Governor Jerry Brown was clear in his budget press conference that California is pushing the boundaries of a growing welfare state. As the governor put it, California is a progressive state that has made tremendous commitments – and they must be paid for. Even the surprise surplus revenue of $2.4 billion above projected revenue is balanced out by an equal increase in expenditures.
The governor noted that more Californians than expected are now covered by Medi-Cal. He pegged the number at 30-percent of Californians covered by the Medi-Cal program, 1.4 million more than were expected in January’s budget at an increased cost of $1.2 billion.
In response to a reporter’s question that welfare advocates claim that the budget is stealing from children by not increasing certain spending programs, Brown said the increase in medical coverage is a social program from which those children benefit.
But the advocates will demand more.
Brown emphasized two items in his introductory remarks: the increase in Medi-Cal and the effort to pay down teacher pension obligations.
While taking a bite out of the unfunded pensions is a good thing, whether the proposed fix will cover the obligations is uncertain. The budget calls for a $450 million payment this year from the state, school districts and teachers, increasing to $5 billion a year by 2020-21. The Legislative Analyst proposed higher payments in the billions now to conquer the deficit in 30 years. While the May Revise pegs the CalSTRS deficit at about $74 billion, new GASB (Government Accounting Standards Board) pension rules calculate the deficit higher.
The key question for this budget is can the governor hold the line on increased spending requested and even demanded by some of the majority Democrats in the legislature? As the governor said, there are many ideas but you have to pay for them.
He is right to hold the line. But if the majority won’t cut back on programs how would the growing spending be paid for?
There is the traditional way – raising taxes. The governor said he was not interested in that option. That fight probably will come, but perhaps not for a couple of years.
The governor himself vaguely suggested another path – a ‘more elegant and efficient way of running government must be discovered.’ The cost structure of government must be lowered over time, he said.
Efficiency in government is a goal to be applauded. So is improving the jobs climate so fewer people rely on government programs to get by.