May 16, 2016
Budgeting is where Gov. Jerry Brown makes his money. Willie Sutton had his banks. Brown has budgets, the primary source of his political capital.
The seasoned four-term governor cleans up at budget time — in January when he proposes a state spending plan, in May when he revises it, in June when he signs the legislation.
He loads up on public approval ratings by shouting “no” to the big spenders, mostly from his own Democratic Party. It’s a ritual.
It’s when Brown burnishes his reputation as a prudent skinflint.
Despite California being a deep blue state — and all the national sarcasm about the left coast — voters here lean toward fiscal conservatism, especially if it’s about spending tax money from their own pockets.
Yes, there is that paradox of the money-burning bullet train that Brown inherited and adopted as his legacy. Voters invested nearly $10 billion, but the $64-billion super-project is running about $44 billion short, and there’s no angel in sight. Still, the governor can’t bring himself to cart it to the dump.
So Brown is much less prudent about his personal priorities. It’s with other people’s that he’s stingy. That’s human nature. And it has been good politics for him.
In two recent polls, Brown’s job performance was approved by 56% of voters, which is unusually high for a guy who has been around this long. At roughly the same period in his first tenure as governor — more than five years on the job — his approval was only 38%.
Late-tenure approval ratings for predecessors Arnold Schwarzenegger and Gray Davis were abysmal.
Brown undoubtedly restocked his popularity at Friday’s annual “May revise.” He warned of an inevitable economic crash. And he waved a yellow flag at runaway spenders.
“Like everything else, things don’t last forever,” Brown told reporters, pointing like a professor at big charts depicting roller coaster tax flows. “Right now, the surging tide of revenue is beginning to turn, as it always does.”
It’s down about $2 billion from projections. Still, he proposed a record $173-billion budget.
Brown said he didn’t want to “repeat the errors” of Schwarzenegger and Davis by accelerating spending before the next recession.
“We can’t have any significant new spending and we’ve got to get ready for the downturn,” the governor insisted, calling for more savings. “When you don’t spend today, you’re minimizing the pain later.”
A reporter asked him why he didn’t spend more on child care, a demand of the Legislative Women’s Caucus.
“Child care has been rising in these budgets every year,” he reminded. “It’s a matter of priorities. If you want to do that, then you should [cut] something…. They’re all good. Housing is good. Child care is good. Dental care is good. Everything is good.
“But the question is unless you can convince the taxpayers or get two-thirds of the Legislature and the governor, you don’t have enough revenue. And the revenue means more taxes…. “We have to temper our enthusiasm to the mood, to what people are willing to pay for.”
Four years ago, Brown persuaded voters to tax other people — the richest 2%. He said it was temporary to keep schools afloat until the economy recovered. That tax is supposed to expire at the end of 2018. If it does, Brown said, the state will be short $4 billion by 2020.
So teachers unions are sponsoring a ballot initiative to extend the tax for 12 years. Brown refused to take a stand.
“I’m leaving that to the people,” he said. “I said it was temporary … and I think I’ll leave it there…. I’m prepared to manage without it.”
Housing — for the homeless and the working poor — was an example of a problem that Brown smartly addressed without committing more money.
He embraced a bipartisan proposal by state senators to build $2 billion worth of housing for the mentally ill homeless. The state would issue bonds to be repaid by a “millionaires tax” approved by voters in 2004.
That housing money, however, would come out of other mental health programs.
Senate leader Kevin de León (D-Los Angeles) thought he’d have to bargain for the housing funds during budget negotiations. He was pleasantly surprised when the governor informed him of his approval only half an hour before announcing it.
“We have the money, it’s a serious problem and the Legislature has come up with a thoughtful program,” Brown told reporters. “It makes sense.”
Brown came up with the other housing program — for low-income people — by himself. It sounded almost Republican.
Rather than pouring a lot of money into affordable housing, the Democratic governor proposed cutting red tape. His plan would streamline the permitting process, making development projects quicker and cheaper.
There’d be a bunch of conditions. Projects would need to meet local zoning standards, for one. Being near transit would be a plus.
Local governments will probably scream about losing control, so there’ll be heavy negotiating.
“If you want some assisted housing, you’re going to have to reduce some of the regulatory burdens that are faced by developers,” Brown said.
“We need more [housing] production. That will [increase] the supply and then bring down the [rental] cost. Otherwise, through subsidies — we’re just spending more and more tax dollars and getting very, very little.”
Brown lives off these moments — and the voters’ nods of approval they generate.
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