Jerry Brown

The governor glosses over debt and poverty (AP Photo/Rich Pedroncelli)

By Steven Greenhut
Jan. 22, 2014

SACRAMENTO — Gov. Jerry Brown offered a buoyant take on California’s fiscal situation during his State of the State address in the Assembly chambers on Wednesday morning. Amid cheers from Democratic legislators, Brown touted California’s fiscal resurgence and chided commentators who had suggested that he skip this traditional exercise of pomp and circumstance.

“It occurred to me that these critics – who have long recited our state’s decline – perhaps have nothing to say in the face of California’s comeback – except, ‘please, don’t report it,’” the governor said. “Well, I’m going to report it, and what a comeback it is: A million new jobs since 2010, a budgetary surplus in the billions … and a minimum wage rising to $10 an hour.”

Perhaps the governor has spent too much time basking in the glow of some writers who recently have championed the 75 year-old governor — half-seriously, perhaps — as a possible presidential contender. The balanced budgets look better than a sea of red ink, of course, but it doesn’t take much digging to see that the governor has overstated this “comeback.”

“He has done a nice job reducing short-term debt by $10 billion, but long-term debt has increased by two times that amount (in his proposed budget),” said David Crane, a Stanford professor, and well-known Democratic fiscal hawk who had served in the Schwarzenegger administration.

For instance, Brown’s recently released budget doesn’t address $3 billion in additional annual payments needed to pay for the state’s medical-care obligations and avoids at least $3.5 billion in annual contributions needed to keep the state teachers’ retirement system solvent. That obliterates the surplus.

Brown isn’t alone among governors in California’s past and from other states who avoided dealing with these debts, but that hardly is cause for gloating. “Even if accounting rules let you do things, leaders can do the right thing,” Crane added. As a result of punting on these matters, the state is spending far more on pensions and debt service than a few years ago – and far less on infrastructure, education and the courts.

Brown acknowledged some of these problems. “And while we know our revenues will fluctuate up and down, our long-term liabilities are enormous and ever growing,” he said in the speech. But the governor has a history of addressing major problems with rhetorical candor, but then avoiding any equally direct action.

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