Last week, Gov. Jerry Brown released his proposed 2018-19 state budget. But few citizens even pay attention to public finance issues except in the most general sense. For example, we hear from media either that the budget is balanced or that we’re running a huge deficit and the world will soon end.
If people tune out news about the budget, you can’t blame them. The whole process is a bit of a choreographed Kabuki dance where every Sacramento player has a role. First, the governor proposes a budget in January, then there is the infamous “May Revision,” and that leads up — hopefully — to the passage of the final budget by the constitutional deadline in June.
Part of the January dance when the initial plan is released is the reaction from constitutional officers, legislators and interest groups that customarily supply some sort of quote to media outlets. It’s a dog and pony show, but it does help in staking out turf between now and the June 30 deadline.
Not surprisingly, the comments from Democratic legislators and constitutional officers regarding the proposed budget were positive given that the general fund budget has grown to $132 billion — a staggering 44 percent since Gov. Brown was elected in 2010. Still, most of the voices from the left called for even more spending. For example, State Treasurer John Chiang stated “I would continue to urge him and lawmakers to continue to invest more heavily in three bedrock areas that are critical to the long term prosperity of this state: higher education, affordable housing and early childhood education.”
Republicans, on the other hand, want more accountability and would prefer that some of this year’s surplus be returned to taxpayers. Fiscal watchdogs, such as Howard Jarvis Taxpayers Association, expressed concern with the explosive growth in Medi-Cal spending as well as the billions in unfunded pension liabilities.
Two of the best responses to the governor’s proposed budget stand out for very different reasons. The first is from Sen. John Moorlach, R-Costa Mesa, the California Legislature’s only CPA, who has been laser-focused on the staggering amount of public debt in California even when we have balanced budgets. His reaction was a distillation of the true state of California’s fiscal condition: “Gov. Brown admits that ‘the last five budgets have significantly increased spending,’ and this budget proposal is no different. Coming in at just under $300 billion dollars of total spending, debt and poverty remain at all-time highs. Even worse, our balance sheet is massively short and unfunded liabilities are in the hundreds of billions of dollars. Our underfunded pension systems will get minimum payments of $6.2 billion for CalPERS and $3.1 billion for CalSTRS. These costs are directly related to policies Jerry Brown embraced 40 years ago during his first time as governor. While he’s sensitive to a possible economic slowdown and should be lauded for increasing our rainy day funds, he has been a spendthrift in Sacramento.”
The second-best reaction to the governor’s proposed budget is from Sen. Andy Vidak, R-Hanford, who simply acknowledged that the proposed budget is just that — proposed. We won’t know the true state of fiscal affairs until the debate over the final budget in June concludes. However, the way he stated this fact garners extra points for style: “Semper in excretia sumus solim profundum variat.” This Latin phrase translates as, “We’re always in the manure; only the depth varies.”
For California’s beleaguered taxpayers, Sens. Moorlach and Vidak bring clarity and truth to California’s fiscal dysfunction.
Jon Coupal is the president of the Howard Jarvis Taxpayers Association.