Brown keeps tax hikes on the table

At Gov.-elect Jerry Brown’s briefing to discuss the dismal condition of the state’s budget, now plagued by a $25 billion deficit, the incoming governor explained that “everything should be on the table and everyone should be at the table to talk about it.”

Whenever a California Democrat tells you that everything is on the table when it comes to budget matters, you know the goal is to raise taxes.

Brown’s briefing was billed as a reality check, a chance for state officials and the public to face the ugly truth about the budget. The goal wasn’t to discuss solutions, but to “set a common factual basis” from which we can determine the “full range of solutions,” Brown said. We should all agree on the right numbers, but we shouldn’t be naive about the goals here.

Brown did not in any way push for tax hikes, but the whole presentation was designed to lead the public to believe that every other budget choice is no longer available. The briefing explained that the budget problems are enormous, that services already have been cut to the bone, that the state cannot afford more borrowing and that past budget-balancing gimmicks won’t work this year.

The panel included Democrats Brown, Senate President Pro Tem Darrell Steinberg, Assembly Speaker John Perez, Treasurer Bill Lockyer and Controller John Chiang. The sole Republican was Assembly Minority Leader Connie Conway. The two nonpartisan budget officials were Legislative Analyst Mac Taylor and Finance Director Ana Matosantos. Only Conway challenged the direction the panel was headed, noting that the best way to increase revenue is to get the economy moving and to get more workers on payrolls and thus the tax rolls.

On the good side, the briefing did remind us of the state’s precarious financial position. For instance, Brown’s presentation emphasized that “absent permanent solutions, deficits will persist for years.” Lockyer noted that the state’s debt has increased from $34 billion to $91 billion in eight years.

Brown pointed to massive financial problems that aren’t even part of the general-fund equation, such as the state’s $100 billion to $500 billion unfunded pension liabilities. Brown’s presentation reminded us that it will take several years for a full recovery. In other words, there’s no way for the state to grow its way out of these fiscal problems.

But Brown showed his hand toward the end of his presentation. It included a chart showing that California is the fourth-lowest state in its number of state employees per 10,000 residents. The other chart shows that California is ranked around the bottom in its school pupil-to-staff ratio. The goal of these charts is to show that the government already is lean and shouldn’t be cut, a dubious point at best.

But add this not-so-subtle “we can’t cut any more services” message to the other briefing messages — the state can’t endure more debt, the economy isn’t coming back soon, and the age of gimmicks is over — and it’s not hard to get to the only real “solution” that Brown and company want left on the table: higher taxes. We’re in for a long ride.

Steven Greenhut is editor of www.calwatchdog.com. Write to him at sgreenhut@calwatchdog.com


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