Government Spending

Jerry Brown's Skinflint Budget Proposal for California Raises Spending, Diverts Taxes


California Gov. Jerry Brown has gotten mad props for proposing a balanced budget for the Golden State's next fiscal year (which starts in July). This is a budget that Brown is touting for its toughness but in fact would raise spending by 5 percent from last year. California figures to spend $93 billion in the fiscal year ending in July. After voters approved tax hikes in November, Brown is calling for spending $97.7 billion over 2012-2013.

Adrian Moore, vice president of policy at Reason Foundation, the L.A.-based nonprofit that publishes this website, is not impressed. He writes in the Orange County Register:

Gov. Brown stumped vigorously for the Proposition 30 tax hikes, saying, "You vote for Prop. 30, you know you're getting six to eight billion dollars pumped into California schools." Yet his proposed budget spends just $2.7 billion out of the $6 billion tax hike on schools. The rest goes to state workers' pay. Gov. Brown compounds this sleight of hand by then proposing to spend Prop. 39's $1 billion in new taxes raised on schools, even though the law clearly says that money has to go to "green energy" projects.

Gov. Brown's budget is not balanced and will not reduce the debt. It doesn't even use the new tax money voters just approved as they were promised. In May, voters will likely be told that "unforeseen" circumstances have caused another round of budget woes.

Read the whole thing.

And while you're checking out the OCR website, read this piece about California's interest in raising the state's minimum wage by another Reason Foundation policy analyst, Adam Summers. At $8 an hour, the state's minimum wage is already higher than the federal one (which is $7.25) and California has a 9.8 unemployment rate, two full percentage points over the national average.

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  1. In May, voters will likely be told that “unforeseen” circumstances have caused another round of budget woes.

    You cannot plan for the actions of hoarders and wreckers.

    And question, how long before California’s beloved professional sports teams start to cease to be competitive because of the tax rates? Especially in a league like the NBA or the NHL where the careers are wrong and the differences in tax rates between California and Texas or Florida represent millions of dollars, that is going to start affecting decision making of stars. They are talking about the Lakers making a play for LaBron James. Why the hell would James leave Florida where there is no income tax for the tax hell of California?

    1. Especially in a league like the NBA or the NHL where the careers are wrong

      So true.

      I’d award an RC’z Law, but you kind of retired the trophy. 😉

      1. It gives those have nothing to say, something to comment on.

  2. It makes intuitive sense that higher minimum wage would result in higher true unemployment, but are there any extensive studies out there that back this up? It seems like it would be a hard question to answer given that so many things can impact unemployment figures.

    Also, any good studies that break the impact down by age group, race, etc.?


      Entire books on the subject. And the answer is “it depends”. It depends on how high the wage is and how high the natural wages are in the area.

      1. To summarize: Where minimum wage laws don’t really make a difference because market wages are already that high, they do no harm.

        Where minimum wage laws exceed the market wage, they suppress employment.

        1. Yes and no. It is always going to fuck people whose productivity is below the minimum wage.

      2. Thanks for the link. It has been added to my queue.

    2. “Most economists believe that minimum wage laws cause unnecessary hardship for the very people they are supposed to help.” (not including Krugman)…..Wages.html

      1. I think Krugman stopped being an economist the moment he started writing for the NYT.

        Also, thanks for the link.

      2. It doesn’t matter. Economists don’t make the laws, politicians do. And they don’t care if they are causing hardship as long as they score points with the all-important low-information voter.

    3. You are right that the effects of minimum wages are a bit tricky to unpack, but it has been dones. This report from CATO has a nice section in the middle that reveiws a bunch of studies and what results on overall employment and particular employment they found: http://www.downsizinggovernmen…..-wage-laws

  3. in fact would raise spending by 5 percent from last year.


    1. When you request a ten percent raise, and only receive a five percent raise, that larger paycheck represents a cut in pay. Don’t you know anything?

    2. A lot of those teachers have things like private school tuition for their kids to pay for. You know how much that costs these days?

      1. Wait, are you sure you are not talking about Illinois?!

  4. Californians are like abused spouses. They’ll just keep coming back for more of this treatment, regardless of how much it hurts.

  5. I would like to see how this effects California’s small businesses. Where is the balance between growth and spending?

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