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Commentary By Steven Greenhut

The Real Message in Gov. Brown's 'Open Letter'

Economics, Economics Tax & Budget

“After those darned Republicans refused to fall for my tax-raising trap, I haven’t known what to do, so I’m back with another ploy, figuring this silly letter will jump-start the tax-hike discussion again.”

Gov. Jerry Brown recently released “An Open Letter to the People of California,” in which he called for the state’s taxpayers to approve tax-raising initiatives to “fix” the state’s structural budget deficit.

Here are portions of the letter and my interpretation of what Brown really meant to say:

Brown: When I became governor again ... California was facing a $26.6 billion budget deficit. It was the result of years of failing to match spending with tax revenues as budget gimmicks instead of honest budgeting became the norm.

Interpretation: For ages, California legislators have spent far more than they take in. My party, the Democrats, loves nothing more than spending money. No matter how much money taxpayers send us, we will spend it, and more, in good times and in bad ones! I came to power pledging to fix things, but I never had any intention to challenge the status quo. I am fixated on one fix: raising your taxes.


Brown: In January, I proposed a budget that combined deep cuts with a temporary extension of some existing taxes. It was a balanced approach that would have finally closed our budget gap.

Interpretation: In January, I proposed the same kind of kick-the-can-down-the-road budget promoted by my predecessors, which cut little and relied on gimmicks. Why else are we back here, dealing with the same problems we always face?

Brown: I asked the Legislature to enact this plan and to allow you, the people of California, to vote on it. I believed that you had the right to weigh in on this important choice: Should we decently fund our schools or lower our taxes? ... The Republicans refused to provide the four votes needed to put this measure on the ballot. ... Democrats went ahead and enacted massive cuts and the first honest, on-time budget in a decade. But without the tax extensions, it was simply not possible to eliminate the state’s structural deficit.

Interpretation: I believe in the fundamental right to vote on higher taxes but I steadfastly opposed that same fundamental right when Republicans wanted Californians to vote on reforming pensions and other things. I know the on-time budget was bogus. After those darned Republicans refused to fall for my tax-raising trap, I have been stuck. I haven’t known what to do, so I’m back with another ploy to push for the same old plan, figuring this silly letter will jump-start the tax-hike discussion again.

Brown: The good news is that our financial condition is much better than a year ago. We cut the ongoing budget deficit by more than half, reduced the state’s workforce by about 5,500 positions and cut unnecessary expenses like cell phones and state cars. We actually cut state expenses by over $10 billion. Spending is now at levels not seen since the seventies. ... Unfortunately, the deep cuts we made came at a huge cost.

Interpretation: The budget is still a huge mess as long as the economy remains in the doldrums, depressed by my party’s zeal for regulation.

We didn’t really cut very much, and the budget has grown dramatically over the past decade. Things like cell phone cuts were window-dressing that saved only relative pennies. State government continues to hire. That’s why I am here today to “guilt” you into turning over more of your hard-earned cash to the state government, which will allow us to avoid painful cuts to state employees and to those many state retirees living large on $100,000-plus pensions. We talk only about cuts in services to the kids and the poor to help with this guilt strategy.

Brown: The stark truth is that without new tax revenues, we will have no other choice but to make deeper and more damaging cuts to schools, universities, public safety and our courts.

Interpretation: There’s never enough money to satiate these public service agencies and no competitive pressures to force them to spend their money wisely. Actually, we could reform state government by embracing educational choice, outsourcing inmates to private prisons, changing pension systems, cutting salaries and commissions, and other measures, but we don’t want to. Remember, the unions elected me, and I am serving them as faithfully as possible. And I would never try to increase revenues by jump-starting the economy through business-friendly reforms because I view the private sector as a drag on our society.

Brown: That is why I am filing today an initiative with the Attorney General’s Office that would generate nearly $7 billion in dedicated funding to protect education and public safety.

Interpretation: I figure the same voters who elected me would certainly be willing to vote for tax increases.

Brown: My proposal is straightforward and fair. It proposes a temporary tax increase on the wealthy, a modest and temporary increase in the sales tax and guarantees that the new revenues be spent only on education. ... This initiative dedicates funding only to education and public safety – not on other programs that we simply cannot afford. ... I ask you to join with me to get our state back on track.

Interpretation: These increases will be gone in an instant, and I will be back asking for more money. The public safety money means protecting huge compensation packages for union workers, not for actually improving the public’s safety. The schools are substandard, but the teachers’ unions won’t let us get rid of bad teachers or improve schools with market-based reform. We will be taxing the rich more (watch how broadly we define that term!), and more of them will join the exodus out of the state. Of course, when I say millionaires, I don’t mean those many public employees who are retiring on the kind of pensions that only a millionaire could afford.

I ask you to join with me to get the state back on track – of spending without concern for the future.

This piece originally appeared in Orange County Register

This piece originally appeared in Orange County Register