Gov.’s Groundhog Day In California

JAN. 7, 2011

It felt like “Groundhog Day” on Thursday during Gov. Jerry Brown’s budget proposal press conference. I had a flashback to January 2011. Listening to him make the same claims about the budget that he made all year proved that Brown has only one trick in his bag.

After attending all of Brown’s press conferences since he was elected, I have come to the conclusion that he is inept. He’s a tool. He’s a front man — the public face for those really controlling state government. He’s bought and paid for. And his staff is inept. The Department of Finance is inept. They’re all inept.

Or they are all corrupt.

Either way, these people should all be fired. They are highly paid impostors, pretending at playing “budget.” I’ve seen more sincere budgeting from circus carnies and grifters who have to live within their “budgets.”

One year of  watching Brown say the same things, and use the same expressions he has used at every news conference since his election, struck me the most, and angered me greatly.

The Old Familiar Budget Proposal

Brown said that his fiscal 2012-13 budget proposal is “straightforward and fair.”

We’ve heard that before.

So I started digging back into stories I wrote in 2011 while covering the governor.

On January 31, 2011, I wrote, “Earlier in the month, Brown proposed an ambitious budget plan to eliminate the state’s deficit and budget shortfall using spending cuts, borrowing, tax increases, and somehow locating $1.9 billion in ‘other unspecified solutions,’ in order to provide for a $1 billion reserve. The 2009 tax increases are estimated to net $12 billion, and they include a 1 cent increase in the state’s sales tax, a 0.25 percentage point increase in the state income tax and an increase in the vehicle license fee rate.”

It’s déjà vu all over again.

And on that date last year I wrote, “According to Brown’s budget proposal, in addition to the substantial cuts to Medi-Cal, CalWORKs, and the state’s universities, state employees pay will be cut by 10 percent — but only state employees not currently covered under collective bargaining agreements.”

Brown said on Thursday that he would be cutting the state workforce again, this time by 15,000. But when pressed, state Finance Director Ana Matosantos said that 15,000 have already been eliminated. Matosantos said that it was actually another 3,000 that would be cut, mostly Department of Corrections employees. But then she said that they weren’t actually going to be eliminated, but instead shifted to other jails and prisons.

In state government, cuts are not really cuts. Numbers are just moved to other columns. Employees are just given a different job, moved elsewhere or buried in another obscure department.

Believe What They Do — Not What They Say

Last year, Brown said that his realignment plan would return decisions and authority to cities, counties and schools, and would “allow government at all levels to focus on core functions, and become more efficient and less expensive” through reductions in duplicative services and administrative costs.

Is California government more efficient, less expensive and rid of duplicative services yet?

No. The state budget is actually increasing by $6 billion, Brown is creating a new state agency and increasing spending on nowhere projects.

In January 2011 I wrote, “During his inauguration earlier this month, Brown warned that “the year ahead will demand courage and sacrifice.”

He said that again on Thursday.

Last year, Brown spoke of the need for “tough choices” in the budget and pushed hard for a public vote on controversial tax extensions.

He used that one again on Thursday.

Last year, CalWatchdog’s editor-in-chief, Steven Greenhut, wrote about Brown’s proposed tax increases in Full Court Tax Hike Press, “He became even more direct and even shameless on Monday, as he compared this issue to what’s going in the Middle East: ‘When democratic ideals and calls for the right to vote are stirring the imagination of young people in Egypt and Tunisia and other parts of the world, we in California can’t say now is the time to block a vote of the people from this process,’ he said in the Assembly chambers, in a prime-time speech.”

Brown made a nearly identical reference on Thursday, again comparing the California economy to troubled countries in Europe and Egypt.

But the broken record Brown has played all year is that he continues to offer voters the false choice of higher taxes or service cuts, while avoiding real, sincere, cost-saving budget reforms.

How To Save California’s Economy

It is evident by now that Brown is not a believer in free market principles, but he should be. The Department of Finance gurus should be as well.

CalWatchdog Managing Editor John Seiler wrote last year about a December 2010 Wall Street Journal article which Seiler said, “highlighted a study by three economists who found that, over the past 37 years, nations around the globe reduced debt burdens only when spending cuts were on average 85 percent of a budget solution, with tax cuts only 15 percent.” Andrew Biggs, Kevin Hassett and Matt Jensen wrote:

“On average, the typical unsuccessful consolidation consisted of 53% tax increases and 47 percent spending cuts.

“By contrast, the typical successful fiscal consolidation consisted, on average, of 85 percent spending cuts. While tax increases play little role in successful efforts to balance budgets, there are some cases where governments reduced spending by more than was needed to lower the budget deficit, and then went on to cut taxes. Finland’s consolidation in the late 1990s consisted of 108 percent spending cuts, accompanied by modest tax cuts.”

“This is important because California’s tax increases should amount to no more than about $4 billion, with spending cuts at $22 billion,” Seiler wrote.

Their findings were practically a roadmap for California. The three economists wrote:

“Consistent with other studies, we found that successful consolidations focused on reducing social transfers, which in the American context means entitlements, and also on cuts to the size and pay of the government work force.

“A 1996 International Monetary Fund study concluded that ‘fiscal consolidation that concentrates on the expenditure side, and especially on transfers and government wages, is more likely to succeed in reducing the public debt ratio than tax-based consolidation.’ For example, in the U.K’s 1997 consolidation, cuts to transfers made up 32 percent of expenditure cuts, and cuts to government wages made up 21 percent.

Blah Blah Blah

In his 2011 inauguration speech, Brown said, “Choices have to be made and difficult decisions taken. At this stage in my life, I have not come here to embrace delay or denial.”

And last year Brown said, “The budget I present next week will be painful but it will be an honest budget.” Brown promised to spend only what is available in tax revenues while restructuring government services between state and local agencies. “The plan represents my best understanding of our real dilemmas and possibilities. It is a tough budget for tough times.”

In Brown’s recent “An Open Letter to the People of California,” he wrote:

“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. … This initiative dedicates funding only to education and public safety — not on other programs that we simply cannot afford. … I ask you to join with me to get our state back on track.”

Greenhut had his own interpretation of Brown’s rhetoric:

“These increases will be gone in an instant, and I will be back asking for more money. The public safety money means protecting huge compensation packages for union workers, not for actually improving the public’s safety. The schools are substandard, but the teachers’ unions won’t let us get rid of bad teachers or improve schools with market-based reform. We will be taxing the rich more (watch how broadly we define that term!), 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.”

Brown’s been great on the abolition of redevelopment agencies. But it is becoming increasingly clear that he is not making other necessary reforms, largely due to the labor unions in California who currently control the purse strings.

Like in the movie “Groundhog Day,” Californians wake up to find nothing has changed. Meet the New Brown, same as the Old Brown.

–Katy Grimes