Wishful Thinking Already Pushes State Budget

John Wildermuth
Journalist and Political Commentator

There’s already plenty of wishful thinking surrounding the state budget rolled out Thursday and most of it doesn’t come from Jerry Brown.

Republicans and Democrats alike, each for reasons uniquely their own, see nothing but the bluest skies ahead for a California economy that’s featured little but storm clouds in recent years.

For Republican legislators, the growing economy means that the state can make out just fine without the $6.9 billion tax increase the governor wants to put on the November ballot.

“Revenues are up by 3.5 percent this year and are projected to grow at a fast pace in the years to come,” newly elected GOP Senate Leader Bob Huff said in a statement. “The anticipated growth in revenues will help us to bring spending in line with revenues without a $7 billion increase in taxes.”

Then there are the Democrats, who say that the new money spewed out by a growing economy is just the thing to avoid the $4 billion in program cuts the governor says are needed to balance the budget.

“I am wary of continuing down that path” of more budget cuts, Senate President Pro Tem Darrell Steinberg said in his own statement Thursday. Projected revenues increased $1.5 billion in the November-December round of state estimates, he said, and “if that trend continues even slightly, we may avoid the need to make the kinds of cuts and governor now suggests.”

Highlight the word “may.” Steinberg doesn’t mention that even with those projected increases, the state still fell about $1.9 million short of what last year’s optimistic budget forecast predicted. And while Huff and his Republican colleagues are quick to dismiss the need for any additional revenue – aka, taxes – they are a lot slower when it comes to saying what programs should be slashed to bring the budget into balance without that new money.

Brown, for his part, is working a hire-wire act. He’s proposing more that $4 billion in cuts in welfare, Medi-Cal, the Cal Grant college scholarship program, childcare and education, programs Democrats have fought to keep whole. But he’s also backing a tax initiative, which party leaders long have yearned for.

Both the cuts and the taxes are necessary, Brown warned Thursday.

“These are not nice cuts, but that’s what it takes to balance the budget,” the governor said.

The new budget “keeps the cuts made last year and adds new ones,” he said in his budget message. “The stark truth is that without some new taxes, damaging cuts to schools, universities, public safety and our courts will only increase.”

If that tax measure doesn’t pass in November, Brown’s backup plan calls for a mid-year slash of $4.8 billion in K-12 school spending, which is the cost of three weeks of classes. The UC and state college systems would lose $200 million each and court funding would be cut by $125 million, which could force three days of closure each month.

Republicans immediately complained that Brown is holding the state hostage, threatening to hamstring popular programs like education and public safety unless voters pass his tax increase. “A cynical, scare tactic budget strategy,” is how Republican Party Chairman Tom Del Beccaro described it.

He’s right, of course, but so what else is new with campaigns surrounding any money measure that hits the ballot. The Republicans and their anti-tax allies will have a chance to make their own case in November and anyone who thinks they won’t come up with a “cynical, scare tactic” strategy of their own hasn’t been paying much attention to California politics over the years.

But Brown’s more immediate problem is with his own party, since they have the votes needed to pass his budget – no Republicans need apply. Democrats didn’t like the cuts in last year’s budget and really won’t want to double down and make the ones Brown’s proposing this year. They’re likely to take any bit of positive economic news in the next few and declare that happy days are here again and no heavy lifting – or unpopular votes to cut state programs – will be required.

Steinberg already has said he doesn’t see any need to quickly make major cuts that will take effect in March, even though the delay could mean deeper cuts will be needed later in the year.

Brown warned that it’s impossible to guarantee that the budget numbers will hold up over the next year. The numbers could get better, but they also could get worse.

Based on the past few years, it’s not hard to guess which way to bet.

“It’s an honest budget, but it’s not a fortune-telling budget,” he said. “We don’t have clairvoyance at the Department of Finance.”

Brown described the budget as tough medicine and admitted that the plan “will be very hard to digest in this building.”

The “big if” behind the budget is the need “to hold the line on spending and make the tough cuts or the equivalent of what I’ve put in the budget,” he said.

The question now is whether anyone on the Democratic side of the aisle is willing to listen.

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