California has a balanced budget. Did Gov. Jerry Brown win or lose?
California Gov. Jerry Brown expended some political capital in his bid to close the state's budget deficit with a mix of cuts and higher tax revenue. He didn't get such a deal, but as of Tuesday night the state does have a budget.
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However, Mark Zandi, chief economist at Moody’s Analytics, offers a more upbeat view. “Some of the headwinds that caused us to slow are turning into tail winds,” the Associated Press quotes him as saying.Skip to next paragraph
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Whichever way the economic winds blow, so goes Brown, analysts say.
“The economy will ultimately determine whether Brown is a winner. If revenues increase as much as the Democrats hope, all will be forgiven,” says Stern. “If not, the cuts will be severe and hurt the Democrats’ constituents much worse than the Republicans’.”
A more generous assessment of Brown’s standing comes from Barbara O’Connor, director emeritus of the Institute for Study of Politics and Media at California State University, Sacramento, who says Brown did as well as can be expected under the circumstances and will be applauded.
“I think it definitely helps Brown,” says Ms. O’Connor. “He didn’t allow the end run around his principles and set a finite time for when automatic cuts will be triggered … so he avoided the scenario of defaulting or issuing IOUs to state workers as has happened in past budget fiascoes here.”
Others say that for now, at least, everyone has come out a winner.
“In the short run, it’s a political victory for all sides of the political community,” says Claremont McKenna’s Professor Pitney. “Republicans can claim credit for standing firm against tax increases, Democrats can tell the public-employee unions that they blocked deeper cuts and prevented fundamental changes in the pension system. Governor Brown can say that he saved the state from its usual summertime budget impasse.”
But in the long run, say Pitney and the others, the outlook is less clear.
California Republicans are issuing statements in support of their own strategy to not give in to taxes.
“Republicans listened to the voters and stayed true to the only special interest we represent – California's taxpayers,” said Assembly Republican leader Connie Conway in a statement. “Despite every effort by Governor Brown, legislative Democrats, public employee unions, and other Sacramento special interests to pressure us to raise taxes by $58 billion, we honored the commitment we made to the people of California to stay out of their wallets.”
But some analysts say Republicans missed an opportunity for reform by being recalcitrant. Brown has been negotiating with them for months for just four votes – two in the Assembly and two in the Senate – needed to place a tax-extension vote before the public, one of his key campaign promises. If the public approved, it would have kept in place a temporary hike in the sales tax of 1 percentage point and a 0.5 percentage point increase in vehicle license fees.
“The Republicans wasted a huge opportunity to get pension reform because they wouldn’t give the four votes Jerry needed,” says O’Connor. “They could have gotten more reforms, [but] they didn’t play and weren’t at the table. And when you’re not at the table, you can’t define what it looks like, or criticize the results.”