Jerry Brown’s game of chicken

SACRAMENTO – We’re about to witness a new twist on Sacramento’s annual high-stakes budget game. Many Capitol observers believe that incoming Gov. Jerry Brown and his fellow Democrats, who no longer need GOP budget support thanks to the Nov. 2 passage of Proposition 25, which allows budget approval with a simple majority rather than a supermajority, are looking to enact a balanced budget that includes deep cuts to public services.

Brown then, as the prediction goes, will take to voters a slate of initiatives to raise various taxes. The new governor, who already has begun setting the stage for tough choices given the state’s enduring $25 billion-plus 18-month deficit, will be saying to voters, “You better pony up additional billions of dollars in taxes or watch public services get slashed and burned.”

This is a “doomsday strategy,” says Sacramento Bee columnist Dan Walters, who views it as a risky plan. What happens, he asks, if voters – notorious for opposing tax increases with the same vigor for which they oppose program cuts – decide to nix the tax hikes? Will Brown and Co. then make good on their program-cutting threats?

Even if the budget machinations do not proceed as predicted, there’s little doubt the state’s voters eventually will be asked to choose between significant program cuts or significant tax hikes. The governor-elect has said that “kick the can” budget gimmickry can’t work much longer. His series of summits are designed to highlight the need for drastic budget action. It’s only a matter of time before we California voters have to choose among bad choices. Then it’s our fault, you see, and there’s no sense complaining about the outcomes, either way.

It’s a brilliant, albeit cynical, political strategy that just might work. But it is based on the dishonest premise that the current government is cut to the bone. There is a real, third alternative to further cuts or taxes: provide current services more efficiently. I’m not echoing the canard about rooting out “waste, fraud and abuse.” One cannot miraculously root out waste, fraud and abuse, even if it’s easy to find examples of it. Wherever there’s government, there’s misuse of taxpayer dollars. It’s the nature of bureaucracy.

Instead, I’m suggesting we cut deeply into those areas of government that provide little benefit to the public. “The governor needs to add a third (or perhaps fourth) voter option to his false ‘either-or’ choice,” explains Richard Rider, chairman of the San Diego Tax Fighters association. It’s not just less services or more taxes – the issue he’s dodging is how best to deliver desired public services.” As Rider notes, the state needs to embrace competitive bidding and privatization and rein in the salaries and benefits it pays to current public employees.

He’s exactly right. You can’t tell me, for instance, that $200,000 pensions for 50-year-old retired fire chiefs help improve the level of fire services for the public. Even Brown seemed at some level to recognize this. As he said at his UCLA education forum, “There’s a lot of hostility to government. They look at the city of Bell, they pick up the paper and see firefighters getting a $250,000 pension.”

Typical Brown, he says some good things. But I’m still waiting for him to advocate a pension-system overhaul. We need less government, more competition and more services provided by the private sector, which are points Brown will surely never make. He did say that government agencies need to make do with less, but then, as the Contra Costa Times reported, he let loose with one of his lefty tirades that should give insight into where we might be headed in terms of taxes:

“Income redistribution that’s occurred upward from the middle class and below is now at a level comparable to pre-Depression 1920s. So what we are facing is not only a budget deficit. We’re facing a societal crisis, and we will only resolve it as we understand it and we work not only to exercise a discipline, which has been sadly lacking, but also a fairness that enables everybody to feel they have an honest stake in the whole society.”

I’ve seen a massive shift in resources from people in the private sector to those in the public sector, but I don’t think that’s what Brown was talking about.

Don’t expect the new governor elect to go after the billions of dollars the state spends on “luxury” goods such as a pork-laden stem-cell research institute, and water bonds that produce no new water sources, and alternative energy projects and overhead-laden public schools – a point made in a recent article by CalWatchdog reporter Wayne Lusvardi. It’s absurd to assume that state government cannot be fundamentally changed.

Even highly publicized “reformers” miss that boat. Billionaire Nicolas Berggruen recently announced his Think Long Committee, which is the latest rich-guy attempt to reform California by tweaking its budget or political processes. We all know the system is broken, but none of these bipartisan groups ever fix anything because they refuse to confront the public sector unions, the environmental lobby and the other interest groups that block reform and feed off of the current system.

Don’t expect any real reform from the incoming administration. Instead, Brown has chosen a budgetary game of chicken. But, eventually, all games have to end. Even if voters approve higher taxes, it will only be a matter of time before the budget hits the fan once again. Drunks don’t change their ways when you keep pouring drinks.

We can see the writing on the wall from across the globe. Russia is firing more than 100,000 government employees over the next three years. Ireland announced that it is slashing its budget by 20 percent. Ditto for Great Britain. Even Cuba is slashing 1 million state jobs.

If Cuba, the “workers paradise,” will do it, so can California’s retirees’ paradise. It’s only a matter of time.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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