Will Jerry Brown's Budget Save California?

By Ray Gustini

Photo provided by crooksandliars.com

How do you solve a problem like California's $28 billion deficit? If you're newly-elected Governor Jerry Brown, you introduce a fresh series of cuts to California's already reduced operating budget. Brown won't officially unveil his program until later today, but the Sacramento Bee already has the details on the governor's plan for "deep program cuts, a June election to extend tax increases, and a broad reordering of state and local government."


Is Brown taking the right approach? Is the state's budget crisis even solvable? A variety of opinions from around the Web:

No Sacred Cows Based on the Sacramento Bee's assessment of Brown's cuts, it's tough to argue the new governor is playing favorites. In addition to "deep cuts" to the UC and CSU systems and increased co-pays for participants in the state's MediCal health program, Brown has reduced his own office's budget by 25 percent. If approved, the revenue generated by extending 2009 increases to vehicle, sales and income taxes would raise "$8 billion to $10 billion over 18 months," which would then "flow to local governments to help finance government realignment." Brown is also pursuing a policy of realignment that offers "several plans to shift programs [away from the state level and to] local governments." These plans include "eliminating the state Division of Juvenile Justice, instead sending money to local governments to house juvenile offenders" and housing low-level prisoners in county jails.

The Trouble With Realignment Writing in The Los Angeles Times, Zev Yaroslavsky and Gloria Molina--members of the Los Angeles County Board of Supervisors--praise Brown for being "refreshingly candid and transparent about the magnitude of the [budget] problem" but express doubt about whether realignment will help in solving the problem. Yaroslavsky and Molina admit that while the policy--designed to "restore local administrative control and stabilize unpredictable revenues"--sounds appealing, it is in fact a kind of budgetary shell game. They explain:

If the state proposes to save itself money by shifting both program responsibilities and the funding for them to local governments, where will the savings be? Can it really be that local governments are so much more efficient that citizens will receive the same or higher levels of public services at substantially reduced cost?

Too Bullish On Taxes In an op-ed for The Wall Street Journal, UCLA economics professor Andrew Atkeson and 2002 California GOP gubernatorial nominee William Simon argue that raising taxes is the very thing the state shouldn't be doing. The current shortfall, they believe, exposed the California's "dangerous reliance on high income tax rates on the state's top earners" to meet its budgetary needs. Noting that the state's "top marginal personal income tax rate is one of the highest in the country, and its corporate tax rate is among the highest," Atkeson and Simon urge "extreme caution" on raising taxes even further. What's really needed, in addition to other reforms, is an effort to foster a "better business climate in California by reducing corporate taxes, regulations and red tape that are now strangling existing business enterprises and keeping new ones from starting up."

Blow To Good Government The goal of the cuts is to save money and make state government more efficient and transparent, but California Watch's Chase Davis suggests they will actually have the opposite effect. Davis cites the uncertain fate of the Brown Act, that requires the state government to reimburse local agencies for the cost of publicizing open [local government] meetings." With a $20 million annual budget, the law has been a "target of cost-cutting in recent years." Even though the passage of Proposition 59 in 2004 made it a "constitutional right [in California] to access public meetings and documents," Davis says local governments could become "lax in their disclosure without reimbursement" from the state.

 
Courtesy the Atlantic Wire