Truth about CA demolishes hype about Jerry Brown

April 29, 2013

By Chris Reed

California’s dual, incompatible narratives keep rolling along.

On the one hand, we’re supposed to believe the passage of Proposition 30 and Gov. Jerry Brown’s able stewardship have lifted the Golden State out of the doldrums.

On the other hand, there are the actual hard facts.

California’s longest sustained stretch of high unemployment since the Depression continues. We’ve been over than 8 percent for four years in a row. The most recent figures have California at 9.4 percent, among the nation’s worst.

And the state’s finances that Jerry supposedly repaired remain a vast, intractable mess, as two headlines this morning remind us.

Oh, yeah, that budget crisis is no more

First there was this from the L.A. Times:

“SACRAMENTO — Arnold Schwarzenegger persuaded voters nine years ago that if they let him borrow money to cover the budget deficit, California’s financial woes would end for good. A key part of his plan was a new rainy-day fund to insulate the state from further crisis.

“‘It will be a whole new ball game,’ Schwarzenegger said. ‘Trust me.’

“But California was roiled by financial turmoil for years afterward, and today the reserve is empty. With more than $5 billion in bonds left to repay, Gov. Jerry Brown apparently plans to leave it that way.

“The reserve was created without a firm requirement to fill it, and Brown’s proposed budget contains no allocation for the fund. Without a financial cushion, some experts say, California is more vulnerable than many other states to drops in revenue that can lead to social-services cuts or pink slips for teachers.”

Oh, yeah, that state pension fix ended the benefits crisis

Then there was this reminder from Ed Mendel that the state government has a retirement benefits crisis, not just a pension problem, and on a key front the state can’t do anything about it because unions won’t let them — meaning the problem will keep getting worse and worse:

“With pensions presumably shored up by Gov. Brown’s reform and a CalPERS rate hike, will the problem-solving trend spread to what is, by some measures, an even bigger retirement debt: health care promised state workers?

“It was no surprise last week when a Democratic-controlled Senate committee rejected a Republican’s proposal to begin setting aside money to pay for retiree health care promised new state workers, putting a small dent in a $64 billion 30-year debt.

“Labor lobbyists told the committee they do not oppose ‘prefunding’ retiree health care that is now ‘pay as you go.’ This year $1.8 billion is budgeted for annual costs with no money added to invest and yield earnings to reduce long-term costs.

“The labor unions said the funding of retiree health care is a pay issue, possibly affecting the total amount available for salaries, and therefore should be addressed through collective bargaining.”

You follow? The unions won’t let the state act responsibly in dealing with a huge long-term problem involving benefits going to union workers, because anything involving money affects salaries, which must be collectively bargained. This is consistent with the insane view of Jerry Brown’s appointees to the Public Employment Relations Board, which has argued that collective bargaining requirements mean that Los Angeles Unified can’t enforce a 1971 state law mandating that student performance be part of teacher evaluations. Collective bargaining: It’s California’s new Constitution!

Governor’s greatest triumph: Selling a fake narrative

Jerry Brown hasn’t fixed anything. He’s been better than Arnold at getting Dems in the Legislature to acknowledge reality, which is a triumph. But the state government remains a poorly run mess. And the fundamental arc of the California economy remains rotten for poor people and much of the middle class.

The governor’s greatest triumph? It’s somehow persuading much of the media that this factually driven narrative of incompetence and despair is no longer true.