Is California budget as ‘balanced and progressive’ as Gov. Brown suggests?

SACRAMENTO – The California Assembly and Senate have until Thursday to approve the budget deal announced by Gov. Jerry Brown last week, but there’s little uncertainty about the outcome. The general-fund budget is a record-setting $125 billion – something Brown describes as “balanced and progressive,” given that it spends more on social programs, but doesn’t bust the bank.

In fact, the budget plan conforms almost exactly to the governor’s longtime fiscal approach. He wants to fund social programs as much as possible, but not create new, permanent spending programs that cannot be curtailed when fiscal times are bad. He talks repeatedly about frugality, yet his budgets continue to ramp up state spending to record levels. He did set aside $8.5 billion for the rainy-day fund to prepare for any downturn.

Even the governor’s approach to the state’s unfunded pension liabilities is prototypical Brown. The governor speaks regularly about the size of the state debt to pay for pensions and retiree medical programs, but he typically addresses the problem with small-scale solutions that trim debt levels without antagonizing state workers and the unions that represent them.

This particular deal would borrow money from a state fund that pays a low interest rate, and pay down some of the state’s pension debt by investing it with the California Public Employees’ Retirement System, which predicts a fairly high rate of return (7 percent). Brown says this plan will save the state $11 billion over the next two decades simply because of the difference in interest rates. 

In terms of spending, the budget uses $1.2 billion in new revenues from the state’s recently passed tax increase on tobacco to help pay for growing costs to Medi-Cal, the state health program for low-income residents. But about half of those new revenues will be earmarked to health care providers and to family-planning entities like Planned Parenthood. It expands spending on the state’s K-14 educational system.

The budget also expands spending for both of the state’s university systems (the University of California and California State University), but the nearly $300 million combined in increased higher education spending comes with some conditions. The plan withholds $50 million from the University of California until the Office of the President fulfills the recommendations made earlier this year by a state auditor. It also requires California State University officials to “find space for students denied entry to their preferred campus or program,” according to the Sacramento Bee.

The budget increases spending on subsidized affordable-housing programs by $400 million. The budget also will allow more people to take advantage of the state-level Earned Income Tax Credit. Under new criteria, low-income people earning up to $22,000 a year will qualify for state EITC payments, up nearly $8,000 from previous standards. The new eligibility standards also apply to people who work for ridesharing companies or are involved in other forms of self-employment, according to various news sources. The budget doesn’t include an extension of the cap-and-trade system, although the system is likely to be extended in separate legislation.

Furthermore, the budget spends $100 million to set up a new agency to deal with the legalization of recreational marijuana sales, including the creation of a tax office along the Redwood Coast in the heart of marijuana-growing country.

The whole budget, which includes all spending (from bonds, etc.) totals $183.2 billion. But the biggest controversies are not around the amount of money the state will spend. The Legislature used the trailer-bill process – normally reserved for technical amendments to budget matters – to pass some controversial, nonbudget-related matters.

For instance, Democrats are fighting a recall measure against state Sen. Josh Newman of Fullerton. Republicans targeted him because of his vote on the recently passed gas-tax increase. One trailer bill in the budget would extend the timelines for the recall, making it more likely that the election would be put on a regularly scheduled ballot timeframe that would be more favorable to the Democratic incumbent. Another trailer bill would reduce the power of elected officials in the state Board of Equalization, a tax board. Yet another creates new dam-safety rules, following problems at the Oroville Dam spillway last winter.

Still, what Democrats described as responsible drew some rebuke from Republicans, who note that general-fund spending is nearly $40 billion higher in this budget than it was six years ago. Balanced and progressive or out of control? It depends on which side of the aisle one sits on. But everyone at least agrees that it’s basically in balance.

 Steven Greenhut is Western region director for the R Street Institute. Write to him at [email protected]

27 comments

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  1. Spurwing Plover
    Spurwing Plover 21 June, 2017, 12:51

    Here is Moonbeam showing us his IQ test his falling intellegence and his low IQ

    Reply this comment
  2. Joe
    Joe 21 June, 2017, 19:38

    … including the creation of a tax office…

    What else would you expect from these Demorats?

    Reply this comment
  3. eck
    eck 21 June, 2017, 20:19

    Business as usual in the PRC (people’s republic of CA). Or, the Banana republic of CA.
    Private (you and I) people would be prosecuted for fraud (at least) if we tried this stuff. Shame. Shame. on CA legislators and anyone who voted for these criminals!

    Reply this comment
  4. Dude
    Dude 21 June, 2017, 21:15

    The word “frugality” could never be used in the same sentence with “Governor Brown-streak”

    Reply this comment
  5. Ulysses Uhaul
    Ulysses Uhaul 22 June, 2017, 00:01

    The weather is great and it is for the kids.

    Get over it. Or move.

    Reply this comment
    • No Longer Californian
      No Longer Californian 22 June, 2017, 10:43

      Didn’t “get over it”; we moved, and took our tax abilities with us. You’ll have to make up that difference now.

      Reply this comment
      • ricky65
        ricky65 23 June, 2017, 08:48

        Oh great. Fewer pockets to pick by the kleptocrats in Excremento means each of us remaining tax pinatas has to pay more to support the welfare state.
        And fewer customers means Uly will have to raise rental rates on his unsafe trailers. He already cut Queeg’s hours and took away his computer.
        Hard times out there in Hemet for the rental yard. Fortunately the water storage tank is full and the heat is keeping the sidewinders in the deep shade.

        Reply this comment
        • Ulysses Uhaul
          Ulysses Uhaul 23 June, 2017, 16:56

          Rickettes

          Uly is doing well.

          Queeg on his annual trip fishing in Pantagonia with his Bolivian and Cuban chums….he found a computer and emailed he is agigitated by some seminar grey haired dude from The Deep State who is keynoter at the lodge speaking on cutting taxes for chubby doomers…..

          Our trailers are what they are…..loosing a few doomers on West Virginia roads unfortunate.

          We haven’t raised rates in five years and run many many imported packing supply specials…..Queeg pushes Red duct tape and Red tailight bulbs from Chinese trading companies….

          We love you doomers……Ywaaaaaa!

          Reply this comment
      • Patton'sGhost
        Patton'sGhost 23 June, 2017, 08:57

        Same here…
        Now gone a month…
        We got out just before the United Van Lines franchise in our area went on lockdown due to the high volume of outmigrations to other states during June…
        When we took our old paint to the disposal facility in Thousand Oaks, the guy there said we were the fourth person that day that were leaving California, and we were there at 11am…
        Moonbeam said “The smart ones will figure it out” and we have…we left the Conejo Valley that we loved for Douglas County CO…so far, we love it here too and it actually RAINS here…
        What a feeling of relief it is to read this article and see the shenanigans that they’re playing:
        $8.5 billion for rainy day funds???
        Robbing Peter to pay Paul with that 7% earning plan??? Where in Heaven’s name are they gonna get a safe 7% ROI in this market???
        Good thing weed is legal, because those of you left in this formerly Golden State will NEED legal weed to numb the pain you’re gonna feel from the economic headwinds that this old fool & his merry band of Hispanderers are foisting upon anyone fortunate enough to still have a job in Mexifornia….
        Beautiful place to visit, but to live & be affected by these idiots? (De Leon, Lara, Rendon, Gonzalez Fletcher, Lieu, et Al)
        No way…

        Reply this comment
        • eck
          eck 25 June, 2017, 18:57

          “Frying pan – fire” anecdote comes to mind Patton. CO is becoming deep blue quite rapidly. Lottsa luck.

          Reply this comment
    • Liz
      Liz 22 June, 2017, 10:59

      The people who pay for all of this are moving out of state to find the good jobs that were driven out by over-regulation of employers and excessive taxation. The so-called progressive agenda is not sustainable. All of this is done for the Dem legislative leaders, not for the kids.

      Reply this comment
  6. Truthafuss
    Truthafuss 22 June, 2017, 10:27

    Brown, a professional public trough drinker, has almost brought California to its knees. He has set the state on a course of self-destruction. He disgraces his family history in the state and should have beeen impeached. But check the surnames of the losers in the legislature, you will see who he has sold us out to. A third world group of morons if ever there was one.

    Reply this comment
    • Patton'sGhost
      Patton'sGhost 23 June, 2017, 09:03

      ^^^ TRUTH!!!
      Moonbeam was an idiot when I was in high school and he’s an even bigger, older idiot in my middle aged years…
      The Hispanderers control the state and we’ve been taken over without firing a shot…
      Viva La Reconquista…

      Reply this comment
  7. Dude
    Dude 22 June, 2017, 19:50

    The tooth fairy told that lie to Kyong Dah, but nobody thought he’d be stupid enough the repeat it.

    Reply this comment
    • ricky65
      ricky65 23 June, 2017, 08:56

      Ok, so I didn’t much about coral bleaching before KyongDah’s post but I do not understand the criticism of it.
      It’s good news because it appears another dire prophecy of the doomsday cult warmists is apparently going down like so many other of their disgusting lies.
      Good reporting, KyongDah!

      Reply this comment
  8. Dude
    Dude 23 June, 2017, 14:06

    Too bad Colorado doesn’t have surf. I’d be there in a heartbeat. I would have to meet personally with Gov. Phallic Head before I left. I so want to flip him off in person. Signed…. Deplorable Freeloader

    Reply this comment
  9. Ulysses Uhaul
    Ulysses Uhaul 24 June, 2017, 11:09

    Such sour and ugly posts fom carpetbaggers who couldn’t cut it in sunny Kali…..so hurtful too….they didn’t use us and get the free map to top Redneck Utopias on scenic ” Deliverance ” roads loaded with militia gun ranges and road kill skinning stations.

    By theway….good jobs in Colorado are cleaning rich guys’ vacation rentals and packin subs at Blimpe’s.

    Reply this comment
    • afrequentreader
      afrequentreader 24 June, 2017, 16:24

      Such hypocritical language from a “smart” guy working at a moving company. Real intelligence required there? Just asking. Once all the smart people have left Cali aka the higher earners, what will your business be? Carting around freeloaders from one street corner to the next?

      Good luck Bernie boy.

      Reply this comment
      • Ulysses Uhaul
        Ulysses Uhaul 24 June, 2017, 21:11

        Uly will be fine….we have acerage for salvage yards, selling scrap, metal, car parts…..

        Reply this comment
      • ricky65
        ricky65 27 June, 2017, 20:19

        I think Uly has seen his future in the golden state and it is a bit tarnished.
        When all the tax paying “freeloaders” (as Brownie calls them) eventually leave,Uly, and his man slave Queeg, will face serious issues.
        Their only remaining customers will be the truly freeloading grifters who like rats leaving a sinking ship,will begin to depart to other states and welfare havens the liberals have not yet bankrupted.
        Naturally, they will declare having free use of a Uly trailer to be a basic human and constitutional right. The future business model does not look good for Uly & Co.

        Reply this comment
        • Ulysses Uhaul
          Ulysses Uhaul 27 June, 2017, 23:30

          Uly is a bonafide resourseful survivor….are you aware what used car parts go for in third world hell holes?

          Also, Queeg does work on the cheap, Armenian visa overstay, and he can weld any beat up trailer out there…..

          Reply this comment
  10. Dude
    Dude 17 July, 2017, 14:22

    The “Just say no” approach sounds like a fitting response to Gov. Brownstreak.

    Reply this comment

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Steven Greenhut

Steven Greenhut

Steven Greenhut is CalWatchdog’s contributing editor. Greenhut was deputy editor and columnist for The Orange County Register for 11 years. He is author of the new book, “Plunder! How Public Employee Unions are Raiding Treasuries, Controlling Our Lives and Bankrupting the Nation.”

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