Nothing Brave About Jerry Brown’s Budget Approach in California
E.J. Dionne had an op-ed this week about how “responsibility equals invisibility.” He contrasted the divisiveness of Scott Walker in Wisconsin or John Kasich in Ohio with the more measured approaches of Democratic governors dealing with their budget crises.
There is nothing courageous about an ideological governor hacking away at programs that partisans of his philosophy, including campaign contributors, want eliminated. That’s staying in your comfort zone.
The brave ones are such as Jerry Brown in California, Dan Malloy in Connecticut, Pat Quinn in Illinois, Mark Dayton in Minnesota and Neil Abercrombie in Hawaii. They are declaring that you have to cut programs, even when your own side likes them, and raise taxes, which nobody likes much at all. Rhode Island’s Lincoln Chafee has warned of possible tax increases too.
As a California resident, I have personal experience with one of these Governors. And Jerry Brown may be a lot of things, but I don’t think his performance screams “courageous” thus far.
Dionne is right that Brown has toiled in relative obscurity as he seeks to fill a $25 billion budget gap; that’s largely thanks to an invisible political media. He isn’t using many gimmicks or one-time fixes in his budget, which puts him in better stead than his predecessor. But he isn’t exactly tackling the structural problem of governance in California. The voters got him part of the way there by eliminating the 2/3 requirement for passing a budget. But there’s still a 2/3 requirement for revenue increases, or even to put on a proposed June 2011 ballot an extension for tax hikes already in place. It’s unclear whether Brown will be able to find two Republicans in each house of the Legislature willing to do that.
But Brown has ducked many more fundamental governance issues in the state. He hasn’t gone near a tax structure where people making $47,500 a year pay the same in income taxes as those making $999,999. He won’t approach the third rail of California politics, the artificially low property taxes resulting from Prop 13. He won’t expand the sales tax to cover services, which would allow the rate to be lowered while still gaining more revenue (and becoming more progressive, as higher-end services get used by wealthier people). He’s basically doing the bare minimum possible on revenue generation, and even then he won’t commit to raising them himself, preferring to put them up for a vote of the people.
As for the spending cuts, they will be utterly devastating; California already cut the less necessary stuff in prior years of the crisis. And by and large, Democrats in the legislature are going along with it. In the Schwarzenegger years, you’d have a lot of resistance to very similar cuts, both from the outside and the inside. These days, state Democrats don’t want to cross their own governor, and so they’re basically carrying out his wishes. They tell everyone they don’t feel good about it, but that’s of little solace. Here’s what passed out of the Joint Budget Committee this week and will head to the floor of both chambers:
Lawmakers voted to limit welfare, cap the number of doctor visits for the poor, end the Adult Day Health Care program for the elderly and eliminate redevelopment agencies, among other reductions, to close California’s $26.6 billion deficit […]
“Unfortunately, given the severity of the crisis, … California is going to look a little different by the time we get to the end of the budget season,” said Sen. Mark Leno, D-San Francisco, who was the leading Senate Democrat on the committee. He called the elimination of redevelopment agencies “earth-shaking for many stakeholders.”
Assemblyman Bob Blumenfield, D-Woodland Hills (Los Angeles County), chaired the committee and said that in taking the actions, “I’m so far out of my comfort zone I feel like Charlie Sheen at a rehab clinic.”
The health care cuts are perhaps the worst. Capping Medi-Cal (California’s Medicaid) doctor visits is a literally insane policy. There is an exemption if a doctor certifies more visits as “medically necessary,” but this only ensures that more Medi-Cal patients will have advanced diseases and illnesses near the end of the year before seeking help. I don’t see how that doesn’t increase Medi-Cal spending in the final analysis. In addition, patients will bear the burden of more of the cost of care with higher co-pays. And, patients will likely see reduced access to providers, because their rates will be slashed another 10%.
Anthony Wright of Health Access California, the statewide health care consumer advocacy coalition, said in a statement, “It’s hard to overstate the severity of health cuts in the budget, as they will be felt directly by hundreds of thousands of patients, by the over eight million Californians with Medi-Cal or Healthy Families coverage, and by all of us who want our health system to be there for us when we need it.” He makes the point that, as a result of the cuts
and the lack of maintenance of effort, California will lose hundreds of millions of dollars in federal matching funds for health care.
UPDATE: A slight fix here, the federal matching funds that California will lose because of Medi-Cal cuts come from the standard 50-50 match, not because of a lack of maintenance of effort. California didn’t change eligibility and enrollment requirements in this budget, so the MOE remains the same. The total loss from the 50-50 would be $1.5 billion dollars, and combined with the $1.5 billion in cuts, that means $3 billion less to health care in the state.
If you look at the California Budget Project report of the differences between Governor Brown’s budget and what passed out of conference committee, there are almost none. They mostly rubber-stamped it. Not only that, but the legislature and the governor will raid First 5 money without even giving the people a chance to block that on the ballot, as they did in 2009.
Brown’s plan called for a ballot measure to amend Proposition 10, which voters approved in 1998. It was initially thought that taking Proposition 10 money for Medi-Cal services for children would require voter approval; in fact, lawmakers went to the ballot in 2009 to attempt the same thing, unsuccessfully.
But the new proposal now calls for using First 5 money once in 2011-12 and foregoing Brown’s plan to take money in the future, according to Sherry Novick, executive director of the First 5 Association of California. Novick’s group represents the 58 county commissions whose $950 million in reserves would be tapped. An additional $50 million would come from the state commission.
Lawmakers believe that if they take the money only once, they can do so on a two-thirds vote of the Legislature. Proposition 10, a constitutional amendment, allows lawmakers to amend its provisions so long as the changes “further the act” and are “consistent with its purposes.” Senate President Pro Tem Darrell Steinberg, D-Sacramento, confirmed Thursday that the Legislature is seeking to avoid the ballot on First 5.
By raiding this money, First 5 will have to reduce their own contributions to children’s health care, preschool and child abuse prevention in order to accommodate the taking of $950 million. Prop 63 mental health care funds would get raided as well. The public will only get to weigh in on the mostly regressive extension of tax increases, with the threat that if they fail, $12 billion more in cuts would be coming, mostly to education.
Why does E.J. Dionne consider this brave? Half of the costs in the budget would cut vital services for the most vulnerable people in society. The other half would raise revenue from a lot of those same people, through regressive sales taxes. The rich get a light touch, a trifling amount from sales and vehicle taxes; their property values remain ridiculously low; and corporations would still pay less taxes than before a 2009 law changing the way they pay them in the state (though some of those tax cuts would go away). I could envision worse plans, and surely the state is in a big hole, thanks to years of mismanagement by the Schwarzenegger Administration. But every Democrat in the state is taking a “go along to get along” approach to a budget that will have major deleterious effects on those who can least afford it.
UPDATE: A quick stat:
The general fund portion of the state budget proposed by Gov. Jerry Brown spends $5.05 per $100 of personal income earned statewide. That’s the lowest amount since the 1972-73 budget year, when Ronald Reagan was governor and state spending per $100 of personal income was $5.01.
Needless to say, things are a bit more expensive now than they were in 1972.