Rosy budget declaration undermines tax hike plan

California’s public schools received a rare bit of good news Tuesday when Gov. Jerry Brown largely exempted them from automatic reductions in state aid, citing improvements in the economy.

However, Brown’s declaration that the economy is getting better and he doesn’t have to squeeze all automatic spending-cut “triggers” also lessened the air of crisis and therefore complicated Brown’s efforts to persuade voters to raise taxes next year.

“The economy of California is recovering,” Brown said as he announced that about half of the $4 billion in questionable new revenue is materializing, adding, “We’re getting wealthier by the day, but it’s slower than we like.”

Brown did decree about $1 billion of trigger cuts in state spending on higher education, social services, health care and criminal justice programs, but only a relatively small reduction in school aid, primarily for school bus service.

The tiered trigger cuts were placed into the budget in June because of uneasiness about the $4 billion in extra revenue that the administration suddenly decided was likely, thus avoiding more immediate reductions of that magnitude.

Among other things, bankers wanted more certainty that the state could repay billions of dollars in short-term cash flow loans.

Last month, the Legislature’s budget analyst, Mac Taylor, projected that very little of the $4 billion would materialize, thus triggering massive spending cuts. That had touched off something of a political and media frenzy, with some school officials voicing fears about having to stop school early next spring to cope.

However, the budget specified that the cuts would be based on the higher of the revenue estimates from Taylor and Brown’s budget boss, Ana Matosantos, so the latter prevailed.

Had Matosantos validated Taylor’s projections, the frenzy would have continued into 2012, but now it will be dampened.

Brown says he will propose a 2012-13 budget in January with “many billions” of dollars in additional spending cuts — he hinted at about $6 billion — but that also assumes voters will approve a $7 billion tax increase in November, with more automatic triggers should the taxes be rejected.

“You can’t provide money you don’t have,” Brown said. “You either cut or you tax. There is no third way.”

If, however, the economy is finally pulling out of recession and personal incomes are increasing — by nearly $100 billion a year, Brown says — would that make passing a tax increase more difficult?

Would voters feel better enough about personal finances to pay more for schools and other public services? Or would they conclude that an improving economy and rising revenues make a tax increase unnecessary?

“I think this is going to be a very difficult campaign,” Brown said.

No kidding.

Dan Walters’ Sacramento Bee columns on state politics are syndicated by the Scripps Howard News Service.

Dan WalterseducationOp EdsOpinion

If you find our journalism valuable and relevant, please consider joining our Examiner membership program.
Find out more at www.sfexaminer.com/join/

Just Posted

Asian American youth report anger, sadness and fear over surge in racist behavior

Survey finds about 80 percent experienced bullying or verbal harassment

Court prevents Trump administration from blocking WeChat pending hearing

Late Saturday night, a federal judge in San Francisco issued a preliminary… Continue reading

San Francisco Symphony, Opera musicians settle contracts

Performers’ salaries modified due to inability to play live

California’s troubled unemployment agency needs immediate overhaul, report says

By Patrick McGreevy Los Angeles Times California’s antiquated unemployment benefits system requires… Continue reading

In Brown Type: New survey finds engagement and trend to progressivism among Asian American voters

The 2016 election and ‘Trump effect’ have fired up the voting bloc

Most Read