Lots of attention on a holiday weekend to the NYT's lead front-page story, by Adam Nagourney, about California's odd "problem" of having a rapidly-burgeoning state budget surplus. Less than three years after Arnold Schwarzenegger departed with a budget deficit in the tens of billions, a combination of tax increases and spending cuts is giving the state a big surplus. As the story puts it:
At first glance, the situation should be welcome news in a state overwhelmingly controlled by Democrats, who have spent much of their time slashing programs they support... Instead, the surplus has set off a debate about the durability of new revenues, and whether the money should be used to reverse some of the spending cuts or set aside to guard against the inevitable next economic downturn.
The new surplus figures are bigger than were known when I last spoke with Jerry Brown, in California in early April, for my story in the new issue. But he was all on top of this issue and the upcoming "what do we do with this money?" debate. Here are relevant parts from the story:
The third and most publicized part of the California budget [after economic recovery, and spending cuts] turnaround was Brown's success last fall in winning passage of Proposition 30, which (among other things) raised high-end tax rates for several years, with a commitment to use the money to avoid cuts in school funding and to pay down the state debt. ... The higher rates will last for seven years, and Brown in his speeches told the biblical story of Joseph, Pharaoh, and the seven fat years and seven lean years. "The people have given us seven years of extra taxes," he said in his State of the State speech. "Let us follow the wisdom of Joseph, pay down our debts, and store up reserves against the leaner times that will surely come."
And, about the shift in power between himself and the legislature about what to do in these new circumstances:
"For me to get the budget cuts these past two years, I had to go to the legislature and say 'Please, please, please!' " he told me. "The Democrats"--who control the legislature--"didn't like it, but they agreed as part of getting the tax increase." In California, the governor has line-item-veto authority--one more indication of the legislature's feebleness--and Brown says he will use his veto power to resist spending increases. "The budget is more or less balanced," he told me. "To unbalance things now, they have to come through me. That is a real shift in power." Meanwhile, Brown's reduced and balanced budget includes more spending for what he considers the big challenges of the future: clean-energy initiatives, an expensive (and controversial) north-to-south high-speed-rail project, new canals and aqueducts, even California-based medical-research projects beyond those sponsored by the National Institutes of Health....
Brown has tried to cut spending so much that the main complaints about him are from the left, and budget-related--especially about his resistance to federal court orders to spend more on California's enormous and overcrowded prison system. "Fiscal discipline is not the enemy of our good intentions but the basis for realizing them," he said in this year's State of the State speech, justifying a hard line against letting spending increases sop up new revenues. "It is cruel to lead people on by expanding good programs, only to cut them back when the funding disappears."
Now, here is a little more from that early-April on-the-record interview, beyond what we could fit in the magazine. My article was brim-full of quotes from Jerry Brown, but they amounted to about 5 percent of what he said in our talks. Here's the fuller-context version of how he set up the coming budget fights:
We are governable. We balanced our budget. Arnold just borrowed money, but we're paying down our debts. Our job creation -- we're 50% faster than the national average. We lost 1.3 million jobs. But we are coming back. Our tax revenues are very volatile, but this increase will be over in seven years. We've got to learn to pay down our debts. We are paying them off at $1.5 billion every year. Then that will be $1.5 billion we don't have to spend.
The [proposed new spending] bills are stacking up! It's like water on a causeway, it's going to come rolling down. But I'm here, and I'm going to make sure we're going to live within our means. They [meaning other politicians] haven't heard that yet. But they will hear it, as I continue to repeat it.
I think the real test is whether we get through this year in a balanced way. For me to get the budget cuts these past two years, I had to go to the legislature and say 'Please, please, please!' The Democrats didn't like it, but they agreed as part of getting the tax increase. The budget is more or less balanced. To unbalance things now, they have to come through me. That is a real shift in power.
All I have to do is hold that line. All I have got to do is play defense.
I don't know enough about the details of the coming budget battles to judge the full merits of Brown's hold-the-line pledge versus the state's unaddressed needs. My point is that he was anticipating stories like today's.
While I'm at it, here was another Jerry Brown riff that couldn't fit in the article. We were talking about the oddities of California's governing structure, especially the unique (among U.S. states) weakness of its legislature and unique power of the public through direct-democracy initiatives. I asked him what he thought about a related structural problem at the national level: the modern abuse of the filibuster in the U.S. Senate. For those joining us late, I am talking about the radical increase in filibuster threats in the past 6 years, which in effect means that it takes 60 votes (rather than the normal simple majority of 51) to get anything done. Brown was not a fan:
We can't have a country based on the 60-vote standard. This is serious.
We've never had to have 60 votes for appointments or day-to day-decisions. Really, you can't govern that way. That's a radical change.
How can you govern? Does England have 60? [JF note: Obviously a rhetorical question. His point is that the U.S. has the drawbacks of parliamentary democracy, including political polarization -- without the benefits, namely the ability to get things done.] I think that 60 votes could end America's ability to govern itself. We have to get rid of it.
That 60 votes is bad.
Image of Joseph and Pharoah from here.