State Watch

A Tale of Two Jerrys

For connected public employees, California remains the land of milk and honey.

By 8.29.12

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Jerry Brown, in his first stint as Governor of California (1975-83), gave public employees the gift that kept on giving: collective bargaining. Now, in his second stint, nearly three decades later, he is facing the consequences of that gift.

Public employee unions as a group, and especially the teachers' unions, have ended up owning the state legislature: virtually all the majority Democrats and even some Republicans. These politicians have come to depend upon contributions from the huge war chest of the California Teachers Association.

From 2000 to 2009, the CTA spent $211 million in contributions and lobbying, two times the Number Two spender, the Service Employees International Union. Add $40 million to that for the two years since, including a hefty contribution to Brown's 2010 campaign.

The Los Angeles Times reports that a year ago, when the state was facing another multibillion dollar deficit, Gov. Brown called a conference with legislative leaders to decide where to cut spending. Significantly, also at the conference table was Joe Nunez, chief lobbyist for the CTA. Threatened cuts to schools were shelved. 

Brown then decided on a swing-for-the-fences strategy. He would put on the 2012 ballot a measure to "temporarily" increase incomes taxes on those who earn more than $250,000 a year and increase the sales tax by one-quarter of one percent. The state's income tax rates are already among the nation's highest, as are its sales tax rates.

Brown's pitch for this measure (Prop. 30 on the ballot) has been that it's "the people's choice." If they vote for it, much of the new revenue will go to schools; if they vote against it, education budgets will be cut and promised new allocations for local law enforcement will not materialize.

Not coincidentally, the CTA has thrown money at promoting a "Yes" vote on the measure. A recent poll released by a University of Southern California unit shows the measure still in positive territory, 54.5 percent to 35.9 percent. That will narrow, but CTA money may put it over.

Californians are already overtaxed and the state is too heavily in debt. In recent years the state has faced annual multibillion dollar deficits, "cured" at the last minute by accounting sleight-of-hand. 

Brown's proposal is expected to yield about $6 billion annually. This will do nothing to stem future deficits, for neither he nor the legislature is willing to tackle the causes of much of the problem: overly generous public employee pensions and health plans.

Last year, Brown proposed a series of pension reform measures and said it was up to the legislative Democrats to respond. Not surprisingly, nothing happened. Brown is no Scott Walker and the Democratic legislature consists mostly of lapdogs dependent upon the largess of public employee unions.

Added to this self-perpetuating gridlock is the discovery that the Parks Department -- and perhaps others -- was sitting on $54 million of "user" fees it had collected while at the same time wringing its hands over budget cuts that threatened to close 70 state parks. These "special funds," as they are called, represent nearly one-third of the annual state budget. The Brown Administration conceded that it has only an "honor system" to keep track of these funds.

The State Office of Finance is now investigating all of these "special funds."

Heads may roll, but more importantly, will Finance's report recommend an air-tight system for accounting for these funds and will the money be put to use to reduce deficits? 

Jerry Brown I unleashed a political and policy monster. It looks as if Jerry Brown II has washed his hands of reform and is standing aside, hoping the voters will give him a temporary budget "fix" while emptying their own pockets more than ever.

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About the Author
Peter Hannaford was closely associated with the late President Reagan for a number of years. He is a member of the board of the Committee on the Present Danger. His latest book is “Presidential Retreats.”