California a model for other states?

cagle cartoon, jerry brown fog, teachers unions, Oct. 22, 2012Feb. 3, 2013

By Steven Greenhut

SACRAMENTO — California’s modern-day progressive Democrats keep crowing about the huge success they’ve had in taming the state’s budget deficit, thanks to Proposition 30‘s tax increases and other “reforms,” and now are championing the Jerry Brown model as a blueprint for the nation.

Is that realistic?

It’s one thing that other states have to deal with our former residents who opted to relocate rather than accept California’s tax and regulatory regimen, but now, apparently, they are going to have to deal with the state’s policies, promoted by California’s liberal politicians.

Not surprisingly, the national media have been quick to tout California’s Democratic-led “renaissance.” For instance, The New Republic this week published a feature, “Back from the Brink,” about California progressives having “achieved the impossible” of a balanced budget.

“Progressive Democratic activists identified the straitjacket of rules that had the state tied up in knots, and devised a systematic plan to change them,” the magazine’s David Dayen posited. “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.

I chuckled at the “debt reduction” reference. How often do progressive Democrats keep a lid on spending or care about paring the size of pension debt? They, indeed, will “invest” in California — and you know what investing means. They will throw money at programs and at government employees without improving accountability or insisting on reform.

Yes, the article is right that California’s Democratic leaders did systematically dismantle many of the taxpayer protections that stood in their way, thanks to Brown’s political skills and seemingly endless union campaign cash. But that’s a political victory, not a fiscal blueprint.

Brown and his allies killed the Legislature’s two-thirds budget-approval requirement, turning Republicans, already in the minority, into an irrelevancy. Because of previous supermajority rules, the GOP could tie up budgets, forcing Democrats to look at the kind of budget cuts and fiscal restraints they try to avoid.

Republicans irrelevant

No more. Now, GOP lawmakers aren’t even included in the budget process. Now the Democratic legislative supermajorities can raise taxes whenever they choose. Maybe a moderate Democratic caucus will emerge, but even so-called moderates have always been willing to raise taxes.

The Democrats likewise moved statewide initiative votes to general elections, rather than primaries, thus ensuring greater Democratic turnout to support the two big tax increases on last November’s ballot. There was also redistricting and a Louisiana-style jungle primary that — with the support of some good-government Republicans — seems to have further eroded what little power the minority party already had.

The New Republic piece points to Democratic success at changing voting laws, allowing people to register online. That, along with the vast networking of grass-roots and union organizing efforts, resulted in a massive wave of Democratic voters that gave Democrats new congressional seats and two-thirds majorities in both houses of the Legislature.

Yes, Democrats mustered the powerful interest groups that support them and then rewrote the rules to gain more power in a state where the GOP already is on life support. Democratic activists can try to replicate this elsewhere, and I would advise other states against replicating the strategy.

Tax increases

The Democratic budget blueprint remains the same: Keep raising taxes.

Dayen argued that Democrats still need to take on Prop. 13 (1978’s historic property-tax limitation) and eliminate it for commercial property owners. He also called for raising other corporate taxes and imposing a tax on oil production. Never mind that these tax hikes could weaken the real estate and oil-exploration rebounds that are crucial to the optimistic economic projections that helped balance the budget.

Old-style progressives a century ago gave California the referendum and initiative so the people could keep in check powerful interests. Modern-day progressives are chipping away at that process so no one can challenge public-sector unions.

The progressives’ success means reform-fighting unions for teachers, prison guards and other employees can protect their unsustainable pensions and fight reforms that could possibly improve the shoddy public services that many on the left care about. Also unaddressed by this new blueprint is the “wall of debt” the state government and municipalities are galloping toward.

Despite the governor’s nod to holding the line on spending, this new political dynamic is dependent on the things progressives have been unwilling to do: control their appetite for increasing the size of government, limit the demands of labor unions and restrict their desire to tax businesses into oblivion (or, to Nevada). Think, for example, about the governor’s high-speed-rail plan.

Instead of pulling California back from the brink, the most-recent election may wind up sending the state in the other direction. I do agree with Brown and the New Republic that other states ought to pay attention to what’s happening here. And their response should be to fight it.

Steven Greenhut is vice president of journalism at the Franklin Center for Government and Public Integrity. Write to him at: [email protected]

 

5 comments

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  1. @SoquelCreek
    @SoquelCreek 3 February, 2013, 10:10

    Haven’t you heard? California is “the oasis of Democratic politics.” See what this means to everyday Californians who’ve lived under decades of Democrat Party control.
    http://soquelbythecreek.blogspot.com/2012/10/california-oasis-of-democrat-politics.html

    Reply this comment
  2. Hondo
    Hondo 3 February, 2013, 11:04

    So then why does Kalifornia have the highest unemployment rate in the country ( but for a couple small states). No place on earth is blessed with more ways to grow the economy and grow jobs. Kali should have an unemployment rate below 7% at least.
    And they have a combined public pension debt of nearly a trillion which will mean in not so many years, the state will have to cut all services to pay the salaries and the pensions of the public unions.
    Kalifornia is a model that needs to be avoided.
    Hondo…

    Reply this comment
  3. Douglas
    Douglas 3 February, 2013, 16:07

    SoquelCreek,

    Aren’t you gilding the lily here (again)? Still?

    We get it. California is bad. But perhaps you would be more credible if you were just a bit less strident with your charts and graphs.

    CTA and SEIU are the two largest “individual” campaign spenders in California politics. HOWEVER, business interests combined spending is more than ten times the spending by organized labor.
    ————————–
    “California has 12% of the nation’s population but 33% of the nation’s Temporary Aid to Needy Family (TANF) welfare recipients. Why is that?”

    California has twelve percent of the nation’s population AND about twelve percent of the nation’s welfare SPENDING, according to the US Census Bureau. It is true that we have more TANF recipients, but TANF is a very small part (less than two billion) of California’s total welfare spending (over fifty billion, not counting federal matching funds.)

    California welfare spending per capita is higher than average, but not 20% higher, or whatever your chart is implying. At least eight other states have higher per capita welfare costs than California.
    —————————–

    Sales tax: WOW!! that’s an impressive chart! But according to the Tax Foundation, California ranks TWELFTH in combined state and local tax rates ( http://taxfoundation.org/article/ranking-state-and-local-sales-taxes-1 )

    For sales tax per capita, California is number 15.
    —————————

    Unemployment is too high in California. Taxes are too high. Regulations are onerous. Why do you feel the need to exaggerate?

    Reply this comment
  4. @SoquelCreek
    @SoquelCreek 4 February, 2013, 18:22

    Douglas, the facts are what they are.

    Regarding CTA & SEIU, yes, businesses also give campaign money. Surprisingly, business money tends to go to BOTH parties. Over 90% of CTA & SEIU money goes to one party–the Democrats. Oh, and don’t forget, CTA & SEIU are only the two biggest spenders among the many public-sector unions. Look at the others that gave to Proposition 30.
    http://soquelbythecreek.blogspot.com/2012/11/wecandobetter.html

    There was a similar pattern for 2010’s Proposition 27, which also included millions from out-of-state, big-money Progressives. Thankfully, in 2010, voters and even the media saw the corruption in Proposition 27.
    http://soquelbythecreek.blogspot.com/2010/09/proposition-27-revealed.html

    You might find one of my other posts interesting. It shows WHY union money matters so much in California politics. It has everything to do with concentrating the spending.

    Do Public-Employee Unions Have Major Influence in California Politics?
    http://soquelbythecreek.blogspot.com/2011/02/do-public-employee-unions-have-major.html

    Yep, there are other states where state and local sales tax exceed California’s. But nowhere else do you have the nation’s HIGHEST state sales tax and the nation’s 1st, 2nd, 3rd, and 5th highest marginal income tax rate (AND one of the nation’s highest gasoline taxes). The facts are the facts.

    Reply this comment
  5. JLSeagull
    JLSeagull 5 February, 2013, 14:55

    Advice to all states considering following California’s “model” – DON’T.

    Republican governed states are performing circles around Democrat governed states: http://washingtonexaminer.com/conn-carroll-americas-governing-party/article/2520285

    From Conn Carroll, Senior Editorial Writer for the Washington Examiner:

    “Republicans currently occupy the governor’s mansions in 30 states, representing 58 percent of the U.S. population. They control both the governorship and legislature in 25 states, representing 52 percent of all Americans. Democrats enjoy such control of only 14 states, representing just 33 percent of the country.

    “And not only are Republicans governing more than half the country, they are objectively doing a much better job at it than Democrats are. According to the latest data from the Bureau of Labor Statistics, the average unemployment rate in the 25 states controlled completely by Republicans is just 7.2 percent, more than half a point lower than the national 7.9 percent unemployment rate. In the 14 states with full Democratic control, unemployment is 8.4 percent, a full half-point higher than the national average.

    “The Republican state economies are growing faster too. According to the latest data from the Bureau of Economic Analysis, the real gross domestic product of the 25 Republican-controlled states has grown almost .25 points faster since 2008 than the real GDP of the 14 Democratic-controlled ones. And they aren’t doing it by going into to debt. The Republican-controlled states on average have a Standard & Poor’s credit rating a full grade higher (AA) than their Democratic counterparts (AA-).”

    A brief summary is that when it comes to governing states, Democrats can’t find their way out of a soggy paper bag.

    Reply this comment

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