In one of the least surprising announcements of late, Gov. Jerry Brown on Monday unveiled the annual spring revision of the California state budget, proposing steps to deal with what he says has become a $15.7 billion budget deficit, up from $9.2 billion in January. Absent more tough cuts, and passage of his November revenue initiative, things get much worse very fast, especially for the schools.
Meanwhile, things are apt to get significantly worse for social welfare programs and state workers.
The deficit number was a surprise to some, probably feigned in some cases, especially by Brown's longtime conservative critics.
Fox News, to mention the most obvious of these folks, spinning furiously, claimed that Brown is actually worse than JP Morgan Chase CEO Jamie Dimon. Why? Because Dimon only hid a $2 billion loss while Brown "hid" a "$16 billion deficit blunder."
I mention this, not because I take the Fox report seriously, but because it is the preposterous hyper-partisan extreme that illustrates a common problem.
Which is that there is nothing surprising about the budget deficit number, not for anyone who has been paying attention to, and remembering, regular statements from Brown and state Controller John Chiang about revenues, and from Brown about budget cuts being blocked, by the courts and federal government, and balked at, by the legislature.
It was a simple exercise in arithmetic. Add up the revenue shortfalls reported for months, and repeatedly throughout April, with the blocked budget cuts, and you won't be surprised. (An added factor, as Sacramento Bee columnist Dan Morain points out, is that revenue from corporate taxes is 6 percent lower than expected, and is actually down in absolute terms, even though corporate profits are booming. And corporate taxes make up a shrinking share of the state budget, due to tax breaks.)
Of course, the overall doesn't get done much in an era of news nibbles via Twitter. And many like to hype the surprise when the overall becomes impossible to miss.
Which brings us to an interesting question. Does the air of shock around the latest in California's chronic budget crisis count as a failure of Brown's communications strategy? Or as a success? After all, a bad shock may be what the electoral doctor ordered for Brown's November revenue initiative. I assume he noticed that the numbers weren't being added up in the press.
Brown's initiative looks pretty good in the polls, but if people think things are already turning out well enough, that's an excuse to vote against the tiny quarter-cent increase in the sales tax. (There's not much doubt they will vote to raise taxes on the rich.)
Brown didn't hide anything on the budget. If anything, he kept up a running commentary on the problems around the budget. He just hadn't put it all together in one speech, as some might have had him do.
I wrote last week on my New West Notes blog that a very rugged California state budget in the annual "May revise" was coming on Monday and that Brown had been warning for months about the need for more cuts, and the legislature had refused. I also mentioned that I've mentioned this about 50 or 60 times. Now the situation is, all too predictably, worse.
It all stems from California's chronic budget crisis, which has multiple causes. I've discussed the web of political and systemic dysfunctionality that hamstrings Brown, as I warned him in the fall of 2010, as it ensnared Arnold Schwarzenegger and Gray Davis, many times. The latest proximate cause, and it's a doozy, came at the end of the Bush years.
California has one of the biggest economies in the world. But even a huge economy reels from the loss of more than a million jobs during the great global recession, which cut revenues to state government by nearly 25 percent. Even though revenues have been recovering, California is still among 33 states in the U.S. that have yet to see tax revenues return to the levels at the beginning of 2008.
Which leads us to the coming campaign.
Last week, Brown and his allies turned in 1.5 million signatures for his initiative, about twice as many signatures as needed to qualify his November revenue initiative, and about twice as many as turned in by heiress Molly Munger's minions for her income tax hike-for nearly all boost for schools, a zombie presence on the ballot which trails badly in all polling. But many of those signatures will be invalid, as they always are, which accounts for the overage.
While a number of consultants, strategists, and advisers will be involved in the campaign, the lead consultants will be San Francisco-based SCN Campaigns, whose senior partner is longtime Democratic consultant Ace Smith.
Smith was Brown's campaign director in his landslide victory for California attorney general in 2006.
Then the two men had a bit of a falling out, as Smith, who managed Los Angeles Mayor Antonio Villaraigosa's re-election campaign, seemed to feel that Villaraigosa was the likely next governor.
That was unfortunate for them both, because my observation was that Smith did a very good job teaming up with Brown and Anne Gust Brown, who always plays a senior management role.
That view may have been part of his vision of how things would play out in presidential politics. Smith picked Hillary Clinton as the future, serving as her state director in California, where she managed to beat Barack Obama, and in Texas, where Clinton and Obama split the dual primary/caucus contest. Villaraigosa was a national co-chair for Hillary, and as one of the country's highest-profile Latinos would have loomed very large as a Clinton administration ally.
Brown, in contrast, ran against Bill Clinton in 1992, ending up the distant runner-up for the nomination, and was neutral in the race between Hillary and Obama.
But Hillary did not become president, and no one has ever beaten a Brown for a statewide Democratic nomination in California. This is a streak that goes back to 1946.
Villaraigosa dropped out of the Democratic primary race against Brown, as did everyone else.
But the relationship was not easy to patch up. Smith did aid Brown's 2010 campaign with some independent expenditure efforts early on, which Brown appreciated. His committee, however, did not become the principal independent expenditure effort.
Now Smith, who directed opposition research for Kathleen Brown's premature 1994 gubernatorial campaign, is working with the Browns again.
It's not clear who will run the campaign against Brown's initiative, if anyone, as the governor is doing a good job of neutralizing institutional opposition. But there will be some sort of opposition, hyped or otherwise.
You can check things during the day on my site, New West Notes ... www.newwestnotes.com.
William Bradley Huffington Post Archive
Mark R. Kennedy: Graduate Economics: Balancing the Budget Without Benefit Cuts or Tax Increases
William Bradley: Back on the National Stage? Jerry Brown Brings An Incomplete Story
How come you keep posting guff?
http://www.huffingtonpost.com/william-bradley/nato-summit-2012_b_1530004.html
Get a grip on reality.
STARVE THE BEAST. NO NEW TAXES!!!!
You were getting better for a while.
He is not trying to do a bottoms up reform on how SF govt spends money. It's temporary taxes here, temporary cuts there. If that is all, we don't need a Gov, just an Excel spreadsheet.
Jerry Brown does not run San Francisco city government. I've told you this a million times.
At least you stopped saying Meg Whitman was an easy winner.
Yeah, he sent in a weak plan for pension reform which he knows the legislature will never move on and Brown is silent on that one now.
My post has nothing to do with SF politics, why do you even raise that?
The pooint is Brown is poised to gut CA education and cut off the poor. BTW, he cut off money to people with AIDS/HIV recently throughout the state. Maybe you can explain that one, be my guest.
It is not the poor that can afford to leave - too much public teet to miss.
The Rich can not only leave, they can stay and pay accountats to juggle books.
Failed Capitalism? So many regualtions, taxes and rules to follow implemented by our Government suffocate capitalism.
No hobbies to take up your time besides tapping?
And the economy is into recovery.
But your path would destroy everything.
The best resolution of Cal's problems was presented a few years ago by central valley subjects - division of Cal into two states - Social Democratic Cal consisting of the coastal counties from L.A. to Mendocino County and Free Cal consisting of the rest of the state, including Orange County, San Diego County, San Beradino, and Riverside county.
And what you amusingly call "Free Cal" is the tax-consuming side.
Your "state" would be instantly in the crapper.
Great !!!
Then, you will be free of the burden we place upon you.
Throw us into that briar patch.
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Oh, for God's sake, FOX, that accusation does not even make sense...
First of all, Jerry Brown did not "hide" anything: he disclosed the figures on the state's economic position when they were available.
Secondly, as a CEO who does not have to answer to a legislative body, Jamie Dimon has considerably more freedom to act than an elected governor who has to interact with the other branches of government. In particular, Dimon does not have to deal with the utterly uncooperative CA GOP legislators.
Third, unlike JP Morgan Chase's woes, CA's issues were not caused by activities whose regulation Brown opposes: to the contrary, he has a long standing track record of fiscal austerity.
Also, the salary for California's governor, according to caljobsource.com, is around $200K (their figures are for 2010 so this is a ballpark figure.) Jamie Dimon's? His 2011 compensation, according to CNN Money: $23M.
Which one is worse now?
Something strikes me as very odd about your statement, though... you bought your home in 2004 and you say it is identical to your neighbor's, which was purchased in 1977? Ummm... they don't build houses the same way they did in 1977. Codes have changed, styles have changed. Really doubtful they are identical. Also, here's another thing... we've been looking INTO buying a home now that prices are plummeting and we may be able to actually afford it now. (We knew the market was going to collapse LONG before it actually did... and we know virtually NOTHING about real estate. But we darned sure knew that paying a million bucks for a 2 bedroom in San Fernando Valley was INSANE.) However, I was told by real estate brokers that the annual property taxes are based on a percentage of the purchase price. If you bought your home in 2004 (RIGHT in the middle of the housing bubble when prices were SERIOUSLY over-inflated,) then you obviously paid WAYYYY more for it than your neighbor paid for hers (and undoubtedly more than it is actually worth NOW.) Undoubtedly that's why you are paying so much more than she pays. Your mortgage is much more.