We must save the surplus
If Jerry Brown’s impending exit following a cumulative decade and a half as governor has legislators feeling sentimental, they’re not showing it by deferring to his relatively stingy valedictory budget. Citing a substantial surplus, the state’s housing crisis and a host of other needs, lawmakers are pushing to spend billions of dollars more. The governor’s tightfisted approach has become familiar by now — and no doubt tiresome to some of his fellow Democrats in Sacramento. But given the vicissitudes of state finances and the inevitability of an economic downturn, Brown’s restraint remains for the most part right.
Lawmakers began joint hearings Wednesday to reconcile state Senate and Assembly plans that would spend $2.9 billion and $4 billion more, respectively, than the revised budget Brown presented last month. Lawmakers envision additional expenses for such worthy purposes as subsidized housing and homeless services, health coverage, higher education, child care, prison diversion and re-entry, and fire protection. Among the major differences between the chambers, the Senate would add more than half a billion dollars to welfare benefits, while the Assembly would devote more to housing, Medi-Cal and child care.
The legislative wish lists rely partly on rosier revenue projections: The nonpartisan Legislative Analyst’s Office expects $2.6 billion more in revenue than the administration does — a discrepancy that underscores the inherent uncertainty of state finances, which rely heavily on volatile income taxes, particularly on the wealthy. Given that assumption, the LAO offers the not entirely reassuring opinion that the legislative plans “likely could weather a mild recession.” More alarmingly, though the projected surplus is a one-time event, about half the Assembly’s additions and two-thirds of the Senate’s are recurring expenses, some of which are likely to grow dramatically in subsequent years.
Brown’s $199 billion budget devotes much of the expected $8.9 billion surplus to the state’s reserves but includes judicious onetime expenditures for deferred university and courthouse maintenance, homeless services, mental health programs and fire prevention. Legislative proposals to further boost fire preparedness and address the housing crisis deserve consideration, but major new or expanded services necessitating ongoing spending should be regarded with suspicion. The governor has been in office long enough to have both bequeathed and inherited deficits, and his determination to break that cycle should prevail.