California’s budget, like the economy as a whole, may
be slowly slogging out of the Great Recession. Tax collectors have logged
better than anticipated receipts. The Legislative Analyst reports revenues for the
current fiscal year to be about $2.5 billion better than expected. 

Of course, only in Sacramento would more revenues
(without tax increases) be a mixed blessing. The Brown Administration is downplaying the revenue
bump, placing it in the context of overall pressures on the budget, while
Republicans are barely restraining themselves from singing "Happy
Days are Here Again." These reactions are proxies for the parties’ positioning
on the Governor’s proposal to temporarily extend the 2009 tax increases.

A $2.5 billion, or even a $5 billion improvement in
tax revenues is still a long way from closing the remaining $15 billion
deficit. Yet the least painful approach and most enduring solutions are still
conspicuously absent from the public policy agenda – improving the state’s
economic performance. After all, the $2.5 billion in higher revenues came about
because of economic growth. Imagine what would happen if growth could be
improved and quickened.

California has fallen further and faster than most
other states. This chart shows our overall employment losses, since the
beginning of the recession, compared to the nation as a whole, to Texas, and to
the next ten largest states.

Imagine the economic growth, and the effect on the
state’s treasury, if California had matched even the dismal employment record
of the nation as a whole, never mind Texas.

The secret to long-term budget health, and support of
schools, universities and public safety, lies in economic growth. The active
avoidance of this topic by California’s leadership is stunning.