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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).