THE BLOG
05/15/2013 05:36 pm ET | Updated Jul 15, 2013

How Jerry Brown's California Budget Revision Is Playing

Championing what he calls "prudence, not exuberance," Governor Jerry Brown on Tuesday rolled out the annual "May Revise" of his proposed California state budget. How's it playing? Oh, and what's the play?

Brown delivered the May Revise to the approval of most. But amidst muted approval from Republican legislative leaders there was some disappointment among Democrats over its lack of major new spending, though Brown had signaled that all along. Why disappointment? Because there were widespread estimates that state revenues were running a whopping $4.5 billion ahead of projections. (Yes, naysayers, the $26 billion budget deficit of a few years ago is gone -- due to a combination of budget cuts and the landslide passage of the Proposition 30 revenue initiative -- and the balanced California state budget is holding up very well.)

That massive pot of new money looked like a way to once again fund programs that have been cut by Brown and former Governor Arnold Schwarzenegger as a result of the great global recession. But Brown, noting that he might have to cut programs once again down the line if the sputteringly recovering economy goes sour, didn't want to do that.

His solution? A different perspective. In essence, he is saying this: Pay no attention to this big pile of money. It's smaller than you think, it's one-time only, and besides it has to go to something you can't oppose.

Brown dealt with the big windfall in state revenues by downgrading it, saying it's largely the result of rich taxpayers beating the end of the Bush/Cheney tax cuts for the rich. He spoke of the impact of sequestration and austerity and new federal payroll tax and so on, and said that virtually all of it must go to education under the auto-pilot budgeting introduced by Proposition 98, making it a one-time deal.

This leaves Brown with a state budget is scored with an $850 million surplus, accompanied by a $1.1 billion reserve.

Brown saw in 1978 the danger of seeming to have a very large pot of money sitting around. A rainy day reserve is popular in concept, but a tempting target in politics. Some will want to spend it on ongoing programs. Some will want to rebate it.

In 1978, Howard Jarvis, the landlord lobbyist-turned-populist, seized on a big pot of money sitting there in a reserve as the rationale to cut property taxes. That led to Prop 13.

Brown's solution this year was to redefine the pot of money, creating the necessity for all the new money to go to education.

Fully $1 billion of the new money for education will go in furtherance of "Common Core" standards (mathematics and English language) to yield improvements in teacher training, technology, and textbooks.

Another angle of budget criticism along with concerns from disappointed social program advocates comes from the Sierra Club, which is perturbed that Brown is establishing a precedent by directing revenues from the greenhouse gas cap & trade market -- yes, naysayers, this Schwarzenegger-established market mechanism is functioning -- into the general fund rather than earmarking the money directly to green doings.

But I would suspect that the most important criticism from the Brown standpoint actually hinges on his new education funding plan to place more money into low-income school districts and districts with high concentrations of English-challenged students by keeping it as part of the state budget.

Brown's new school funding plan, running into some opposition in the legislature, is very much at the core of his budget plan and of his education and social strategies in the state.

It's a "three-legged stool" in which 80 cents of each education dollar goes to base grants for all students in a district, with 16 cents allocated for each student who is either low-income or English-as-a-second language. The remaining 4 cents is allocated to districts with a high concentration of such students.

Some legislators want to eliminate the latter part of the formula, throwing the 4 cents per dollar back into the overall educational pot.

Brown will resist this strongly.

He has several obvious tools of persuasion. His veto pen, which he wielded when he became that rare governor to veto a budget in 2011, and the fact that legislators stop getting paid next month if the budget has not been enacted. He also has various things that politicians want, such as the ability to sign their pet bills and make appointments.

And he has the perception of the revenue picture. It's not unlikely that other estimates of California state revenues will be higher than that of Brown's Department of Finance. Then there will be something of a debate, in which reality, or at least, the political version of it, may become negotiable to a certain extent. To a certain extent with regard to a program or two that some key legislators may want in exchange for supporting Brown's line on education.

But that's just my speculation.

While the budget rolls on, Brown's would-be Republican rival, former Lieutenant Governor Abel Maldonado, is doubling down on some wrongheaded politics.

Maldonado, who backed away from an off-the-cuff charge Friday that Brown is orchestrating the negative reaction to last week's backfired attack on Brown policy of "realigning" lesser offenders from state to local custody, said on Friday afternoon that he will "probably" remove imagery of a scary-looking black guy who has no relation to Brown's policy from campaign materials.

"Probably?"

Really?

One of the worst things one can do in politics is compound a huge mistake with stubbornness.

At a press conference in the Inland Empire community of Fontana, where he was joined by the city's African-American mayor who is also the regional vice chair of the California Republican Party, Maldonado was asked what his alternative to realignment would be.

His answer? Building more prisons. Where would he get the money? From canceling California's landmark high-speed rail program.

Er, putting aside the fact that high-speed rail is funded from different pots of money, that would be the high-speed rail program Maldonado touted as Schwarzenegger's lieutenant governor. Oh, well.

Meanwhile, Brown's attention is focused on pushing forward on the budget, education reform, the high-speed rail and energy programs that he and Schwarzenegger and former Governor Gray Davis emphasized, and his variant on a new water program.

You can check things during the day on my site, New West Notes ... www.newwestnotes.com.

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