Has Jerry Brown’s budget deficit become a cliche?

by CalWatchdog Staff | May 15, 2012 8:45 am

[1]May 15, 2012

By Wayne Lusvardi

Has California’s legendary structural budget deficit evolved into an overworked and obsolescent cliche?

This is a question to be asked of Gov. Jerry Brown announcement yesterday that the state general fund budget deficit has ballooned to $16 billion[2] from the previously reported $9 to $10 billion.

However, the website for the independent state Legislative Analyst’s Office indicates the state ran [3]a $3.3 billion surplus in 2011 and is running a $2.5 billion surplus for 2012.  What gives?

Moreover, the LAO indicates that the cumulative net budget deficit amassed over the past 5 years is only about $3 billion. This reflects only a 3.3 percent deficit that could soon disappear if the $90 billion growth in state Gross Domestic Product for 2011[4] reported by Gov. Brown in March starts showing up in greater tax revenues.

Here’s the summarized data from the State Legislative Analyst’s Office:

California   Revenues and Expenditures 2007 to 2012 – in billions
2007-08 2008-09 2009-10 2010-11 2011-12 PercentChange
Revenues $102.522 $82.772 $87.045 $94.781 $88.456 -13.7%
Expenditures $102.986 $90.940 $87.237 $91.476 $85.937 -16.5%
Surplus +$3.305 +$2.519
Deficit -$0.464 -$8.168 -$0.192
Surplus   minus Deficit -$3.0
Percent   Surplus or Deficit -0.4% -9.8% -0.2% +3.5% +2.8% -2.8%
Source:  California   Legislative Analyst’s Office http://www.lao.ca.gov/laoapp/LAOMenus/lao_menu_economics.aspx[5]

Is Brown, like the proverbial Chicken Little, crying that the sky is falling to get his tax increase proposition passed when in reality the clear sky is peeking out from the clouds?  Who knows?  And who is to be believed? Or more importantly, should we be informed only by cliches in making voting decisions about his proposed tax increases on the November 2012 ballot?

Apparently what Brown is angling for is a restoration of the $9.2 billion in taxation lost from the expiration of the temporary 1 percent sales tax surcharge on July 1, 2011[6].

But is the governor’s deficit number real?  Is it a deficit that needs to be fixed or a spending addiction that needs to be stopped cold turkey without any substitute stimulus?   Has Gov. Jerry Brown’s so-called $16 billion budget deficit become a worn-out cliche?

Cliches Avoid Facts and Arguments

Jonah Goldberg, in his new book “The Tryanny of Cliches”[7] says cliches are “ways to avoid arguments, not make them.”  Dutch sociologist Anton Zijderveld[8], in his book “On Cliches,” says that journalists, political pundits and comedians fill voids created by the absence of early knowledge of uncertain situations with cliches.  Most dictionaries define a cliche[9] as a trite and over-simplified expression that has become obsolescent.  A clue to detecting a cliche is that it often functions to arouse hate toward some outgroup.

Let’s take California’s K-12 school line item in the state operating budget, for example.  It comprises the largest part of the state operating budget — about 43 percent — as mandated by Proposition 98[10].

School districts and the newspaper media around the state have been hysterical about teacher layoff notices over the past five years.   The state K-12 budget has been cut $8 billion, or about 19 percent[11], over the past five years.  But it has mostly resulted in cutting “fluff[12]” and “earmarks”[13] out of the education budget.  Hardly a core teacher around the state was laid off.  Ending some earmarks saved California’s schools.  The state LAO even suggested that there was nearly $7.4 billion more in “categorical” program[14]s — make-work jobs — that still could be cut back beyond what already has been cut.

One Democratic legislator called for rolling “categorical” funding into a block grant[15].  Block grants would leave it up to each school district, instead of Sacramento, flexibly to decide what would be funded or cut.  But this wouldn’t allow state legislators to buy votes from unions by doling out “categorical” jobs, so it was dropped.

Parcel taxes

From 2010 to 2012, wealthy school districts around the state put a double school property tax on the ballot — called a parcel ta[16]x — to add more local tax revenues to their schools to avoid so-called budget deficits.

But there was no need to save core teacher jobs, despite claims that teachers would be laid off.   School districts without added funding from parcel taxes ended up not having to cut core teachers.  Why would those with added parcel tax revenue have to lay off teachers?

What the parcel taxes paid for was mostly ancillary make-work jobs programs — called “categorical positions” — and luxury services such as school busing or more school librarians.  The people who voted for parcel taxes were mostly snookered into believing there was a state budget deficit crisis that would result in core teacher layoffs.

Those school districts that voted for parcel taxes merely freed up state funding to allow poorer school districts to retain “categorical” jobs programs like school busing, dental checkups, extra librarians, physical education teachers, American Indian education centers, etc.  One man’s public school deficit is another’s luxury public school service or make work jobs program.   Budget deficits are relative to who is in power to define them as such.

Deficit or spending problem?

Once again, we must ask: Were the schools actually running budget deficits or did they have a spending problem?  Was the budget cup half full or half empty?  Or has the state and local budget deficit crisis become a cliche meant to stifle opposition?

One Man’s Budget Deficit is Another’s Spending Problem

Once it is established in the minds of a group of people, it is very difficult to dislodge a cliche even by clear empirical evidence.  It becomes a taken-for-granted truth.  As sociologist W.I. Thomas once said, “A situation that is defined as real is real in its consequences.”[17]

People do not like to be confronted with what social psychologists call “cognitive dissonance.” When later confronted by contrary evidence, one’s early emotional perceptions of a situation are bolstered by resistance.  In fact, one’s emotional perceptions become stronger, not weaker, as evidence of the true situation becomes known. As the saying goes: “I have made up my mind, don’t bother me with the facts.”

Cliches are made plausible and convincing not by the amount or quality of evidence for them but by the way they meet the social and psychological needs of a particular situation.

Who benefits?

We have to ask, “Who benefits from the ideological distortions of cliches about the state and public school budget deficits?” My guess is that unions and state legislators desiring to protect political earmarks and political pork that buy votes are the main beneficiaries of the state budget deficit cliche.

Sometimes even conservative writers consume the same cliche by claiming the state is going bankrupt due to huge budget deficits.  But it is mainly cities, counties and special enterprise districts that are more prone to bankruptcy.

State Senate President Pro Tem Darrell Steinberg, D-Sacramento, recently said that funding for health and welfare programs was going to have to be cut due to continuing tax shortfalls.  Steinberg added that, unless health and welfare programs were funded, $1.5 billion in affordable housing funds[18] lefto ver from defunct redevelopment agencies would have to be tapped.  Should people’s health and welfare suffer so that luxury affordable housing programs[19] can continue?   In other words, money is available to plug the funding gap for health and welfare programs.  So is this to be construed as part of Brown’s $16 billion “budget deficit”?

If the above data from the state LAO are reliable, perhaps the cliche about the state budget deficit more accurately reflected the early reality the state wanted us to believe from 2007 to 2010.  There wasn’t much information available during that period from which to define what the state meant by a “budget deficit.”  Cliches plugged that information gap.

But are we now running deficits, or avoiding cuts to luxury goods, programs and services[20] from the state budget? If wages[21], both public and private, were allowed to adjust to their market levels instead of propping them up with stimulus programs and prolonged unemployment benefits the state’s pension liability might become more manageable and not require a tax increase.

How can California have a budget deficit crisis?  It has spent $18.7 billion on five “waterless” water bonds since 2000 that mostly went for acquiring open space without any substantial new water supplies to show for it?

How can it have a health and welfare budget deficit crisis when it is spending $3 billion on mostly redundant stem cell research that has now been found to be obsolescent science[22]?

The lesson to be learned from California’s infamous budget deficit is to beware of relying on cliches early on about ambiguous situations to be dealt with by public policies or programs.

In informing oneself on how to vote in the upcoming election on tax increase proposals, one should not rely on cliches but on facts and disinterested opinion wherever possible.

As such, the old saying to “avoid cliches like the plague” may offer the best advice in informing oneself how to vote on tax increase proposals to plug the so-called state budget “deficit” in November 2012.

  1. [Image]: http://www.calwatchdog.com/2011/11/11/the-politics-of-public-sector-unions/govbrown/
  2. $16 billion: http://www.sacbee.com/2012/05/13/4486112/brown-california-budget-deficit.html
  3. indicates the state ran : http://www.lao.ca.gov/laoapp/LAOMenus/lao_menu_economics.aspx
  4. $90 billion growth in state Gross Domestic Product for 2011: http://online.wsj.com/article/BT-CO-20120323-712233.html
  5. http://www.lao.ca.gov/laoapp/LAOMenus/lao_menu_economics.aspx: http://www.lao.ca.gov/laoapp/LAOMenus/lao_menu_economics.aspx
  6. temporary 1 percent sales tax surcharge on July 1, 2011: http://ballotpedia.org/wiki/index.php/California_State_Tax_Increase_Proposition_(2011)
  7. “The Tryanny of Cliches”: http://www.amazon.com/The-Tyranny-Cliches-Liberals-Cheat/dp/1595230866
  8. Anton Zijderveld: http://www.amazon.com/On-Cliches-Supersedure-Modernity-International/dp/071000186X/ref=sr_1_1?ie=UTF8&qid=1336965205&sr=8-1
  9. cliche: http://www.thefreedictionary.com/cliche
  10. Proposition 98: http://en.wikipedia.org/wiki/California_Proposition_98_(1988)
  11. $8 billion, or about 19 percent: http://www.lao.ca.gov/laoapp/LAOMenus/lao_menu_economics.aspx
  12. “fluff: http://www.calwatchdog.com/2010/12/17/school-cuts-would-mostly-target-fluff/
  13. “earmarks”: http://www.calwatchdog.com/2010/09/19/ending-earmarks-saved-ca-schools/
  14. $7.4 billion more in “categorical” program: http://www.calwatchdog.com/2010/12/17/school-cuts-would-mostly-target-fluff/
  15. block grant: http://www.calwatchdog.com/2011/05/03/will-school-block-grants-replace-earmarks/
  16. called a parcel ta: http://ballotpedia.org/wiki/index.php/Parcel_tax_elections_in_California
  17. “A situation that is defined as real is real in its consequences.”: http://en.wikipedia.org/wiki/Thomas_theorem
  18. $1.5 billion in affordable housing funds: http://blogs.sacbee.com/capitolalertlatest/2012/05/steinberg-expects-news-to-be-rough-in-jerry-browns-budget.html#storylink=cpy
  19. luxury affordable housing programs: http://www.calwatchdog.com/2012/01/17/market-not-govt-builds-cheaper-housing/
  20. luxury goods, programs and services: http://www.calwatchdog.com/2010/12/14/ca-budget-filled-with-luxury-items/
  21. wages: http://www.realclearmarkets.com/articles/2012/05/11/the_1930s_and_the_2000s_government_barriers_to_growth_99665.html
  22. obsolescent science: http://www.calwatchdog.com/2012/05/04/calif-stem-cell-research-discovers-a-white-elephant/

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