designed to balance the budget, improve our schools, further racial and economic justice, and protect the environment -- and, by the way, I plan to -- but unless I can arouse and animate the electorate, and convince them to keep the pressure on the Legislature, the partisan gridlock that we see in Sacramento will continue.

The time has come for a people's uprising -- a bottom up rescue of the state of California. Traditional politicians are not going to save us. We have to save ourselves.

And to do that we're going to need an independent leader in Sacramento who is dedicated to fairness and justice, and who will put workers and families at the top of her agenda.

That's precisely the kind of independent leadership I intend to provide.

So what is independent leadership? Well, first off, let me tell you what it's not:

Independent leadership isn't kowtowing to big buck donors like Cruz Bustamante did when he released his budget plan last week. He called for "Tough Love" for everyone in California except the prison guards' union and Indian gaming interests -- not coincidentally, two of his biggest campaign contributors.

Expecting independent leadership from a bought-and-paid-for career politician like Bustamante is like expecting a tax-obsessed Bush Republican like Schwarzenegger to actually "clean house" in Sacramento.

That's another thing independent leadership isn't: claiming to be an outsider while filling your campaign staff with a Who's Who of GOP insiders, including Pete Wilson, George Shultz, and Mike Boskin, an economic advisor to President Bush.

I mean, is there really anybody out there who, after surveying the economic landscape of California, can seriously say: Yep, what this state needs is some more Bush-onomics. It's worked so well nationally; we just need to get some more of that here?

Okay, enough about what independent leadership isn't. Here's what it is:

First and foremost, independent leadership is telling people the truth, not what they want to hear.

And that's what I'm offering. I'm going to say the things that the others aren't willing to say.

Let's start with the truth about the budget:

Other candidates -- at least some other candidates -- are talking about how they would solve the current budget crisis. But no one is talking about how to avoid finding ourselves in this mess again.

The truth is our current fiscal crisis is actually part of a long-term structural crisis in the way we collect revenue.

Because we rely too heavily on income tax and sales tax to fill our state's coffers, California is subject to enormous fluctuations in revenues. This is obvious to anyone who looks at our state finances. A bad year in Silicon Valley and, boom, there go 3,000 teachers.

To stabilize our finances, we need to build a budget based on a more predictable revenue source -- namely, property taxes. And that means being willing to touch the electrified third rail of California politics and reform Proposition 13.

There, I said it. And what do you know, lightning didn't strike me dead.

But seriously, we really do need to revisit Prop. 13 -- and if this recall campaign does nothing more than reopen a debate on this crucial issue, it will be worth much more to California than the $60 million they say this special election will cost.

The fact is, California has an entrepreneurial economy, and we don't want to change that. But this kind of economy is often subject to boom and bust cycles -- which can be a disaster for governments trying to set budgets and fund vital programs, like education and health care.

So we must restructure the way California raises revenues.

Let me make myself clear. I'm not talking about doing away with the protections Prop. 13 gives to seniors and middle class homeowners. And I don't want to return to the days when people were forced to sell their homes because they couldn't afford to pay the property tax. But we ought to stop the way Prop. 13 is being used to artificially lower the tax burden on corporations and wealthy homeowners.

So I'm not saying end it -- I'm saying mend it. Plenty of laws, even good ones, get abused. When that happens, it doesn't mean we have to get rid of them, but it also doesn't mean we should simply ignore the abuse and carry on. We need to make changes to bring the reality of the law closer to the spirit of its intention.

Arnold Schwarzenegger brought Warren Buffett out to California, but I'm the one who is going to take his advice.

Arnold told Buffett that if he mentioned Prop. 13 again he'd make him do 500 sit-ups. I say: Keep telling the truth about Prop. 13, Warren, and I'll make you a big fat Greek dinner.

It's a question of fairness. We must protect the interests of average homeowners, but we also must make sure that those who can afford to pay their fair share -- like Warren Buffett -- do so. And we must fairly assess commercial property -- but not at the expense of small businesses, which account for the bulk of job creation and must be given special consideration.

And keep in mind: No change can be made to Prop. 13 unless it is approved by the voters. That's the law.

So, with the approval of the voters, the mission of an independent leader must be to fundamentally restructure our budget. And if we do this guided by our principles and our values, and not by the conventional wisdom, we will end up with a better, more just, and more prosperous state.

That's where real leadership comes in. Did anyone notice earlier this year when Gray Davis vowed to veto any budget that did not contain a fundamental overhaul of our state's tax structure? I actually agreed with him. And then he went along with the second straight budget that completely failed to address the underlying causes of our state's fiscal crisis.

If you want to talk about a failure of leadership in Sacramento, all you've got to do is look at a governor who beats his chest promising to do what's right for the good of our state, and then slinks away passively as an another bad budget deal is cut.

And the claims of another candidate notwithstanding, I'm assuming you do care about figures, so here, specifically, in dollars and cents terms, is what I'm recommending we do to deal with our budget deficit:

For starters, I would close the outrageous "change-of-ownership" loophole that allows corporate owners of commercial property in California to avoid paying over $2 billion in property taxes a year. It's fiscally unsound, and socially unfair. Corporations used to provide 14 percent of our state's tax revenue. Today they provide only 8 percent, just a little more than half of what they used to pay.

But our politicians would rather close hospitals than close loopholes. As governor, I will demand that the Legislature examine each and every tax loophole and close any of them that serve special interests instead of the public's interest.

I would specifically shut down the domestic corporate tax shelters that are costing our state roughly $1.34 billion a year, and close the offshore tax loopholes that are depriving the state of another $400 million annually.

And I would campaign for an initiative to change the law that requires a two-thirds majority to close a tax loophole but only a simple majority vote to open one.

California is one of only three states that require a two-thirds vote to pass a budget and one of only eight that impose this requirement on any tax increase. This undemocratic constraint has played a big part in causing the political paralysis plaguing Sacramento. Majority rule was good enough for the Founding Fathers -- it should be good enough for passing a budget in Sacramento.

Back to dollars and cents: I'd raise an additional $300 million a year by imposing a severance tax on oil that is pumped out of the ground in California. California is the only state in the union that does not have a severance tax on oil. And I've got a feeling that the Schwarzenegger economic team, co-chaired by George Shultz, one of the architects of our country's disastrous oil policy that has made us so dependent on foreign oil, won't be making this same recommendation.

What else? Well, I'd take in another $1.5 billion by taxing cigarettes and alcohol -- something Cruz Bustamante also proposed. But here's the crucial difference: I'll do it; he won't. Why can't we trust him? Simple: he has a long history of taking money from tobacco companies and lobbyists, including $40,000 from Philip Morris and $22,500 from The Tobacco Institute. And Big Tobacco has gotten its money's worth: Bustamante voted against California's landmark ban on workplace smoking, and after the ban passed, he voted to weaken it.

So when Bustamante says that he'll raise revenue by putting the squeeze on tobacco interests, the odds are he's just blowing smoke.

That's why you need an independent leader whose policies cannot be bought by the highest bidder.

And in modern California politics that includes the Indian gaming interests that have poured an absolutely astounding $120 million into state political campaigns since 1998. While many California tribes continue to live in abject poverty a few have become wealthy through gaming. These tribes have contributed over $1.8 million in direct donations to Cruz Bustamante since 1993, including a $300,000 donation given just this week by a tribe in San Diego.

The people of California, and, indeed, all Americans owe a debt to the original people of this land. It's a debt that can never truly be repaid. In light of the historical mistreatment of Native Americans, both the state and the federal government must do everything they can to support the economic development and political autonomy of tribal peoples.

But that said, I firmly believe that independent leadership means collecting a share of the $5 billion in revenue raised at casinos on Indian land inside California.

Gray Davis, who has received close to $1 million from Indian gaming interests in the past two years alone, negotiated the worst deals possible for the people of California. The state general fund does not see a penny of gaming revenue. Contrast that with Connecticut, one of the first states to allow Indian gaming, which collects 25 percent of gaming revenue. Other states collect five to 10 percent or more.

I would make sure I negotiate fair, two-way deals, in which both the needs of the tribes and the needs of the state are met. Bottom line: I would never, ever sign a compact that did not contain a substantial revenue share for California and for the communities where the casinos are located.

You can bet that Cruz Bustamante will never make this promise -- not when it would mean risking the ire of his biggest backer. He actually said last week that the gaming tribes are paying enough already. So a $5 billion industry that pays absolutely nothing to the California general fund is paying enough? It just goes to show how campaign contributions addle the brain.

My position is not an attack on Indian gaming. It is an attack on a failed policy that deprives the state of a major source of revenue.

Independent leadership is also about making the tough decisions about what to cut. I'd start by lopping over a billion dollars off our state's bloated prison budget.

I would do this by canceling the Delano II prison construction project -- saving nearly $600 million. With that money we could pay the salaries of 17,554 new public school teachers. Or we could restore the unconscionable recent cuts in higher education as well as roll back tuition fee increases at every public college and university in California. And still have $150 million left to spend.

And I would freeze prison guard salaries at 2002 levels. This year the guards are getting their third big pay raise since 1998, a 7.5 percent pay hike that will cost the state $120 million. By 2006, that hike will go up to 34 percent, costing the state an additional $700 million a year, every year. Meanwhile we are closing hospitals and health centers.

Why such perverted priorities? Simple: It's because the prison guards' union has been Gray Davis's biggest backer, giving him over $3 million since he's been in office. Once again, campaign cash rules the day.

Bustamante won't call for these same cuts because he too is in the pocket of the prison guards. And Schwarzenegger won't do it because it would mean coming out against the Three Strikes law and in favor of reducing the prison population by lowering the number of nonviolent drug offenders living behind bars -- which would save the state $400 million a year.

But traditional politicians are completely risk averse -- which is why not a single statewide elected official backed Prop 36, which directed nonviolent drug offenders into treatment instead of jail.

I will be offering an even more detailed budget proposal after Labor Day, but these examples should give you a clear sense of the kind of values that will inform my priorities.

As we've seen -- from the oil severance tax to corporate property tax loopholes to tobacco interests to Indian gaming to our skyrocketing prisons budget -- Big Money is calling the tune in California. Our politics have become little more than legalized bribery.

Take the stomach-turning example of petroleum giant Tosco, which, after donating $70,500 to Gray Davis' 2000 reelection campaign, was allowed to increase the amount of deadly, highly toxic chemicals it dumps into San Francisco Bay.

The connection between the donation and the payback couldn't be more obvious -- or more despicable. For seven years the company, one of California's largest polluters, had tried to get the state water board to relax the pollution limits at its Avon refinery, right here in your own backyard. For seven years its efforts had failed. Then, on February 17, 2000 -- just one day after the board once again voted down the company's request -- Tosco cut Davis a massive campaign check, 10 times bigger than any previous donation it had given him. Another five figure check followed and, hey, whaddya know, a few months later the water board -- whose members are, not coincidentally, appointed by Davis -- changed its mind and allowed Tosco to boost the amount of deadly Dioxin it could dump into the Bay. In effect, selling out the health of the people of California for an infusion of campaign cash.

It's enough to make you sick -- literally.

I keep hearing people say that the recall race is bizarre. Well, I ask you, which is more bizarre: Gary Coleman running for governor or Tosco donating $70,000 and being allowed to dump toxic chemicals into our water?

Some people look at laws and ask: Why? I look at them and ask: Who paid for them?

And the most effective means for restoring the integrity of our electoral process, leveling the playing field among qualified candidates, and repairing the public's tattered faith in its elected representatives is through the public financing of political campaigns.

After all, he who pays the piper calls the tune. If someone's going to own the politicians, it might as well be us, the people of California.

There are three recurring complaints you hear about our current political system: campaigns cost too much; special interests have too much influence; and far too many good people choose not to run simply because they don't want to spend hours each day begging for money. I know, for instance, that Arnold deeply resents the five minutes he spent convincing himself to donate $2 million to his own campaign.

Full public financing addresses every one of these core problems: it lowers campaign spending, it breaks the direct link between special interest donors and elected officials, it levels the playing field so good people have a viable chance of winning, and it ends the money chase for those running and those already in office.

And the good news is, the Clean Money/Clean Elections concept is not some pie-in-the-sky fantasy. It's already the law in five states. And in the two states where it's fully implemented, Maine and Arizona, the results have been inspiring: more people running for office, more competition, more contested races, more women and minorities running, and a more independent pool of legislators elected.

If I am elected I will make a Clean Money bill one of my top legislative priorities. Think of it: No hard money, no soft money, no endless dialing for dollars, no quid pro dough deals. Just candidates and elected officials beholden to no one but the voters. Americans believe democracy should be a marketplace of ideas, but they don't believe it should be for sale. If you have a lot of money, you should be able to buy a shiny new car, a cool flat screen TV, or a great vacation in Hawaii. But you shouldn't be able to buy political power.

Independent leadership is all about resetting priorities.

This is not a question of right or left. It's a question of right or wrong.

My priorities will be the priorities any mother has for her children: a quality education, affordable and readily accessible health care, and a safe clean world to live in. No mother in California should have to send her kids off to crumbling, decaying, rat-infested schools -- as hundreds of thousands of them currently do. No mother should have to sit in a hospital waiting room for hours on end waiting for a doctor to see her sick child because she can't afford health insurance for herself and her kids -- but that's the case right now. And no mother should have to worry about whether her children will grow up in a world choked with polluted air and water.

It's just common sense that we make sure every child in California is covered by health insurance. It's just common sense that we protect our environment from destruction, and fight racial discrimination. It's just common sense that all our schools should perform well -- and that our college students should be able to afford a quality education.

With these priorities as my guide, if I am elected, I will immediately introduce a motion to roll back state university and community college tuition increases to an affordable level, and I will immediately settle the Williams vs. State of California lawsuit filed by nearly one million students who are sick and tired of being sent to substandard schools with no books, no chalk, no working bathrooms. Just plenty of rats and roaches. A lawsuit which Gray Davis has spent $18 million dollars of your money fighting. The children of California deserve better than that.

One can only wonder: How many textbooks would that $18 million have bought? How many blackboards? How many pens, pencils, computers, calculators, and art supplies? How many credentialed teachers could have been hired?

One of our leaders' greatest failures is in the area of health care, where 6.8 million Californians remain uninsured -- the fourth highest rate in the nation.

If elected, I will lead the fight in Sacramento to provide universal health care coverage to the people of California.

Universal healthcare will control the growth of healthcare spending by simplifying administration and by purchasing pharmaceuticals and medical equipment in bulk. In addition to providing real budget savings, under a single-payer system over 95 percent of all money dedicated to healthcare goes toward healthcare, and not to pay the salary of some bureaucrat who just denied you your healthcare coverage.

Universal healthcare requires no new spending. In fact, recent studies show that the actual savings of a single-payer system would range from $3 to $8 billion dollars a year. So we could achieve quality health care for all Californians for less money, and reclaim the Golden State as a leader and innovator among states.

So why haven't we? You know the answer: In 2002, drug companies and other medical interests gave over $5 million dollars to both Democrats and Republicans to prevent much-needed measures like universal healthcare. We cannot expect the major political parties to lead this fight for the people's well being. It must be led by an independent voice. I promise to be that voice.

I also promise to champion a sane energy policy that protects the environment, stresses fuel efficiency, and invests in clean and renewable energy.

Forty-one years ago, President John F. Kennedy challenged America to realize its greatness, calling for an Apollo Project to put a man on the moon in a decade. Eight years later, Neil Armstrong bounced across the lunar surface.

As governor, I would use my bully pulpit to call on all Californians to commit themselves to the goal of achieving energy independence in a decade -- with no more environmentally destructive drilling, with no more unsafe nuclear waste.

We can do this by investing in energy efficiency, modern electric infrastructure, and renewables like solar and wind. We can do it by investing in technologies that bring us closer to realizing the hydrogen future, the next generation of hybrid cars, and advanced transit options that are clean, faster and more convenient.

Some in California are already taking the lead. Here in San Francisco, solar revenue bonds are paying for solarizing public buildings and San Diego recently initiated a similar project to retrofit their buildings with solar panels. And after an initial investment of $5.8 million dollars, the city of San Jose has saved $12.6 million from energy efficiency measures over the last three years.

Just as government provided the initial public funding for what became the Internet, government needs to play a role in getting the energy efficient bandwagon rolling. We need a governor who will promote hybrids, not Hummers. We need a Governor who will invest in the construction of "green buildings" and energy efficient homes and offices -- not one that cozies up to Ken Lay in the midst of California's energy crisis.

And we surely don't need a governor who will open the State House door to George Bush, Dick Cheney and all their cronies who traffic in the politics of Big Oil. Today, I ask for your support in making California free and independent of these oily interests and the outmoded policies crafted to serve them.

Let me end by saying a word about how appropriate it is that we gather here today, one day shy of 40 years since Martin Luther King led the march on Washington. Unfortunately, here in California, some still haven't taken Dr. King's message to heart.

Those who put forth discriminatory measures like Proposition 54 need to be told loud and clear, in no uncertain terms, that discrimination in any form, no matter how disguised, has no place in California. We're better than that.

From this immigrant's mouth to your ears, let there be no mistake: Proposition 54 is bad for health care, bad for education, bad for public policy.

And if Ward Connerly is so convinced of the virtue of Prop. 54, then I challenge him to a debate on the issue -- any time, any place -- so I can lay out all the evidence that his proposition is nothing more than a thinly veiled attempt to allow racial discrimination without leaving a paper trail.

California used to be a land of sunshine and promises. The promise of a good job, a good school, an unmatched quality of life. But for millions of Californians these promises have been broken. The once Golden State has been tarnished.

But the sun is still shining and I still believe that our best days lie ahead of us -- if we do what needs to be done. Together we can save our state.

The first American Revolution took place on the East coast. The new American Revolution can take place right here, right now in California. Join us -- and on October 7, help us fire a political shot that will be heard 'round the world.