Gov. Jerry Brown’s State of the State address yesterday, his last of 16, was rather melancholy and underwhelming. Some aspects of the state seem in great shape, such as low unemployment.
But when I look around the state I see something I have never seen before since my family immigrated here from Holland in 1960: a vast homeless population for which there seems no solution. Even the deep recessions of 1974, 1980-81 and 2008-9 never produced that.
Brown has to bear much of the blame, beginning when he first entered the governor’s office in 1975. In that year, according to data from the California Association of Realtors, the median home price in California was $41,600. That was 15 percent above the national median of $35,300.
That small premium certainly was worth it given not just the incredible weather we still enjoy, but great K-12 schools, from which I graduated in 1973; a low-cost state university system, from which I earned my accounting degree at Cal State Long Beach in 1977; and an interstate highway system the world envied.
Contrast that with a median home price in the United States of $207,000 today, according to Zillow, but $504,000 in California – 2.4 times as much. The state’s schools now rank among the worst in the nation. Its roads shatter shock absorbers faster than in any other state, according to TRIP, a transportation research group.
In 1975, Brown insisted, “There is no free lunch…. This is an era of limits and we all had better get used to it…. Small is beautiful.” The latter was a phrase made popular by the 1973 book “Small is Beautiful: Economics as If People Mattered,” by economist E.F. Schumacher and promoted among environmentalists and hippies.
Well, certainly we need to watch spending and balance budgets. But California’s population of 24.5 million in 1975 has soared to 39.4 million today – a 61 percent increase. There was no “era of limits.”
Then, after the great building programs during the 1959-1967 governorship of Pat Brown, Jerry’s father, and Ronald Reagan’s governorship, 1967-75, priorities and power shifted – to the detriment of the everyday people of the state and to the benefit of the political class and environmental activists.
Brown’s flippant, “small is beautiful” attitude also resulted in the cancellation of hundreds of road and highway projects meant to deal with a growing statewide population. There were opportunities to ease the congestion, but his inaction since has led to a state paralyzed by a failing infrastructure. Taxpayers are now assuming the costs of his folly starting 43 years ago as they are taxed over $5 billion a year through gas purchases and vehicle license fee increases. In today’s speech, he boasted about the taxing and spending, and vowed to oppose any repeal attempts.
Also in those years, Brown sharply shifted the state’s political power from its balance among many factions – industry, finance, unions, the public sector – to the public-employee unions. Some collective bargaining rights had been given to city and county unions in 1968 with the Meyers-Milias-Brown Act, signed by Reagan.
But Brown signed the Educational Employment Relations Act of 1976, which gave collective bargaining rights to teachers, turning the California Teachers Association into the most powerful force in the state. In 1977, he signed the Dills Act, which “<href=”#.WmkR066nGUk”>formalized collective bargaining rights for state employees.” And in 1979, he signed the Higher Education Employer-Employee Relations Act, which advanced collective bargaining for University of California and Cal State employees.
These new powers given to public-employee unions meant they sat on both sides of the bargaining table: on one side, representing labor; and on the other side, union-friendly politicians put in office by union campaign contributions. Union power has been busting budgets ever since.
The worst way the unions abused their new powers was to get the Legislature to pass pension spiking in 1999-2000, under Gov. Gray Davis, who earlier had been Brown’s chief of staff. For example, SB 400 of 1999 spiked pensions by 50 percent.
Yesterday the governor thumped his pride in minimal pension reforms. I was hoping to hear something about attempting one more college try to address our failing pension systems in a substantial way. I was hoping to hear more about additional reforms to PEPRA, the California Rule and cost of living adjustments as he has intimated through recent amicus briefs to the Supreme Court.
Instead, we’re left with Brown’s new budget proposal for next year, where he includes $9.3 billion to pay to keep CalPERS and CalSTRS solvent. And that’s just a start of future payments that will chew up the state budget, as similar pension spiking chews up city budgets and grinds their services to a halt. Expect to hear more cities utter the “B” word soon.
Brown persists in wasting billions on the bullet train that just this last week has been shown, again, to be dramatically over budget. The great train boondoggle also just sparked a bipartisan request in the Senate for a new audit. And he invoked the Bay Bridge and its $6 billion cost, which should only have cost $1 billion, by stating “budget overruns happen.” That may have sounded cute, but it was not funny.
The California Environmental Quality Act was passed in 1970 under Reagan with the expectation that narrow environmental review would be limited to major private projects. It has grown into a beast that prevents hardly any construction at all.
During these past seven years as governor, Brown has expended almost no political capital to reform what has become an immense regulatory burden on constructing new homes. Exceptions have been, not to ease the construction of housing for the middle class, the poor and the homeless, but to build the new NFL stadium in Los Angeles and Sacramento’s new arena for the Kings basketball team – playgrounds for millionaires.
Kerry Jackson of the Pacific Research Institute wrote January 14 in the Los Angeles Times, “By some estimates, California energy costs are as much as 50 percent higher than the national average.” All that “green” energy – duplicative power and transmissions for solar and wind for when the sun doesn’t shine and the wind doesn’t blow – aren’t free.
In the meantime, our state burns and the powers that be would rather you pay more in food, transportation and housing costs for their vanity projects, whether it means paying climate taxes or funding out-of-control costs for a train that is stuck on the tracks.
Jerry preached electrifying our cars and bragged about cap-and-trade. But the fires caused by electric power lines and transformers wiped out all of his greenhouse gas reductions. He expressed a realization and offered up the formation of a fire advisory committee. This is scores of lives too late. He should have offered up cap-and-trade revenues to focus on mitigating the causes of wild fires and mudslides.
Brown recalled that, when he again sat in the governor’s chair in 2011, our state was branded with such epithets as “Coast of Dystopia” and “the Ungovernable State.” And he touted the state’s economic comeback, with low employment, 2.8 million jobs created and record profits, stock values and revenues for the state treasury.
But surely he knows the main cause of the state’s prosperity is the national economic boom, which has intensified under President Trump, who enacted the tax cuts Brown and state Democrats, especially House Minority Leader Nancy Pelosi, have criticized. In the 2016 election, by 4 million votes California voters preferred Hillary Clinton, whose planks included massive tax increases that by now would have sparked the Great Recession II.
The sad thing is Brown’s missed chance may be the last opportunity California has to righten its fiscal Titanic. His mastery of the budget, immense institutional knowledge, family heritage and well-honed political skills could have been used to enact real reforms. All that will be gone in a little over 11 months.
Under the failed governorships of Gray Davis and Arnold Schwarzenegger, each signed a budget spiking spending 15 percent for just one year (fiscal 1999-00 and 2005-06), leading to $20 billion-plus deficits in recessions. That showed just how powerful the forces of overspending are – even before pensions become a part of the picture. The Democratic frontrunners, Gavin Newsom of San Francisco and Antonio Villaraigosa of Los Angeles, both ran their cities into the ground financially, as new studies are showing. So the future will be bleak.
As the governor takes a victory tour of the state these next 11 months, the cheers he heard today in the Capitol will fade as the realization sets in of the fiscal disaster barreling at us as fast as a Japanese high-speed train.
Sen. John Moorlach, R-Costa Mesa, represents the 37th District in the California Senate.