Gov. Jerry Brown has a hard task ahead of him. He has to balance the budget, and the cornerstone of his plan is tax increases — a quarter-cent increase in the sales tax, and a 1 percent to 3 percent increase in the income tax for people who earn more than $250,000. According to recent polls, Brown’s tax proposal has reasonably healthy support among the California electorate. But along with bringing in more revenue, he must also cut spending to show that he is serious about fiscal responsibility.
And so, Brown asked the Democrats in the state Legislature to craft a budget that includes those very cuts. Among the highlights: slashing welfare-to-work programs, in-home health care services and scholarship money for low-income students.The state Democrats came back with their own markedly different proposal. For the most part, Brown and the state Democrats are on the same page. But the Democrats rejected the governor’s plan to cut as much as $1 billion in social services for the poor.
The Democrats’ plan preserves key services to help single mothers cope with living in the worst economy since 1932, gives the elderly and infirm some measure of dignity in the twilight of their years and enables poor college students to rise out of poverty.
Holding firm on the safety net carries some political risk. California voters have not been inclined to raise their own taxes, especially when the money is going to welfare recipients. And the state Legislature is still negotiating with Brown over his proposed cuts — and may yet cave in over the next few weeks.
Fortunately, the Democratic legislators have agreed with one of Brown’s most politically difficult cuts. Brown’s plan would cut 5 percent from state employee salaries across the board. State employees, and the unions that represent them, are the single most important constituency for the California Democratic Party. If Brown wants to persuade the voters to approve his tax plan, he must convince them that he and his legislative partners are willing to go up against their most important allies.
It is politically risky for the Democrats in the state Legislature to challenge one of their key supporters in the long-term interests of California. But for years, state employees have quietly accrued more and more compensation packages, most in the form of retirement and health benefits. Along with the Proposition 13 property-tax cap, these packages are the single largest contributor to the state’s budget deficit.
Simply cutting salaries is far from a long-term solution. Legislators must ultimately tell the state employees unions that from this point onward, no future employee can expect to get the same pension plans their predecessors did.
Nonetheless, Brown and the state Democrats have taken an important first step. They have informed the unions that everyone has to share the pain. If the voters approve Brown’s proposed tax increases in November, we can all be proud to have played a part in crafting, for the first time in decades, a mature and responsible state budget.