Governor Brown's Budget - More Taxes, More Government Spending

Tuesday, January 10, 2012

Last week, Governor Brown released his 2012-13 budget - a full five days ahead of schedule.  While I had hoped that the Governor would put forward an honest plan that would help the state continue to make progress in closing its budget shortfall, sadly what we received from the Brown Administration was more of the same.

The Governor announced that our budget deficit has fallen to $9.2 billion.  It is good news that California is finally making progress to get its budget deficit under control.  Despite the Governor's rosy rhetoric, California isn't making nearly enough progress to eliminate the deficit.

Even with a 6 percent increase in General Fund tax revenues from personal income, corporate, and sales taxes, California will still face a significant budget shortfall this year.  Why?  The Legislature and the Governor continue to overspend.  The Governor proposes to grow General Fund spending by a whopping 7 percent next year. 

California cannot afford this.  If spending continues to outpace revenues, we will never make any real progress in getting our budget deficit under control.

I am particularly troubled that the Governor proposes to expand his dangerous public safety realignment scheme.  This will result in more dangerous criminals being dumped on the backs of counties and into our communities, where they are already victimizing us. We will see more inmates serving in already-overcrowded local jails or released into our communities.  No amount of funding or reform can fix realignment. I recommend that AB 109 be repealed and a new plan re-written that insures justice for public safety and solves the prison overcrowding problem.

In the coming months, the Legislature and the Governor must work together to finally get serious about our spending problems.  While we have compassion for those in need, we can no longer afford to be the most generous state for health and welfare programs if we are ever going to get our long-term spending under control.

Last year, Assembly Republicans made classroom spending and funding for local law enforcement an important budget priority.  Unfortunately, Democrats shortchanged these priorities and did so again in the Governor's budget proposal.  We will continue to fight to protect K-12 education and public safety funding.

One of the main reasons why the deficit is shrinking is because the economy grew.  So-called "Big 3" revenue - sales, income and corporate taxes - is projected to grow $4.5 billion this year.  This growth is the result of Republicans standing together last year to defeat the Governor's $58 billion tax increase.  By lowering taxes, we helped to stimulate the economy and bring in new tax revenue.  That's why pro-jobs reforms must continue to be a priority for the Legislature.

But one of the worst things we could do is enact the Governor's proposed $35 billion tax increase on Californians over five years.  The Governor's proposed spending increases show that Californians don't need to pay higher taxes in the first place.  If state government cannot live with a $4.5 billion increase in revenue, then we are in real trouble.

What are most clearly absent from the Governor's budget are the reforms and structural changes required to end California's long-term budget problems. 

It is good news that the Governor is suggesting some performance-based, or zero-based, budgeting but only as applied to two departments.  This will finally force bureaucrats to justify how they spend our tax dollars each year and instill accountability.  But we need to take the next step and embrace performance-based budgeting across state government. I suggest the Budget sub-committees immediately convene and apply performance-based and zero-based budgeting to all agencies. The Legislature should solely focus on the budget and cease producing even more legislation. We don't need more bills, we need a balanced budget.

To truly get California's finances back on track, we must also enact a spending limit and rainy day fund.  If there had been a hard spending cap in place in recent years, California wouldn't be facing this budget mess.  Bipartisan negotiations resulted in the Legislature placing a spending limit before the voters, but Democrats last year punted this measure to the 2014 ballot.  The Governor's tax and spend plan shows a spending limit is needed more than ever before.

The release of the Governor's budget officially kicks off this year's budget debate.  It is just the starting point of many discussions that will take place in the months ahead.  Assembly Republicans will continue to fight for an honest budget that reflects priorities like education and public safety reforms our budget process and rejects new taxes.