Capitol Journal

Brown's budget is a skinny, homely thing, but it's got brains

The new California budget is vintage Gov. Jerry Brown and the main reason he was reelected

Gov. Jerry Brown's new budget proposal is really boring. It's bare-bones — for a Democrat — and hardly bold. But mostly it's smart.

It's a brake on what otherwise could be a return to runaway spending in Sacramento.

It's vintage Brown and the main reason he has been reelected to a record fourth term.

OK, it's not perfect.

Preferably, he would have taken an ambitious step toward tax reform, broadening the revenue base to make it less volatile — less vulnerable to the inevitable up-and-down cycle of the economy. The revenue stream needs to be stabilized, principally by extending the sales tax to services while lowering the rate.

Brown did give a welcoming nod to new state Sen. Robert M. Hertzberg's plan to sponsor legislation expanding the sales tax to services, which account for 80% of California's economy.

"Look, I think Mr. Hertzberg's going to come up with some great ideas," the governor told inquiring reporters Friday after unveiling his proposed $165-billion state budget for the next fiscal year. "And I think people ought to listen to them and see where they go.

"But I'll tell you this: Taxing new people is always difficult. So if you tell people their Pilates class now takes an 8.5% sales tax, they may not be as yoga-happy as they were before."

"I loved that," said Hertzberg, a Van Nuys Democrat. But under his concept, the Pilates class probably wouldn't be taxed anyway.

"Brown's a smart guy," Hertzberg continued. "He gets it. It's politically difficult. But the status quo is unacceptable and doesn't work. It's not the future. I was very encouraged."

Another budget flaw: Brown didn't cough up money to restore 10% cuts in Medi-Cal provider fees that already were the lowest in the nation when they were chopped during the recession. Consequently, many doctors are refusing to serve Medi-Cal patients just as their ranks are ballooning because of Obamacare.

And although Brown's budget document asserted that the amount of deferred maintenance on state infrastructure "is staggering," he offered no plan to address the $59-billion backlog in road and bridge repairs.

A reporter asked whether he had a specific proposal. "No," Brown replied, "other than I'm identifying the problem."

Well, thank you for that, governor. Anyone who drives already knows the problem.

Brown said he had people searching for ways to generate more revenue for highway repairs.

But it's hard for many Californians to reconcile Brown's prudence on most spending with his obsessive pursuit of a bullet train when he hasn't lined up nearly enough money to build the entire $68-billion project.

Oh, well. Give Brown this: He wasn't biting on most liberal spending ideas — mainly expanding programs for the poor — not because they wouldn't be good things to do, but because he has seen this movie before.

When he began his third term four years ago, after a 28-year absence from the governor's office, state government was running a $26-billion deficit because of previous exorbitant spending exacerbated by the recession.

"Now we have a carefully balanced budget, more precarious than I'd like, but it's balanced," Brown told reporters. "We can keep it that way, but it will require self-discipline and real prudence….

"It's not a time for exuberant overkill on our budget spending."

The governor talked about upcoming negotiations with unions over how best to cover an escalating $72-billion unfunded liability for state retiree healthcare. But his comments could have referred to many state programs: "If we don't rein things in, then down the road there will be drastic cuts just like there were over the last 10 years."

Brown repeatedly went on like this: "There's only so much money here. It's easy to say, 'Let's do that' and 'Let's do that' …. That's an inevitable pressure for more taxes, and I don't know that the people are going to vote for them….

"There's always someone in need, and, in fact, there are millions of someones in need, and we're doing quite a lot, and more than some states." Actually, more than most.

Brown said that about a third of his proposed $113-billion general fund already is targeted at poor people.

And he offered reporters a crash course in political reality.

"We're not going to adopt the socialist system with Leninism," he said. "France and Germany, they're all in retreat…. The modern economy is based on individual reward, with most of the money moving toward the top. That's the system. And we try to mitigate that. But I would say the country is moving more to the right."

As for the University of California, Brown was being philosophical as well as fiscally prudent when he essentially stiffed UC President Janet Napolitano and the regents, who have threatened to raise tuition again unless the state chips in substantially more money.

Brown re-offered only last year's deal: a 4% increase, or about $120 million, if the university keeps tuition flat. UC previously said that wasn't enough. "The $120 million is not chump change," the governor insisted.

And he threw in a new condition: No additional out-of-state students, who pay triple tuition, crowding out California kids. UC was "created by the people of California … for the citizens of the state," he declared.

Brown wants to negotiate with Napolitano over university cost-cutting, which could include professors spending more time teaching and less researching.

In the state Capitol, the political professor is Jerry Brown.

george.skelton@latimes.com

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