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William Bradley

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Jerry Brown and the 2012 Initiative Wars

Posted: 12/03/11 03:38 PM ET

Governor Jerry Brown is in the midst of some major moves this month with regard to California's chronically troubled finances, all playing out against the backdrop of next year's likely major ballot initiative wars.

Working with the rest of the Democratic coalition, he is on the verge of rolling out a proposed initiative for the November 2012 ballot to raise an estimated $7 billion a year in new revenue.

And he is pushing his public pension reform plan, appearing before the state legislature's joint committee on public pensions to testify, as more conservative interests prepare assaults on the public pension system and on public employee funding of political campaigns.

Brown, the only governor in decades to testify before legislative committees, was in a jaunty mood Thursday afternoon, though direct about some of the daunting aspects of the state's pension overhang.

With regard to the fateful 1999 expansion of public pension benefits, premised on an ever-rising stock market rather than actual contributions, said Brown: "I was incredulous at the time, and I'm still incredulous."

While legislative Republicans generally praised his plan, they asked why it doesn't go farther to more directly address current employees and not just future employees. Brown's answer is that he is pushing a plan that has a decent chance of being enacted. Legislative Democrats, mostly tightly aligned with public employee unions, were tepid in response, but wary of looming initiative action.

Brown, with labor, business, community, and Democratic allies, will shortly unveil the initiative he intends to back. It would provide about $7 billion a year in new revenue over a five-year period, coming from increased taxes on high-income Californians and a temporary increase in the sales tax.

Income tax rates would increase in tiers above $250,000 per year, sharply so at the highest end. The great bulk of the increase would fall on the so-called 1% which we've been hearing a lot lately.

Plenty of public polls show widespread support for raising taxes on high-income Californians, and Brown's private polling shows support for the sales tax hike in the mid-50s range. Which means that a serious campaign will be needed to win. But after the likely budget cuts ahead, voters will have a sense of the consequences of inaction.

It's not the only proposal out there, but the others all have more obvious political flaws.

There's the plan unveiled in late November as the centerpiece of a reform agenda for California by the Think Long Committee of a few mega-rich individuals and a few high-profile former officeholders, headed by nomadic billionaire Nicolas Berggruen. This plan would cut the income tax rate for the wealthy and for big corporations -- which is simply fatal in an election in the best of times, which these are not -- and expand the sales tax to include all manner of services.

A number of Democrats view Think Long as an elaborate Trojan Horse, its panoply of reform a cover for the core agenda of cutting taxes for the rich and big corporations, including the billionaires on the Think Long committee itself.

One would not have to be Don Draper of Mad Men fame to kill the whole plan with one ad.

A couple of other proposals are less terminal, but also problematic.

The daughter of Warren Buffett's multi-billionaire business partner Charlie Munger, Molly Munger, has a plan to raise income taxes, but only for the schools. Which is nice, but the schools are only part of the equation of governance and public services in California. And her plan would raise taxes for all but the lowest-income Californians, which is a total loser.

These two are continuations of very rich people deciding to parachute in with pet schemes to solve problems, often regarding issues which are pet issues. Since these folks have a great deal of money, they may think that money is far more determinative than it is and persist despite the unworkability of their schemes, though for how long is the pertinent question.

Another tax plan, from the California Federation of Teachers, is an example of a different phenomenon. The CFT, the smaller of the state's two teachers unions, is one of the state's most left-wing unions. It, too, wants to raise taxes on the rich. But principally for education, with some senior services and public safety in the mix, and with no tax hike on services.

If the rest of labor goes with the governor -- and they are not part of a mostly lefty coalition the union has rolled out so far -- the CFT probably doesn't have the heft to go its own way.

Brown, who has been in stealth mode much of the year, will have to be the principal public face of the initiative campaign. Turnout will be up in a presidential year, but the bloom is off the rose of Obamamania in the not so Golden State.

Less than half are inclined to re-elect Obama, according to a new Field Poll. And his job approval rating, once sky high, is down to 48 percent approval and 44 percent disapproval.

This in a state he carried over John McCain just three years ago, 61 percent to 38 percent.

Things look much better for Obama when he's matched against any Republican. He has a 10-point lead over Mitt Romney and a 20-point lead over Newt Gingrich. Romney stands better in his suddenly desperate fight against Gingrich here than he does in much of the rest of the country.

Obama will carry California next November. The real impact here is that his name, or brand, if you will, is not nearly so sizzling as it once was. So he may not motivate voters the way he used to, which could be a major factor in down ballot contests such as initiatives.

With Senator Dianne Feinstein's numbers down -- which doesn't mean she won't coast to victory next year against a sacrificial Republican, as that party continues to melt down here -- Jerry Brown is the state's most popular politician.

Though Brown's unfavorable rating has inched upward toward the number of people who voted for billionaire Meg Whitman last year, he is avoiding the problems that most chief executives have of catching the blame for tough times.

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


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