The New Republic Credits Progressives with Solving California’s Budget Crisis

The New Republic, a publication with a slant to the left, has a story in the current issue that gives full credit to progressives and Governor Jerry Brown for saving California from Republicans who can ony vote “no” on anything.  The article reminds us that the State was facing budget deficits well into the billions and now shows a modest budget surplus for the current year.

From the story:

The initial projection for the state budget showed a balance. In fact, for the 2013-2014 fiscal year, there’s a surplus of $851 million. The nonpartisan Legislative Analyst’s Office, which just a couple months earlier estimated a deficit of $1.9 billion, concurred with the governor: Revenues matched expenditures in the initial outlook for the first time since before the Great Recession.

This was a surprise, to say the least. After all, in 2009, California carried a deficit as high as $42 billion. Marathon all-nighters in the legislature and unsatisfying 11th hour deals were commonplace. At one point the state paid obligations with IOUs because it ran out of money. How could this bastion of dysfunctional governance deliver a balanced budget?

Actually the answer is quite simple. Progressive Democratic activists identified the straitjacket of rules that had the state tied up in knots, and devised a systematic plan to change them. Through massive organizing, they transformed the electorate and sidelined Republican obstructionists. Now, with surplus money on hand, they’re getting ready to fight a new battle over the next few years: whether to focus on budget balancing and debt reduction, or to continue to boldly invest in California’s future. National Democrats, mired in a series of endless fiscal showdowns in Washington, ought to pay attention: California suggests a way to overcome continual hostage-taking and government-by-crisis.

California’s recent budget problems resulted from the deepest economic downturn since the Great Depression. But the state’s difficulty in addressing them was as much a political crisis as a budget crisis. Since the passage of the notorious anti-tax Prop 13 in 1978, which capped property tax rates and made it nearly impossible to raise revenue through the legislature, California has been locked into a revenue structure that, outside of boom times, proves too small to finance the public services that residents desire. Several tax cuts during the late 1990s dot-com boom, and a huge $5.5 billion annual cut to the vehicle license fee passed by Arnold Schwarzenegger in 2003, only exacerbated this imbalance.

The state also had to contend with multiple veto points that allowed the minority party to control the fiscal debate. Until 2010, the legislature needed a two-thirds vote to both pass a budget and raise taxes, leading to several incidents of brinksmanship with Republicans, who gerrymandered the state just enough (in a corrupt bargain with the majority Democrats) to hold on to a bit over one-third of the legislative seats. Robbed of the tools of budget-balancing, majority Democrats had to make painful concessions in order to get Republicans to pass a budget.

With the new supermajority of Democrats in the state assembly and in the state senate, predictions by Republicans that tax increases were imminent have gone unfounded.   If anything, they seem leary of the idea of passing lower thresholds for local cities and towns to pass local tax increases to better fund schools or pay for public safety. Republicans in the Assembly and Senate had every chance to work with Democrats on compromise measures and instead made it difficult to accomplish much.  To get anything accomplished, Republicans in the state assembly and senate are going to have to compromise in order to pass any meaningful legislation.

A recent editorial in the OC Register suggested Democrats are the party that doesn’t care about fiscal responsibility.  And while the editorial was talking about Congressional Democrats, it’s out experience this is the view the Register’s Opinion desk holds of Democrats in general.  Of course, that’s a long held axiom that isn’t true (and again, with a progressive voice on the Register’s editorial board, it’s practically Gospel there).  From the same TNR story:

But while progressives put the coalition in place to move past austerity politics, Governor Brown largely kept in place the austerity budgets of previous years. The exception is education, where in many respects the state’s hand is forced: because of a formula set years earlier by Proposition 98, education spending must rise proportionally with increases in the overall budget. But much of the rest of the budget remains flat, particularly for social programs like welfare-to-work, healthcare for the poor and elderly, and child care, where the state has cut $1 billion over the past four years, enough to accommodate 110,000 families. At one point during the darkest days, legislative Democrats, quick to prove wrong taunts about overspending, unfurled a 150 foot-long scroll listing $19 billion in cuts they adopted from 2003 to 2008. Most of that scroll has not been rolled back.

Governor Brown has no interest in restoring the cuts, at least not in the next budget year. In his budget announcement, Brown said that “we have to live within the means we have,” and he sees much of the fiscal retrenchment as permanent. He is focused on aggressively paying down what he calls a “wall of debt” by $23 billion of over the next four years, and critics have questioned the necessity of that timetable while needs for vulnerable populations go unmet. “If the budget plays out as continued cuts,” said Courage Campaign’s Jacobs, “then people will say, great, you paid down debt, but what about in-home support services for my family members? What about the axle on my car still breaking on our broken highways?” 

So by all means, give The New Republic piece a read

  3 comments for “The New Republic Credits Progressives with Solving California’s Budget Crisis

  1. Ltpar
    January 30, 2013 at 4:20 pm

    Ho hum, what’s new here? Big spending Democrats always think the answer to their budget woes are more taxes and not runaway spending. Let’s see just how many of those new tax dollars make it to the schools as promised and how many go into the lard bucket? Given the track record in Sacramento, in a year or two, they will be right back at the default line whining for more tax dollars or the sky will fall. As long as gullible voters keep putting these guys back in office, it will be more of the same, so keep your wallets open.

  2. junior
    January 31, 2013 at 12:41 pm

    Insert crazy insane laughter here:

  3. January 31, 2013 at 3:54 pm

    Brown’s & TNR’s Creative Accounting

    January 14, 2013: State budget “roughly in balance” with the following assumptions:

    Revenue: $1 billion from eliminating redevelopment agencies & new clean energy revenues (assuming Congress does not end subsidies to balance its budget),
    Savings: Repay $500 million less back to state special funds.
    Taxes: $700 million from managed health care plans & hospitals (Don’t get sick or have an accident)

    Disregard Prop. 39 & 98: Half of the funds from Prop 39 are suppose to fund “clean” energy programs. The governor proposed spending the Prop 39 money on green projects in schools AND said this would count towards meeting Prop.98’s minimum funding rules for education. (Funds for solar panels are Prop. 98 equivalents for teachers).

    Note: The long term debt for teachers’ retirement and state retirees’ health care were not displayed on the annual state balance sheet.

    “State fiscal analyst says California budget ‘roughly in balance'”

    Read more here:

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