Your eyes on California Government

Commentary

DEC. 5, 2011

By STEVEN GREENHUT

Gov. Jerry Brown today released “An Open Letter To The People of California.” What follows is the letter and my interpretation for those who want to read between the lines:

Brown: When I became governor again—28 years after my last term ended in 1983—California was facing a $26.6 billion budget deficit. It was the result of years of failing to match spending with tax revenues as budget gimmicks instead of honest budgeting became the norm.

Interpretation:  For a long time, California legislators have spent far more than they take in. My party, the Democrats, loves nothing more than spending money. No matter how much money taxpayers send us, we will spend it and more! But I came to power pledging to fix things and I was stuck with a huge deficit that was bequeathed to me, but I never had any intention to challenge the status quo. I find it easier to beg you all for more money than to tackle the state’s fundamental problems.

Brown: In January, I proposed a budget that combined deep cuts with a temporary extension of some existing taxes. It was a balanced approach that would have finally closed our budget gap.

Interpretation: In January, I proposed the same kind of kick-the-can-down-the-road budget promoted by my predecessors.

Brown: I asked the legislature to enact this plan and to allow you, the people of California, to vote on it. I believed that you had the right to weigh in on this important choice: should we decently fund our schools or lower our taxes? I don’t know how you would have voted, but we will never know. The Republicans refused to provide the four votes needed to put this measure on the ballot. Forced to act alone, Democrats went ahead and enacted massive cuts and the first honest, on-time budget in a decade. But without the tax extensions, it was simply not possible to eliminate the state’s structural deficit.

Interpretation: My only “solution” was to raise taxes on average Californians. I believe in the fundamental right to vote on higher taxes but I steadfastly opposed that same fundamental right when Republicans wanted Californians to vote on pension reform and other reform matters. My fellow Democrats liked that tax-hike solution, but those darned Republicans refused to go along with the tax-raising plan. They knew that we would throw them under the bus the moment we got the necessary votes.

Brown: The good news is that our financial condition is much better than a year ago. We cut the ongoing budget deficit by more than half, reduced the state’s workforce by about 5,500 positions and cut unnecessary expenses like cell phones and state cars. We actually cut state expenses by over $10 billion. Spending is now at levels not seen since the seventies. Our state’s credit rating has moved from “negative” to “stable,” laying the foundation for job creation and a stronger economic recovery. Unfortunately, the deep cuts we made came at a huge cost. Schools have been hurt and state funding for our universities has been reduced by 25%. Support for the elderly and the disabled has fallen to where it was in 1983. Our courts suffered debilitating reductions.

Interpretation: We didn’t really cut much. Things like cell phone cuts were window-dressing to give you the impression that we cut deeply into government. In fact, my main goal as governor has been to protect the public-sector unions from serious cuts and accountability. Our financial situation is more perilous than ever as the Greece analogies become more pronounced. That’s why I am here today to ask you, or actually “guilt” you into turning over more of your hard-earned cash to the state government, which will allow us to avoid painful cuts to state employees and to those many state retirees living large on $100,000-plus pensions. We only talk about cuts in services to the kids and the poor to make you feel guilty and give us more money.

Brown: The stark truth is that without new tax revenues, we will have no other choice but to make deeper and more damaging cuts to schools, universities, public safety and our courts.

Interpretation: Actually, we could reform state government by embracing educational choice, outsourcing, pension reform and other measures, but we don’t want to do that. Remember, the unions elected me and I am serving them as faithfully as possible.

Brown: That is why I am filing today an initiative with the Attorney General’s office that would generate nearly $7 billion in dedicated funding to protect education and public safety. I am going directly to the voters because I don’t want to get bogged down in partisan gridlock as happened this year. The stakes are too high.

Interpretation: This is my only solution — asking you to raise your own taxes so that you can’t blame me or my fellow Democrats for the tax increase.

Brown: My proposal is straightforward and fair. It proposes a temporary tax increase on the wealthy, a modest and temporary increase in the sales tax, and guarantees that the new revenues be spent only on education. Here are the details:

• Millionaires and high-income earners will pay up to 2% higher income taxes for five years. No family making less than $500,000 a year will see their income taxes rise. In fact, fewer than 2% of California taxpayers will be affected by this increase.
• There will be a temporary ½ cent increase in the sales tax. Even with this temporary increase, sales taxes will still be lower than what they were less than six months ago.
• This initiative dedicates funding only to education and public safety—not on other programs that we simply cannot afford.

This initiative will not solve all of our fiscal problems. But it will stop further cuts to education and public safety.

I ask you to join with me to get our state back on track.

Interpretation: These tax increases will be gone in an instant and I will soon be back asking for more money. The public safety money means protecting huge pay and benefit packages for union workers, not for actually improving the public’s safety. The public schools are substandard, but the teachers unions won’t let us get rid of bad teachers or improve them with market-based reform. Our only way out is to throw more good money after bad. We will be taxing millionaires more, and more of them will join the exodus out of the state. Of course, when I say millionaires, I don’t mean those many public employees who are retiring on the kind of pensions that only a millionaire could afford.

I ask you to join with me to keep our state from having to make reforms that would cause any inconvenience to public employees. We need to get the state back on track — of spending without concern for the future.