California Gov. Jerry Brown Clear to Embark on More Visionary Policy

San Jose Mercury News, by Steven Harmon and Mike Rosenberg –

November 12, 2012:

After casting his ballot near his Oakland home Tuesday morning, Gov. Jerry Brown and his wife, Anne, drove north to a 2,600-acre plot that Brown’s family owns in Colusa County. That’s where his great-grandfather staked out his homestead in the 19th century after traveling by covered wagon from the Midwest.

“I felt good about the election and looked forward to getting out in the fresh air,” he told this newspaper.

That night, the governor’s serenity turned to triumph when his tax initiative, Proposition 30, passed by an 8-point margin that no one thought possible just days before.

The new revenue meant that for the first time in almost a decade and a half, the state had truly balanced its budget. And for the first time in more than 120 years, Democrats on Tuesday captured two-thirds of both houses of the Legislature, freeing the Democratic governor to embark on a more visionary policy path that may determine his ultimate legacy.

“I’m very optimistic,” Brown said. “We have quite a big agenda facing us.”

It includes getting high-speed rail construction off the ground and building a massive water tunnel project in the Central Valley, while pushing for regulatory and education reform. He also is considering tax reform to veer the state away from relying so heavily on income taxes, which has made California so vulnerable to the fluctuations of the market.

With $6 billion annually from the new taxes imposed by Proposition 30, Brown said, the budget should stay balanced for years to come. He has pledged that any surplus money not needed to fund existing programs will be used to pay down the state’s $34 billion “wall of debt” racked up over the past decade.

While Sacramento leaders balanced budgets on paper through much of that period, it never eliminated the structural deficit caused by massive borrowing and expanded state spending dating back to the Gov. Gray Davis years. Brown’s predecessor, Gov. Arnold Schwarzenegger, also was unable to solve that crucial, underlying problem.

“Now we can begin to reinvest in education … and achieve and maintain a balanced budget, a goal that has plagued our state for more than a decade,” said Finance Director Ana Matosantos, who was also Schwarzenegger’s last finance guru.

“There’s a chance for the governor, working with the Legislature, to create some very fundamental changes in government,” said Darry Sragow, a Democratic political consultant. “I think he has an extraordinary opportunity to articulate a vision for what California government should look like and what it ought to do.”

Still, Brown, who is nearly halfway through his third term after serving two terms as governor in the 1970s and early ’80s, is cautioning people from “over-reading” voters’ intentions.

At a postelection news conference, he warned that a two-thirds majority doesn’t give Democrats license to abuse their newfound ability to raise taxes without any Republican votes. Vowing to stick to his pledge to never raise taxes without going to the public for a vote, the 74-year-old Brown said, “When I was doing Zen meditation in Japan back in the late ’80s, before going to bed I’d say with other meditators, ‘Desires are endless, I vow to cut them down.'”

Senate President Pro Tem Darrell Steinberg, D-Sacramento, and Assembly Speaker John Perez, D-Los Angeles, both said they would abide by Brown’s pledge, but that show of solidarity could be hard to hold once constituent groups — advocates for social services, in particular — bear down on them with pent-up demands after years of hard, painful cuts.

“I don’t see legislators getting out of line in the first year, but in year two we’ll see where things are when we still have services at funding levels of six to eight years ago,” said Ben Tulchin, a Democratic strategist.

With Democrats in full control, he said, “I have a hard time believing advocates will sit there quietly.”

And then there are the skeptical voices of financial experts, warning that the budget problems are far from solved.

Mike Genest, a finance director in the Schwarzenegger administration, cautioned that Brown’s budget estimates in future years may be too rosy, so “it wouldn’t take very much to throw it out of whack.” For instance, he said, the administration forecasts revenue to surge 11 percent in 2014 — twice the average rate of growth. And, Genest added, long-term costs — pensions, Medi-Cal and retiree health care — are expected to grow much faster than revenues.

But Deputy Legislative Analyst Jason Sisney said his office in May forecast “multibillion-dollar operating surpluses” in a few years if the economic recovery continues and the state can keep spending down. An updated projection is expected later this month.

Brown also has plenty of land mines to maneuver around in policy areas.

Roiling water politics have taken down the best-intended politicians. And changing regulatory laws will pit him against his own party and constituents who are fearful of setbacks in environmental, health and worker protections. Brown, too, will have to approach school reforms with extreme caution, given how critical the teachers union, the California Teachers Association, is to his successes.

When asked how he would contend with an emboldened Legislature, Brown evoked the story of Joseph in the book of Genesis, where the imprisoned slave predicted to the Pharaoh there would be seven years of plenty and seven years of famine, so that he should save when there’s plenty.

“If you look back, we’ve had periods where money flows in and periods when there’s not enough money,” Brown said. “We need the prudence of Joseph going forward over the next seven years, and I intend to make sure that’s the story that we look to for our guidance.”

Source: John & Rusty Report via Choice Admin