California Crisis! How To Spend Budget Surpluses Because Democrats Voted

* The following is an opinion column by R Muse *

All across America where Republicans have complete control of a state there are budget deficits, revenue shortfalls, job losses, education and social services cuts and all because Republicans govern to enrich a few very wealthy families and corporations. Republicans claim if they controlled both houses of Congress and the White House, they would do exactly what the Republican governors in Louisiana, Wisconsin, and Kansas did to “make America great again;” even though those states are in dire economic situations. Conversely, Democrats claim if they controlled Congress and the White House the nation would experience seriously robust growth in jobs and revenue and emerge with budget surpluses to start rebuilding America.

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This column fairly revels in citing the examples of Republican trickle down malfeasance and economic catastrophes due to ignorant conservative voters, but hardly takes the time to cite the success of Democratically-controlled states; at least to show empirically why electing Democrats is a formula for success. It is the kind of success Democrats from coast to coast should be citing ad nauseam to convince voters that they are the fiscally-responsible party and a benefit to voters.

Fortunately for Democrats, they have a prime example in California to demonstrate how sound fiscal oversight and responsible governance grows the economy, creates jobs, increases social services, pays down debt, and builds a massive budget surplus. It is not that California Democrats are perfect; far from it. But their most pressing dilemma during the past couple of budget battles, and the current one, shows it is the kind of dilemma every state would like to have; how best to spend an inordinately robust budget surplus.

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Americans, especially Republican Americans, are wont to criticize California because it is not a Republican disaster like Kansas, Wisconsin, or Louisiana. But it is more likely because under a Democratic governor and Democratic super-majority in the legislature, California is thriving and awash in money. Although there have been a few “minor” differences of opinion between the “tight-fisted” Democratic Governor Jerry Brown and Democrats controlling the legislature, it is the kind of “difference in opinion” that most states and the federal government would lust to be involved in.

As is typical of fiscally-responsible Democrats like President Barack Obama, California’s Governor Jerry Brown is regarded by most of the state’s Democrats as “tight fisted when it comes to the budget.” During the last “budget battle” between the governor and Democrats, the legislature started pushing the governor a little harder to relax his grip on surplus money because the state’s coffers were “overflowing with billions of dollars in extra cash” after eliminating the Republican-created debt and building a rainy-day fund. This year, the same scenario exists only there are even more billions of “surplus cash” in the budget than the rosiest economic predictions.

The current budget battle is underway, and it is presenting the “same real problem as last year” when the state’s fiscal analysts found $3.1 billion more in surplus than Governor Brown estimated; this year the surplus is substantially more. The dilemma for Democrats in control of bother chambers drafting a budget is that they want to spend more than the record $167 billion proposed by Brown. The Governor’s budget drastically increases spending on education, healthcare and social services, but Democrats want more spent on childcare and programs for the poor. They claim with an additional $3.7 billion in surplus there should be no issue and it is likely not going to be much of an issue.

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During last year’s “budget battle,” state Senator Mark Leno (D-SF) who heads up the budget committee remarked that since the debate is over less than one percent of the total proposal involving only $500 million up to a billion dollars in discretionary spending, there is not going to be much of a fight with the governor. Leno said,

It’s not a big battle, but there will be a hearty debate. With a recovering economy we are now in a much more stable fiscal footing, but the damage still remains. We have a long ways to go to rebuild to where we were before.”

Since Brown and Democrats took control and started repairing the damage from 8 years of Republicans’ mounting debts and deficits, the biggest contention is how much more money to add to the rainy-day fund over and above the governor’s initial proposals. To be fair, Senate Democrats have the advantage of the knowing what the higher revenue numbers are than the governor did or he likely would have accounted for it in his proposed budget.

Whatever level of battle there will be, according to the executive director of the Edmund G. “Pat” Brown Institute for Public Affairs at the California state University at Los Angeles, Raphael Sonenshein, the governor has the upper hand. Democrats are not sufficiently unified to muster a two-thirds vote to override what might be a gubernatorial veto. Mr. Sonenshein said,

The legislature is pushing harder because of the availability of money. While I think the governor is going to give in on a number of things, he still will have the argument to make that you don’t want to kill the goose that laid the golden egg.”

That “golden egg” reference is to gargantuan “surges” in revenue from capital gains earned in Silicon Valley and voter-approved tax hikes on the rich and corporations. That surge poured an additional $6.7 billion more into the treasury last year than Brown expected when he proposed his budget and the numbers are significantly higher this fiscal year. As Governor Brown typically takes a conservative approach to spending, he wants to save for the next recession and despite what some state Democrats feign, they are on the same “save for a rainy day” page as Governor Brown.

The moral of this screed is not so much about who is running for the presidency, but about down ballot races. Californians were intelligent enough to see what an economic catastrophe Republicans wrought on the state, and the nation, prior to the 2008 general election and rejected them at the polls. The result is that like during the two years that President Obama had a Democratic Congress, the economy recovered, debt decreased, jobs returned at a record pace, and a $26 billion budget deficit turned into record billions in surpluses.