Is Jerry Building Another Obscene Surplus?

CONNECTING CALIFORNIA-It’s an article of faith among the state’s media and political elites that Jerry Brown is very different this time. 

The budget argues otherwise. 

In his fourth term as governor, Brown’s supporters and critics can agree on one thing. He is very good at not spending money. And by not spending money, he is good at building surpluses. 

The question is whether that’s a good thing. Certainly, read any newspaper and he’ll be praised for it. 

But Brown’s surplus building is highly problematic. 

In his first go-round, he built a surplus so large it was dubbed “the Obscene Surplus.” He didn’t invest it wisely or cut taxes to reduce it. And so the surplus fueled the voter revolt of Prop 13 – putting California on its democratically destructive course to intense centralization of power in Sacramento. 

Brown’s new surplus isn’t nearly as large – in large part because of his first surplus. Prop 13 begat a host of measures that limit taxation and gobble up spending, most notably Prop 98. And Brown has added his own formula to the sea of spending and revenue formulas, Prop 2, which is supposed to grab money for various purposes, including spending, debt and a rainy day fund. 

But those measures, of course, mean that vital programs that have been starved – higher education, some social and human services, MediCal – are not getting what they need. 

That’s distorted the debate, and filled the moment with dangers. Will we get ill-considered tax-hiking initiatives from the left – that mess up a tax system? We certainly don’t seem likely to get real tax reform – Brown’s surplus may make it even harder to get interests and voters on board a reform that fits the economy, and creates a higher and more stable revenue base. 

Or could the right find this moment ripe for another tax-cutting measure that puts more limits on public investments? 

Such are the risks of big surpluses.

 

(Joe Mathews is Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It [UC Press, 2010]. This column was posted first at Fox and Hounds) 

-cw

 

CityWatch

Vol 13 Issue 48

Pub: Jun 12, 2015