Campaign watch

Candidate: Arnold Schwarzenegger

Topic: The new law allowing illegal immigrants to receive driver’s licenses

Statement: “The attorney general of California, Bill Lockyer, is against” the law. Schwarzenegger has made the statement in several recent appearances, including an interview on the Fox television network’s Bill O’Reilly show Wednesday.

Analysis: Incorrect. “That’s not true. We do not oppose it,” said Hallye Jordan, a spokeswoman for Lockyer. Lockyer opposed an earlier version of the bill that Gov. Gray Davis vetoed last year. The attorney general is “neutral” on the current law, Jordan said.

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Candidate: Cruz Bustamante

Topic: The state budget deficit

Statement: The budget shortfall is “a mess that was created, I believe, as a result of the energy terrorists who basically stole $10 [billion] to $15 billion from our budget.” Bustamante has made variations of that assertion in several recent appearances, most recently during a candidate debate in Los Angeles on Tuesday. “They have basically taken so much money out of our economy that we’ve been unable to close the budget hole,” he said.

Analysis: Incorrect. California did have to spend billions of dollars to pay for a spike in electricity costs two years ago; the state eventually floated bonds to cover that expense. But those bonds are being repaid by rate increases on electricity customers, not by taxpayers and do not directly affect the state budget.

“The state did run up a tab during the crisis period that was funded out of general revenue,” said Frank Wolak, a professor of economics at Stanford University. “But is the energy crisis responsible for the state budget problems? No.”

Instead, the $38-billion shortfall in last year’s budget was primarily the result of volatile state revenues, said Kim Rueben, a research fellow at the San Francisco-based Public Policy Institute of California.

Energy costs may have had some indirect effect on the state’s finances by straining California’s economy and thus reducing tax revenue, said Chris Weare, a research fellow at the Public Policy Institute of California. But calculating that impact is difficult because of other factors at work -- namely, the national economic downturn and the collapse of the technology industry, he said.

Compiled by Tim Reiterman and Matea Gold

Los Angeles Times