Will California "Think Big"?

CA Gov. Jerry Brown stated he had big plans in his State of the State speech on Jan 24. Thanks to temporary tax increases under Prop 30 and spending cuts, the budget is finally balanced. Yet he also called for 'fiscal constraint' - contradictory?

Jerry Roberts and Phil Trounstein lay out Brown's hopes for California - and his legacy in his third term as governor (he served from 1975-1983 following Ronald Reagan).  Brown staked much on Proposition 30 in the November election - a temporary increase in the sales and top tier income tax - and the result is an expected $6 billion increase in revenue, thus ending the structural deficit that resulted when his predecessor, Arnold Schwarzenegger reversed the vehicle license fee increase - creating a $6 billion deficit.

Brown made no bones about his fiscally conservative impulse. “We have promises to keep. And the most important is the one we made to the voters if Proposition 30 passed: that we would guard jealously the money temporarily made available,” he said.

“This means living within our means and not spending what we don’t have. Fiscal discipline is not the enemy of our good intentions but the basis for realizing them.

He may have been directing those words to his fellow Democrats who now control a super-majority in both legislative houses, thus making tax increase possible without the help of Republicans who had even prevented his placing Prop 30 on the ballot as a legislative initiative - he had to raise the funds and place it as a citizens initiative.

Yet while calling for fiscal constraint, he made his plans clear for significant infrastructure improvement. He "sees this moment in California history – where water, rail and the environment pose huge challenges and opportunities (much like the ones his father faced in the 1960s) – as part of an unbroken strand of Golden State history..."

To 'think big':

Robert and Trounstein sum-up by writing that "(t)hese are the kinds of bold projects that link today’s legislators with the grand history of California, Brown was saying. Whether the governor has the skill and clout to lead Sacramento toward his vision of its destiny is uncertain."

However, starting off with a balanced budget - the first one with no gimmicks since his predecessor created a $6 billion structural deficit, is a good way to start.

To listen to an abbreviated or the entire speech, see KQED's "Jerry Brown's State of the State Speech in 7, 15 and 30 Minutes".

Full Story: What Brown Told the Legislature About CA’s Destiny



Irvin Dawid's picture

Balanced Budget=Improved Bond Rating

The credit rating improvement by Standard & Poors from A-minus to A on Jan. 31 reads like a report card for Jerry Brown that must be contrasted with his predecessor's handling of the budget.

Bloomberg News' Michael B. Marois writes:
"S&P dropped California to A+ in February 2009, a year when the state had to issue $2.6 billion of IOUs to pay its bills amid a legislative impasse over how to erase a projected $42 billion shortfall. The following year, the company cut the state to A-."

In history, Schwarzenegger will be know as the governor who reduced the vehicle license fee, creating a structural deficit, while his successor raised taxes to fix his mess - and put the state en route to restoring its credit rating.

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