Congratulations to the once and future governor, Jerry Brown.
With Brown capturing the governorship, on top of the Barbara Boxer win in the US Senate, the legislature staying solidly in the hands of the Democrats and Proposition 25 passing to require a majority vote budget, the Democrats and public unions had a big night and got much of what they wanted.
With the Democrats firmly in control, Brown will now have to lead the state in a “breakthrough” of it fiscal difficulties, as the governor-elect put it. However, he faces some big obstacles in his path.
During the campaign, I heard many times that Brown would be in position to fulfill the role of Nixon going to China – in other words, Brown was the only one who could stand up to the budget pressures created by the powerful public employee unions. The big question is can he convince the unions to make changes, and how hard will he try, given their important role in his victory. The unions for their part will begin the drumbeat for more taxes in the shadow of the win on Proposition 25.
Despite their overwhelming support for Democrats, the one place the voters did not seem to want to go was making it easier to raise taxes. Proposition 26’s success was a surprise given the late money spent against it at the same time the Yes side pulled ads in support.
Proposition 26 demands a two-thirds vote for fees. If fees still required a majority vote, the fee route to finding revenue to balance the new majority vote budget was the logical place to go for the legislative leadership. No longer.
As for the business community, it will have to see what it can work out with the new governor and legislature on taxes, regulations and other important issues. Proposition 26 gives the business community some leverage in those discussions since businesses would be the first targets for potential fee increases.
Over the last few months, I picked up grumbling from a number business leaders that a Democratic sweep and passage of Proposition 25 would convince them to leave or move some of their operations out of state. Was this nervous chatter that will not be pursued, much like those Hollywood stars who declared they would abandon the U.S. if George Bush were elected president, or will some businesses decide California has become too inhospitable to operate here?
Time will tell if the new governor can change some minds.