Jerry Brown is not thinking about being a one term governor. Introducing his 98 year old aunt sitting in the audience at his swearing-in ceremony, Brown told the gathering that those who were hankering for his job would have to wait. He has good genes and plans to be around for awhile, he said. Those thinking that Brown might consider stepping down after one term better reconsider.

Brown insisted — twice — that he had no mental reservations in taking the job. Probably a good idea, since anyone who wants to be governor of California probably should have his head examined.

When he reiterated his three principles espoused during the campaign, his pledge to only raise taxes with a vote of the people got the softest applause. My interpretation — most in the audience would rather see tax increases with no vote of the people, just raise the taxes!

Taxes, of course, are the crux of the budget crisis that Brown hopes to solve. Taxes are the glue that holds government together. When government tries to do too much without the necessary revenue government unravels.

California new governor Jerry Brown famously traveled to Japan in the 1980s to study Zen Buddhism. Asked by a public radio station last year what Zen had taught him, he replied: “Illusions are endless and our job as human beings is to cut them down.”

In that spirit, I offer Brown five head-scratching Zen riddles that we must hope he can answer one day. Zen riddles, or koans, are stories, statements or questions that can’t be understood by rational thinking.

5. The master said: “Zen is a man hanging from a tree over a cliff. He is holding on to a twig with his teeth. His hands hold no branch. His feet find no branch. Up on the cliff-edge a man shouts at him: ‘Why did you run for governor again?’”’

4. If he gives the public employees what they ask for, he is lost. If he says no, he is still lost. What must he do?

3. A state government has been cutting its budget for years. This budget consists mostly of money for local governments. If a new governor gives the local governments control over their money – and then offers them much less money – how long will it take to draft the recall petitions?

2. If a state is ungovernable, does a new governor make a sound?

1. Prop 98.

Based on the job numbers we’ve seen over the past nine months, I would agree with recent projections coming from our California-based economists that unemployment in California will continue to be above 10.5% throughout 2011 (higher throughout most of the year). However, there are four employment dynamics that may impact the pace of recovery, and that we need to keep an eye on.

The UCLA Anderson School in December projected that unemployment will go down slowly in 2011 from the current 12.4% only to 10.9% by the end of 2011. Anderson economists also projected that the state would gain a net of 183,000 jobs. Chapman University economists in December projected that the state would gain a net 167,000 jobs and that the California unemployment rate would remain above 10%.

These projections are consistent with the no-significant-hiring trend we’ve seen in California in 2010. The most recent monthly state job numbers, released on December 17,2010, showed a very modest net 1600 jobs, with a number of the major job sectors (trade, transportation and utilities; financial services; manufacturing) registering net job losses.

Cross-posted at NewGeography.

Jerry Brown’s no-frills inauguration yesterday as California governor will make headlines, but the meager celebration also marks the restoration of one of the country’s most illustrious political families. Save the Kennedys of Massachusetts no clan has dominated the political life of a major state in modern times than the Browns of California. A member of this old California Irish clan has been in statewide office for most of the past half century; by the end of Jerry Brown’s new term, his third, the family will have inhabited the California chief executive office for a remarkable two full decades since 1958.

Jerry Brown is sworn is as governor today, 28 years after he left the office. The world has changed considerably since the young Jerry Brown was governor and undoubtedly Brown has changed as well over that time. Will Brown govern differently or rely on the old playbook from years ago?

Word is that the new governor plans to deal with a massive budget deficit by proposing deep cuts but also offering the voters an opportunity to continue temporary taxes that are set to expire. Cuts and tax increases are suggested as an immediate solution to the state’s deficit problem but the cuts/taxes mix is old school thinking.

Refashioning a 19th century government to 21st century realities is an opportunity the new governor should not pass up. Governor Arnold Schwarzenegger planned to restructure state government when he was elected but did not follow through. His best opportunity occurred at the beginning of his administration but he did not press that advantage.

So Gov. Jerry Brown has bought into the Working Families Tax Increase. That’s the name that ought to be given to the extension of the 2009 tax increase that Brown is making part of his 2011 budget solution. His problem is that voters have already given it a good look, and said “no.”

In May 2009, then Gov. Schwarzenegger and legislature asked the voters to save a tax increase just passed as part of a February budget deal by extending $8 billion in new taxes to 2013. Republicans demanded a sweetener for putting the tax on the ballot; a complex “rainy day” fund that would limit future state spending.

Although both parties bought off on this ballot measure, Proposition 1A on the May 19, 2009 special election ballot, the voters did not. It lost by 30 points and failed to carry a single county. So now the tax increase expires this June, and that is what Brown wants to restore.

So why call it a Working Families Tax Increase? Look at what it does; the measure increases the state’s car tax from .65 percent of a vehicle’s value to 1.15 percent. It raises the state’s sale tax by one cent, to an average of about nine percent statewide. And it raises each personal income tax bracket by .25 percent. These tax increases are highly regressive; they are not based on ability to pay, especially the sales tax hike, and they fall hardest on working families.

Michael Hiltzik’s recent column dumps cold water on Governor Schwarzenegger’s administration primarily because the Governor properly refused to raise property taxes. The reality is that in the midst of immense challenges, Governor Schwarzenegger achieved good things. One of those was reforming California’s broken workers compensation system. For Hiltzik to say that Arnold’s historic reforms did not go far enough is like saying the San Francisco Giants won the World Series but they could have done better. I have worked with several previous Governors on workers comp reform and none came close to what Schwarzenegger was able to achieve.

Cross-posted at NewGeography.

State Treasurer Bill Lockyer and economist Stephen Levy published a piece in the Los Angeles Times that argues that California doesn’t really have any fundamental problems. In their piece, Lockyer and Levy don their rose-colored glasses and give us the same tired old excuses, twisted logic, and factual inaccuracies.

I’ll begin with the factual inaccuracies:

Lockyer and Levy claim that California is the state with the youngest population. That is just incorrect. The U.S. Census website has a map. California is not even the same color as that used to identify the lowest-aged states.

Originally published in the Los Angeles Times.

As he leaves office, Arnold Schwarzenegger is emphasizing his successes as governor. But it is his failures that need more public attention, because they may represent his greatest and most lasting contribution to California.

To understand this governorship, one must recognize a fundamental dichotomy. On matters in which Schwarzenegger had a healthy amount of control — orders he could execute with a pen, legislation that could pass with a simple majority of the Legislature, even ballot initiatives he could champion and pay for personally — the governor has much to brag about. He can point to landmark climate change legislation, bipartisan appointments made on merit, infrastructure bonds that represent a down payment on the rebuilding of California, workers’ compensation reform and voter-approved political reforms to the redistricting process and primary election rules.

But on fiscal and budgetary matters, Schwarzenegger suffered defeat after defeat. The state’s fiscal record after his seven years — California has the same budget deficit now as in 2003, with a much larger debt — has led commentators across the political spectrum to write him off as a failed governor. That conclusion has a factual basis — and is deeply wrong. And it obscures the most interesting and important lesson of his governorship. Put simply: The sheer number and surpassing scale of Schwarzenegger’s failures to fix the state budget constitute a grand and peculiar success, especially if Californians heed the lessons they provide.