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Reality resurfacing in California

Michael O'Hare, professor of public policy | January 18, 2011

Jerry Brown has issued a budget that engages a $25b deficit.  Note the word engages; not “papers over” or “hides with wishful thinking” or “lies about”; engages. There’s plenty of work not done yet, but this is huge: for the first time in recent memory, our elected chief executive is telling us the truth. Not solving the problem (he needs a vote on tax increases), not solving the problem the way I would like, but it’s a new world in Sacramento. Brown is saying, and pretty clearly, “this is the government you seem to be willing to pay for. You’ve been getting a lot of stuff for ‘free’, by borrowing and cooking the books, but we’re out of tricks and that table is no longer taking bets. If you want some of the stuff that’s going away, you will have to agree to give up some things you’ve been buying on your own.”

The deficit is about $700  for every person in California, where per capita income is about $45K. In other words, if the state economy transferred 1.6% of its consumption to the public sector from the private sector, the deficit would be covered with current levels of public service. (Another 1.6% and we would have the state Californians used to be proud of – not “the state government”, the state and all the things in it that don’t work without government.)  Brown proposes about half spending cuts, including some really savage ones, like $3000 for every student in the University of California system, park closings, and breathtaking slashes in things like Medicaid, home health care, and welfare.  The other half is tax increases, in the form of extensions of temporary taxes enacted two years ago. These are pretty regressive.  It’s not unfair to describe Brown’s proposals as balancing the budget on the backs of the poor, and the tender mercy with which he’s treating the prison system and its shameless union is notable. He’s also holding K-12 education to the level of harm it’s already endured, which is the shame of the state (for now; if he doesn’t get the tax increases, watch out).

He also proposes to  transfer a hatful of responsibilities to local government, including one intriguing proposal that county government take over more of the cost of wildfire fighting on grounds that it’s county and local land use decisions, allowing development far into fire zones, that have made firefighting so expensive in recent years. This complicates the discussion, because whatever level of government provides them, they have to be paid for with some kind of foregone private consumption. But perhaps California would be better off with more variation in local government positioning on the high-tax,high-service and low-tax,low-service scale.

The Republicans are reacting according to their vacuous script, refusing to countenance any tax increases and prating in the usual way about shared sacrifice and waste in government.  The California Republican Party long ago lost its tether to responsibility, reality or even humanity, and no-one takes their policy discourse to mean much more than “please, please, don’t primary me in my safe district of rich people who think they don’t need any government.” But they do have their 1/3 plus blocking minority for tax increases.

I’m not sure how this will unfold, though it will probably take a couple of years for the cuts to make themselves visible and consequential. If the tax extensions fail at the ballot, things will get uglier faster, which might help move things along.  But what direction they move is not certain; the kind of service Keith reports from the DMV might wake people up, but a lot of the pain will be visited on people who are so desperate they can’t really put a political oar in. It also might just aggravate  inarticulate and unfocused government-hating in angry, poorly led, and frightened middle class, and we could wind up in a stable pessimal condition, the Alabama of the west. On the one hand, Brown’s budget’s clarity and honesty is a necessary step toward fixing a broken society; on the other hand, the subsequent steps are not assured.  It’s scary times.

Cross-posted from The Reality-Based Community (tag line: Everyone is entitled to his own opinion, but not his own facts).

Comments to “Reality resurfacing in California

  1. It is time for not only California but for all states to wake up and smell the coffee. Spending has to be brought under control. Citizens are tired of taxes and more taxes. There are so many out of control social programs that cost millions to operate but only create few results. I also don’t believe that the cost to bail out a particular state rest on the shoulders of citizens that do not reside in that state. California has overdrawn its resources and must get back into fiscal control.

  2. The unfunded pension liability of 500 billion dollars is much scarier than the deficit, which will be solved this year as it always has, with gimmicks and accounting tricks, etc. California is a prime example of nanny-state government largesse and its consequences.

  3. Professor O’Hare, as you say ” I’m not sure how this will unfold, though it will probably take a couple of years for the cuts to make themselves visible and consequential. — It’s scary times.” Maybe we should review the past to make certain we know how we got here first:

    BRIEF HISTORY LESSON OF DECLINE AND FALL OF CALIFORNIA (up until Jerry Brown II at least)

    60s & 70s – Golden Age for Equality, as good as it ever got that is

    80s & 90s – Age of Avarice and Decline

    00s & 10s – Age of Fall: Paradise Forfeited – End of the Peace on Earth Dream Increasing failures of institutions, civil rights, freedom of speech, morality, ethics and quality of life

    Lessons To Be Learned (or not which is more usual):

    Not enough of us were skeptics, nor cared enough

    Not enough of us did our own thinking, far too many allowed politicians and special interests to control our destiny

    We have had no leaders like the Founding Fathers since FDR and Eisenhower

    We failed to act on the warnings of history, they were used for academic exercises only

    What’s next?

    • Great time line.
      The good people of California are neither pawns nor victims, instead we were active participants in the decline & fall of California. We closed our eyes to acts of Avarice, if we were going to reap the benefit such as the crazy pension scheme and we conveniently forgot all the values we learned in Kindergarten.
      We wanted to believe our homes would increase in value to infinity. And, were unable or unwilling to face the reality that our leaders and leading citizens were taking more then their share of the pie.
      We took our eyes off the prize and allowed the infrastructure of our state to disintegrate.
      Now, we get to start-over and take care of business like adults

  4. Correctional realignment should save a lot of money. However, actual realignment savings will be in the details. If the low-level offenders occupying 48,500 prison beds are shifted to counties and placed in contract facilities, annual prison costs would be reduced by over a billion dollars. If they are placed in county jail beds, about $795 million would be saved. Contract beds cost $22,496 less than a prison bed, nothing for construction and can be opened in six to 18 months. Jail beds cost $16,396 less than a prison bed but there is a 65,000 jail bed shortage.

    If parole is shifted to counties, and violations handled by the courts rather than the Board of Prison Terms, annual prison costs would be reduced by over $400 million. Under court jurisdiction, violation rates would return to the national average, 20%. Neither critical point was covered in the Governor’s presentation or realignment materials. Hopefully the Governor will assure that both features are incorporated. There is obviously a lot of money at stake!

  5. There is very little difference between Brown’s budget proposals and previous budgets, because Brown’s budget is master-minded by the oil industry. There is no provision for closing corporate and commercial tax loopholes, no oil extraction tax and oil corporation, windfall-profits tax. Califorians pay the highest price for gasoline in the nation. Brown’s budget is the same, because again, it picks on the most vulnerable. Jerry appears to be working for Big Oil and not for the Californians who voted for him.

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