Longtime business ally leads governor’s initiative drive to rein in state spending.

Sacramento Bee

Growing up in the steel town of Beaver Falls near Pittsburgh, Allan Zaremberg learned change can be painful – even when it is for the greater good.

When an A&P Market moved into town, it closed down his family’s corner grocery store, forcing his father to go to work in a neighboring town.

“It cost my father the store, but you would never say the world is worse off because we have supermarkets… it’s just evolution,” he said.

Today, as president of the California Chamber of Commerce, Zaremberg is on the cutting edge of political evolution in California.

He is co-author of a proposed state spending cap that education advocates say will deprive schools of hundreds of millions of dollars – and produce plenty of program pain.

Gov. Arnold Schwarzenegger, who champions the initiative and today plans to ask voters to consider it in a November special election, praises Zaremberg’s “great vision and leadership.”

Critics say the one-time Air Force navigator who served as chief legislative secretary to Govs. George Deukmejian and Pete Wilson is leading the current governor to his political Waterloo.

“I think if this special election goes forward, at a $70 million cost to the public, Allan Zaremberg is going to be exhibit No. 1 of everything that is wrong with Arnold Schwarzenegger,” said Jamie Court, president of the Foundation for Taxpayer and Consumer Rights.

Zaremberg, 56, as unassuming as Schwarzenegger is flamboyant, downplays his influence. “Arnold is his own person,” he said.

But the two Republicans share an unyielding faith that what’s good for business is best for Californians.

Zaremberg’s sister, Darlene Golbitz, said she’s not sure how he came to that belief. Their parents, like most people in Beaver Falls, were Democrats.

“So we were kind of surprised that he did this – that he became this Republican person,” Golbitz said.

After graduating from Penn State University with a degree in economics, Zaremberg began a five-year military stint and was stationed at Mather Air Force Base.

He rose to the rank of captain while navigating jet tankers gassing up spy planes over Vietnam and representing his unit in national competition.

“The fact he was selected by his peers and his superiors for this competition told me he must be a pretty sharp guy,” said Dan Wood, who flew with Zaremberg and remains a friend.

After the military, Zaremberg bought a new sports car and moved for good to California to attend McGeorge Law School.

Maureen Higgins, a classmate, later worked for Zaremberg in the Deukmejian administration.

“He has a really incisive mind – one of those people who gets the big picture, but also the details,” said Higgins, who is now a lobbyist. “He’s a policy wonk and very strategic.”

After law school, Zaremberg took a job in the office of the state attorney general, where he worked under Deukmejian, whom he followed to the governor’s office.

“He has a very low-key, yet steady type of personality so that he can relate very well with others – even at times when there’s considerable tension,” Deukmejian said.

Wilson said Zaremberg is blessed with good judgment and the ability to count votes.

“He is able to determine when it is propitious to try to move,” he said. “He has the courage of his convictions. It is not an easy thing to deal with a large organization that is a membership organization, even when they are joined by a common purpose, because they won’t necessarily be united on strategy or tactics. He’s a very good advocate, and more to the point, able to organize others.”

When Wilson succeeded Deukmejian, Zaremberg remained in the governor’s office to monitor legislation.

A year later, beaten down by the grind of the job, Zaremberg went to work for the chamber. He became president and chief executive officer in 1998.

In 2003, the organization abandoned its long-standing no-endorsement policy in statewide races by backing Schwarzenegger and supporting the recall of Democratic Gov. Gray Davis.

“(Schwarzenegger’s) agenda was the same as our agenda,” said Zaremberg, adding that the chamber joined the campaign to stop Democratic Lt. Gov. Cruz Bustamante from becoming governor and raising taxes.

The chamber’s influence had waned as Davis embraced union positions toward the end of his term. When Schwarzenegger was elected, the organization played an influential role in the transition.

The chamber’s top lobbyist, Richard Costigan, left to become the governor’s chief legislative secretary – the same position Zaremberg held under Deukmejian and Wilson.

Other chamber officials went to work with Schwarzenegger, whose swearing-in luncheon was sponsored by the organization.

Last year, Schwarzenegger vetoed all 10 bills on the chamber’s “job-killer” list, including a measure that would have raised the minimum wage.

In a statement, Schwarzenegger called Zaremberg “a great Californian” and a loyal supporter “who always does what’s best for our state.”

“He was with me when we passed Proposition 49 to expand after-school programs,” the governor said. “He was with me during the recall (campaign), and he’s provided vision and leadership for implementing true reform in California.”

The chamber also spearheaded the campaign to repeal Senate Bill 2, which would have required most employers with more than 50 workers to pay at least 80 percent of their health insurance.

Afterward, state Senate President Pro Tem John Burton, who carried the legislation, called the chamber “a bunch of selfish, greedy individuals” who “do nothing to help anyone who’s an average working stiff.”

But Zaremberg contends that “SB 2 never did what John Burton wanted it to do. It never provided health care for many low-income people because they would not have been able to afford to pay 20 percent of the (insurance) premium,” he said.

Health care advocates disagree with Zaremberg’s assessment. But he maintains that subjecting businesses to more state mandates will drive jobs out of the state.

The chamber is the most visible of a coalition of several business and anti-tax groups that is raising money in support of three ballot measures backed by Schwarzenegger.

Central to the governor’s special-election agenda is the initiative that would limit each year’s spending growth to the average increase in revenues over the past three years and give the governor power to make midyear budget cuts.

Zaremberg says his measure will remedy the state’s structural budget imbalance by “smoothing out expenditures and making them more consistent with revenues.”

He also acknowledges there is “little enthusiasm” among the chamber’s 14,000 members for increased state spending.

“They don’t want their taxes raised – they want stability in taxes,” he said, arguing the state could “wipe out” its deficit in two years by maintaining current spending levels.

Roger Salazar, a spokesman for a coalition of education groups opposing Schwarzenegger, said Zaremberg’s unstinting support for business is easier to understand than the governor’s. Salazar said Schwarzenegger has become “a shill” for business and the chamber’s “poster boy.”

“Allan’s job is to put the interests of the business community first,” Salazar said. “The governor’s job is to put the interests of the people first.”

Rob Stutzman, a spokesman for Schwarzenegger, said: “The governor doesn’t carry anyone’s agenda, except an agenda of prosperity for all Californians.

“Organizations that prey upon people – the trial lawyers that fund Mr. Court and public employee unions that pay Mr. Salazar’s salary – are diametrically opposed to that.”

Schwarzenegger’s public approval ratings have dipped sharply this year, a drop Zaremberg attributes to millions of dollars that unions have spent on television commercials to “bash” the governor.

To respond, Schwarzenegger is gearing up to collect an estimated $30 million with the help of a business-led coalition, Citizens to Save California.

As someone who has weathered more than two decades of cyclical changes in California politics, Zaremberg predicts Schwarzenegger’s poll numbers will rise when the campaign for his ballot measure begins in earnest.

“As with any initiative campaign, this is not a sprint,” Zaremberg said. “This is a marathon.”
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The Bee’s Aurelio Rojas can be reached at (916) 326-5539 or [email protected]
Gary Delsohn of The Bee Capitol Bureau contributed to this report.