No way to fix a ‘fiscal disconnect'
In his revised budget, Gov. Brown assumes voters will raise taxes and state-worker unions will agree to cut their own pay.
Gov. Jerry Brown on Monday unveiled his revised budget for the coming fiscal year with twin pleas. He pleaded poverty and pleaded with voters to approve more taxes on the November ballot.
Both pleas are curious. If state government is impoverished, it is largely because, for a decade, those who ran it habitually spent more than they took in, oblivious to mounting red ink and despite huge tax increases. Self-inflicted poverty doesn’t generate a lot of sympathy.
Gov. Jerry Brown points to a chart showing how his budget plans will eventually reduce the budget deficit over the next few years as he discusses his revised state budget plan during a Capitol news conference in Sacramento, Monday, May 14.
Moreover, pleading for voters to further punish themselves to pay for the profligate ways of the Legislature and past and present administrations is like the murderer of his parents pleading for mercy because he is an orphan.
The budget deficit is now estimated at $16 billion, compared with merely $9 billion in January. “Why didn’t we get it right in January?” Gov. Brown asked. “You never can get it exactly right.” Seven billion dollars off is apparently akin to a rounding error by the governor’s calculus.
“First gay president” Newsweek cover, and more Mr. Brown’s revised budget gets even curious-er, as Alice of Wonderland might say. For 2012-13, Mr. Brown unashamedly intends to increase spending for K-12 education, even in the face of a greater deficit than he expected. Even that is sleight of hand.
“[E]ducation would receive an increase of 16 percent, subject to voter approval,” the governor said, in reference to the $9 billion tax increase on the November ballot. In other words, the governor plans to spend money he doesn’t have and, we believe, never will.
Shockingly, under his revised budget, the state would continue subsidizing college for low-income students and, to a lesser degree, higher-income families. We suspect Californians will find it curious that, while pleading poverty, the governor proposes greater spending and more subsidies. This is precisely the formula that brought California to its sad condition.
The governor said he would listen to other ideas, if they pass “the smell test.” Here’s one of his that doesn’t. Gov. Brown says he hopes to cut spending by 5 percent by negotiating with state employees for reduced hours or pay. Those are among the unions that financed his election. They didn’t elect him to cut their pay.
The governor tipped his hand several times Monday. Class warfare is high on his agenda. The state’s most affluent residents have doubled their share of the state’s income, Mr. Brown lamented, as if those people stole, rather than earned, their money. “The share of most Californians is shrinking as money is redistributed upward ... for a variety of factors.”
Those factors are the results of a capitalistic, free-enterprise system, which apparently doesn’t jibe with the governor’s ideal. He wants to “capture more of the money.” Capture, as the dictionary defines it, is “gaining control by force,” is the perfect word for what he has in mind.
Mr. Brown lamented that the last time budget stability existed was in the era of wage and price controls and massive federal spending. He didn’t call for that, exactly, but considering his declaration that the federal government front-load funding for his high-speed rail project, how long before he embraces other such “stabilizing” government interventions?
“I am a buoyant optimist,” said the governor. “We are going to build high-speed rail.” What kind of convoluted reasoning leads Mr. Brown to “optimistically” imagine that squandering tens of billions of dollars on his pet train program is appropriate when the state faces a $16 billion deficit for regular programs?
If ever the governor understated, it was when he admitted that “I don’t just quickly jump on austerity and take pleasure in cutting.” He alluded to the difficulty in defunding programs and jobs paid for by taxpayers. “Take-aways are never pleasant,” he said. “Look at what’s happening in Greece.”
Mr. Brown got this much right. He identified recent history as “the decade of fiscal disconnect.” The part he got wrong is advancing more taxing and spending to perpetuate the disconnect by living on borrowed money and borrowed time, ala Greece.
The Orange County Register