Jerry Brown's Broken Budget

The California governor betrays his promise to deliver an "honest" budget.

California Gov. Jerry Brown’s “Moonbeam” shtick has long passed its expiration date, taking about as long to go from “cute” to “annoying” as it did for Arnold Schwarzenegger’s Terminator references.

On Monday, in announcing that the state’s budget deficit ballooned from $9.2 billion to $15.7 billion in a mere four months, the governor let loose with this Brown-ism: “The capitalist system is not coincident with your expectations of exactitude.” In other words, the market system “doesn’t play out like we may want it to.”

That entertaining play of words might have gotten a chuckle or two in the past, but the governor—not the capitalistic system—is largely responsible for the budget mess he detailed that day. The state continues to face enormous shortfalls precisely because this governor, betrayed the promises he made to Californians.

Brown promised us an honest budget. But, according to economists who looked at a budget deficit that has grown by 70 percent since January, there was nothing in the economy that caused the tidal wave of red ink. The problem: Gov. Brown’s budget was dishonest. Just like Schwarzenegger and Gray Davis before him, Brown didn’t have the courage or political skill to bring state spending in line with revenues, so he relied on overly aggressive economic forecasts to paper over the enduring mess.

Brown has no interest in cutting government, even though the state’s still-huge budget is filled with waste, inefficiency and redundancy. The state government meddles in just about every aspect of our lives. California’s cost to provide services is far higher than most other states, thanks largely to the enormous overhead exacted from a public sector that enjoys the most lush pension and health care benefits in the nation. We’re supposed to believe the government is cut to the bone?

The Legislature has refused to pursue pension reform, which would not only slice needed dollars from the deficit, but would keep the state’s localities from hitting the financial wall. But legislators don’t have time for it, busy as they are with such pressing matters as banning foie gras. If Brown spent a tenth of the time pushing his pension plan as he does pushing for tax hikes, he might actually get somewhere.

Brown has tried to play on his cheapskate image, honed in the 1970s, by cutting a few pennies from, say, the Commission on the Status of Women, but he has not looked at serious reforms, alternatives to the government’s costly but shoddy provision of services. He recently joked that there’s plenty of money “sloshing around” in California, and that the rich are doing just fine. But such words are only a reminder of what a bore the man has become.

A growing economy could surely bring in new revenues, but the state’s leaders are too busy punishing the private sector to understand that message.

Like other leaders of his party, he doesn’t take seriously the evidence—such as California’s lowest ranking of states to do business, per Chief Executive magazine’s latest survey, or the USC survey showing dramatically slowing population growth—that the rich, moderately rich, and entrepreneurial middle class are high-tailing it to other states. Yes, people are still coming to California—but taxpayers are being replaced largely with tax consumers.

The California government’s war of attrition against the most productive members of its society might explain another reason that the deficit keeps getting worse. “California is suffering [a] tax drought even as most other states enjoy a revenue rebound,” The Wall Street Journal opined. “State tax collections were up nationally by 8.9 percent last year, according to the Census Bureau, and this year revenues are up by double digits in many states.” But California defied that trend.

I argued recently for Bloomberg that there’s a case for staying in California, in that we ought to stay put and fight for our home rather than pick up roots and try to find a better place. But it’s hard to imagine any new business choosing to move or expand here, despite localized growth (San Jose) and the state’s appeal for those who already have made their fortune. We have tools to revive our state (i.e., the initiative process), but someone save us from the crowd that governs us these days.

Brown, who helped create the state’s current mess during his last go round as governor thanks to the vast expansions of power he granted to public-sector unions and his small-is-beautiful approach to infrastructure, positioned himself as the man best able to wrestle with the state’s problems. Instead of confronting tough problems, he’s looking for the easy route—cobbled-together budgets and tax increases as he protects the coddled public sector from competition and reform.

Brown also is committed to spending our way out of the mess, as he promotes other dishonest schemes such as a bloated high-speed rail system based on phantasmagorical funding schemes and “green jobs” programs based on equal parts subsidy and fantasy. The cap-and-trade system embraced by Schwarzenegger and Brown alike is killing business and won’t provide any cleaner air, designed as it merely to prod other states and the feds into following suit. That’s California exceptionalism these days—following its own ideologically driven path right over the cliff. “You’ve got to try many paths because a lot of them don’t work,” Brown said at a March economics conference. “I’m open, I’m curious, and I like to try new things.”

But Brown is open to only one idea—new taxes. He’s using threats of draconian cuts to coerce the public into giving the state government and the unions that dominate it even more of their hard-earned money. Voters should understand that if they give him what he wants, we’ll never get real reform and Brown and his allies will be back asking for even more money sometime soon. That’s even less entertaining than the governor’s boring rhetoric.

Steven Greenhut is vice president of journalism at the Franklin Center for Government and Public Integrity.

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  • Aresen||

    “The capitalist system is not coincident with your expectations of exactitude.” In other words, the market system “doesn’t play out like we may want it to.”

    "We've been beating the cow daily. We don't understand why it isn't producing more milk."

  • Scruffy Nerfherder||

    That is a whopper of a statement from Brown but completely indicative of his socialist leanings. He yearns for the perfect society where everything is predictable by those with the superior capabilities of intellect and motive, a Foundation and California.

  • ||

    In reality, Greenhut writes, Brown has no interest in cutting government, even though the state’s still-huge budget is filled with waste, inefficiency, and redundancy.

    That's because cutting government is against everything these stand for, philosphically. Financial reality be damned, far better to have not enough (or no) money in the coffers than to not have enough government.

  • Sudden||

    Woe to us stuck here in this wretched waste of a state.

  • Sudden||

    It's also worth mentioning that the state govt uses every tactic in its arsenal to try and rally support for further tax increases. My wife is a teacher, and my sister a school administrator. It seems that virtually every year, they issue pink slips to every teacher in every district, partly as a show, in order to galvanize support for tax increase ballot measures. Most of those teachers end up getting extended for the following year, but they use their fear as a means of exacting further support from frightened teachers and parents for further annexation of our money. It's sadistic, sick, and twisted.

  • Sevo||

    "It seems that virtually every year, they issue pink slips to every teacher in every district, partly as a show, in order to galvanize support for tax increase ballot measures."

    I was told by a GF-teacher some years back that the mass 'firings' are required by the union; I would guess at least part of the reason is the union's ability to 'save' most teachers every year adds to the loyalty.
    So both the government and the union win; the taxpayers and kids lose.

  • Paul.||

    It's sadistic, sick, and twisted.

    No, it's government.

  • sarcasmic||

    "When plunder becomes a way of life for a group of men living together in society, they create for themselves in the course of time a legal system that authorizes it and a moral code that glorifies it"
    ― Bastiat
  • Enjoy Every Sandwich||

    I wonder how long it will be before California imitates Chucky Schumer and tries to put in some sort of "Ex-Patriot Act" to punish those who leave in search of lower taxes.

  • DJF||

    Isn't it called serfdom, where a person is tied to the land?

  • VG Zaytsev||

    Progressives call it social justice.

  • Bobarian||

    I read 'imitates' as 'inmates', but Chucky should be in NY or Federal Prison, amirite?

  • Ron||

    They actually did try that a few years ago when so many Californian were retiring to Nevada the state tried to collect their retirement as income even though they were in another state.some how that failed thankfully

  • VG Zaytsev||

    Thank God for adults like Jerry Brown in Sacramento.

    He's the only thing stopping you libertarian monsters from enabling kkkorporshuns in selling poisoned food to innocent minorities and firing everyone in the state to swell their profits.

  • ||

    No, you misunderstand. We don't want to poison minorities. If we did that, who would do our dry cleaning or take care of our gardening? You come up with a robot that can do those things, and then we'll start getting serious about poisoning minorities.

  • Aresen||

    Poison minorities? Why do that? If we did, we could use them to make Soylent Green.

  • Sevo||

    Oh, and "Moonbeam" remains appropriate. It properly ties him to the worn-out ideas of the '70s left.

  • Bobarian||

    I read the line 'by cutting a few pennies from, say, the Commission on the Status of Women' as
    'by cutting a few penises from...'

    and I thought, well what are penises doing there anyway? I mean, what's up with that?

  • Aresen||

    Just like Schwarzenegger and Gray Davis before him, Brown didn’t have the courage or political skill to bring state spending in line with revenues, so he relied on overly aggressive economic forecasts to paper over the enduring mess.

    Not to defend any of the three, but no-one who pointed out that California had to seriously cut spending would have a chance of being elected.

    IOW: "The fault my Californians, lies not in the stars, but in yourselves." (Apologies to Will)

  • DarrenM||

    Not to defend any of the three, but no-one who pointed out that California had to seriously cut spending would have a chance of being elected.

    Unfortunately, too many Californians are perfectly OK with sacrificing the welfare of future generations (who can't vote) for their own current benefit. Of course, they find plenty of ways to rationalize it.

  • C. S. P. Schofield||

    "As it will be in the future, it was at the birth of Man
    There are only four things certain since Social Progress began.
    That the Dog returns to his Vomit and the Sow returns to her Mire,
    And the burnt Fool's bandaged finger goes wabbling back to the Fire;

    And that after this is accomplished, and the brave new world begins
    When all men are paid for existing and no man must pay for his sins,
    As surely as Water will wet us, as surely as Fire will burn,
    The Gods of the Copybook Headings with terror and slaughter return!"

    Rudyald Kipling; THE GODS OF THE COPYBOOK HEADINGS

    http://www.kipling.org.uk/poems_copybook.htm

  • Registration At Last!||

    An article about California's budget crisis that mentions the "Commission on the Status of Women" and "foie gras" but contains not a single word on the bloated and savage state prison system that is sucking the coffers dry?

    This is dog-whistling, not analysis. The author is deeply unserious. The initiative process is the root cause of the California budget meltdown, and most certainly not its likely solution.

  • DarrenM||

    The initiative process is the root cause of the California budget meltdown, and most certainly not its likely solution.

    No, it isn't. Legislators merely need to work within restrictions they would prefer did not exist, so they throw temper tantrums (where they can't get away with outright ignoring those restrictions) instead of doing their jobs.

  • 16th amendment||

    Scott Walker needs to be governor of CA, with Kasich as lieutenant governor.

  • 16th amendment||

    Can we put repeal of SB400 on the ballot? People says it violates contract, but it does not. When SB400 was passed, I didn't hear any public employees say, no you can't give me more pension that I was promised. Rather they took it. So we can just as well repeal SB400. Maybe SB400 made sense when times were good, when the stock market was booming, and expected to return 8% a year forever. But they're not good anymore. Repeal SB400. It's too late to get onto the November ballot. But it would be a good alternative to those evil prop U and such they are concocting.

  • JoshSN||

    When Walker of Wisconsin has problems, Reason went out of their way to point to things out of his control, like cuts to Federal Medicaid(?) grants(?) to the states.

    No mention of that for a Democrat.

    And you folks tend to like Constitutions, well, California's stipulates how much they must spend on education. And that is a lot.

  • Ron||

    California's constitution can be changed yearly that how it got this way.

  • JoshSN||

    Not by Jerry Brown, it can't.

  • 16th amendment||

    Well, Brown could be doing more to fight the unions. He won't because he is a democrat. He could fight 3 strikes, but he won't because he got the prison union's endorsement (not that he needed it against Meg Whitman). He could propose amendments to the constitution to scrap all this additional spending.

    At least Walker has located the central problem -- the unions -- and is fighting it.

    We need strong leadership at the federal level to fight Medicaid fraud, over-usage of the system. I think dismantling it directly would hurt too many people, so just fight the fraud and make more free market policies so that the economy can revive and people will be richer, and then they will get off Medicaid.

  • JoshSN||

    Actually, one theme of Reason's support of Walker is that he's actually pro-union, more pro-union than FDR, they declared.

    You are right, there are some issues Brown isn't touching that could help.

    I'd argue that progressive taxation would help, too, and is easier to coordinate. I actually believe that greater income equality is good for productivity. I know, to you it is like I just said that black = white, but, from my perspective, you keep saying white = black.

  • 16th amendment||

    I think the point of the Walker versus FDR comparison is to highlight that we've come so far to the left that being rightwing on union issues means you are too the left of the the greatest democrat president of all time, namely FDR.

    I pay too much CA taxes already. I wouldn't mind this progressive tax idea of yours if instead of paying 9.3% on income over 45k, you pay 9.3% in income over $1M, 7% on income over 750k, etc. That would be more progressive in that very high incomes would have the highest tax rates, and if you make only 40k you would face a 2% top rate. Now I'm guessing you don' like this proposal :).

    Another way to bring about income equality is to slash public wages (including benefits, pension) so that are in line with private sector wages. Public school teachers make 30% more than private school teachers. Replace pensions with 401(k)'s. That brings about equality, and will help productivity.

  • VG Zaytsev||

    Fuck public employees!

    Replace their pensions with social security and the can supplement that with individual IRA contributions like the rest of us.

    If they don't like it then they should go get a real fucking job.

  • JoshSN||

    I am in no position to talk about the feasibility of any particular program of California tax brackets. Only a few groups have spent the necessary time, and have the necessary equations, to even make a reasonable estimate of the effects of a change in rates, assuming all other things stay equal.

    That said, maybe your idea does work, if we add 11.3% at 10M, 13.3% at 100M, and 15.3% at 1B.

  • ||

    Protip: CA and the United States Federal Government both already levy a progressive income tax.

  • ||

    Are you actually suggesting that California's budget deficit rose by 6.5 billion dollars in 4 months due to Medicaid cuts?

    It's also worth pointing out that Reason's "defense" of Walker vis-a-vis the impact of Medicaid cuts on his state's budget was to point out that, despite the histrionics about "draconian" cuts, he hadn't actually cut anything, and that his historic expansion in Medicaid spending was partially a result of the state picking up where the feds left off.

  • JoshSN||

    I am not saying the budget shortfall is because of Medicaid cuts. I'm saying that when Walker's budget and economy looked bad, Reason went out of its way to find excuses, when another Governor, one they don't like, is in a similar predicament, all that evaporates.

    It's called even-handedness, and it is lacking.

  • sweeterjan||

    But Brown is open to only one idea—new http://www.vendreshox.com/nike-shox-tl3-c-13.html taxes. He’s using threats of draconian cuts to coerce the public into giving the state government and the unions that dominate it even

  • DarrenM||

    ... betrayed the promises he made to Californians.

    Promises expire upon election. It's depressing to think how many people don't understand this.

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