Sunday, January 02, 2011

Jerry Brown's initial approach to the California budget crisis

Jerry Brown will be sworn in as Governor of California on Monday, starting his third term as Governor after his two terms from 1973 to 1981.

David Siders reports on what appears to be a trial balloon initial framing of his budget proposals in Brown plans to take tax hike extension to voters in Brown plans to take tax hike extension to voters in June June Sacramento Bee 12/30/2010:

Gov.-elect Jerry Brown will propose a ballot measure to extend temporary tax hikes set to expire next year, while pressuring fellow Democrats to consent to billions of dollars in spending cuts in virtually every area of state government, sources said.

The tax package, planned for the June ballot, would extend higher vehicle, sales and income tax rates. It likely won't include additional new taxes, such as an oil severance tax. ...

The budget deficit is estimated to be as much as $28 billion over 18 months.

Brown will propose a budget including roughly $10 billion in cuts, about $10 billion in revenue – mostly from the proposed tax extension – and about $8 billion in one-time fixes, a source said.
I say it appears to be a trial balloon, because the story is based on anonymous sources. This is a very sloppy journalistic habit; why should sources for such a story be anonymous?


California state politics has been seriously dysfunctional for many years thanks to the Republicans' success in passing "starve the beast" measures to make even the normal functioning of government a continuous difficult even in the best of economic times. Part of that dysfunction has been the deterioration in press coverage, which creates a mutually re-enforcing cycle of a non-virtuous sort.

So, in this story, Siders begins with a Republican-friendly framing - Jerry Brown wants to raise taxes! - rather than the reality that will most impact people's lives, which is that important state services faces huge and long-term reductions. As reporting on Jerry goes, it's not the worst, by any means. He doesn't use any dumb press scripts (e.g., Gov. Moonbeam) and he does sketch out the messy process we're likely to see: obstructionist Republicans, calculating Democrats, a lot of proposals and counter-proposals and speculation and rumors. The state budget process in California has been very complicated even before this year.

The press will focus mainly on what they are used to reporting and understand, which is the horse-race calculations. Any proposed tax initiatives to be voted on by the public will be horse races that will win or lose at the polls in June, so most journalists will likely follow Siders' example and focus on those.

Siders gets around to spelling out what seems to me (even without anonymous sources) to be Jerry's approach about halfway through his report:

Brown has said he wants to negotiate a budget agreement with the Legislature by March, far sooner than is typical. That would allow time for a special election in June. Brown promised in the gubernatorial campaign not to raise taxes without voter approval.

Brown will need a two-thirds majority of the Legislature to place the tax-extension matter on the ballot, requiring some Republican support.

Senate Republican leader Bob Dutton, R-Rancho Cucamonga, said he does not believe Brown will achieve that. [my emphasis]
Jerry committed himself to not raise taxes without voter approval. Given the semi-plebiscitory form of government we have in California with the initiative and referendum system here, that actually makes a lot of sense. Without walking through all the problems of that system, the current state of things is this. Ever since 1978, Republicans have pushed measures aimed at limiting taxes. At the same time, other initiatives have mandated certain kinds of spending. And once a law has been passed on a statewide vote, it can normally be changed only by another statewide vote or a court decision. The result is that the state has an extremely complex tangle of revenue restrictions, spending restrictions and spending mandates that actually remove much of the budget from the discretionary control of the state legislature.

There are some larger lessons in that about how a nominally democratic tool like initiative and referendum can actually wind up paralyzing the functioning of democratic government. For more on that aspect, see the article on Plebiscitory Democracy in the Routledge Dictionary of Politics, 3rd edition.

But Jerry's budget fight isn't aimed an drawing larger political science lessons. It's dealing with the practical consequences in 2011 and 2012 of the state's current financial situation. If he can get the legislature to meet the March date for a budget, he can get the tax measures on the ballot and use the campaign for them to go around the established media and reframe the issues at stake as ones of critical services as well as the fairness of tax burdens.

The Reps are already signalling they won't go along with it. And if they hold to party-line discipline, they can deny Brown and the Dems the 2/3 majority they would need to put the measures on the June ballot as referenda. Jerry could try putting the same measures on the ballot as initiatives through signature-gathering campaigns. But I expect him to insist on the legislature, including the Republicans, to live with the consequences of rejecting the tax option. That would mean putting through the cuts that would be required to balance the budget. The Reps will assume they can then blame Jerry and the Dems for the consequences. But Jerry Brown isn't Barack Obama. He'll make sure that the public hears clearly that its the Republican Wrecker Party who refused to allow the public to even consider revenue options for dealing with the crisis.

In that connection, it's notable that Siders' mystery sources are speculating about the June tax measures being temporary. That would allow them to be used in addressing the immediate crisis and also test the voting public's appetite for undoing the Republicans' starve-the-beast approach to state government.

Also important to watch will be how Brown handles Republican opponents of his tax measures in the legislature and during the ballot measure campaigns. I expect him to be aggressive in trying to mobilize pressure in their home districts to get them to cooperate.

Jerry's advice to "fasten your seat belt" may have been a broader warning than Siders seems to think it is.

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