The budget that California Governor Jerry Brown unveiled yesterday is a masterpiece in nonchalance and non-responsiveness in the face of crisis — and worse, it includes a bold signal that California, already one of the most anti-business states in the union, will be doing even more to drive business owners and the jobs they create elsewhere.
First the numbers: Brown headlined his announcement with news that he would cut 3,000 state government jobs. That sounds great, but the state has 226,931 employees (as of November), so he’s paring the headcount by just 1.3 percent. That’s like a small business with 10 employees laying off one employee’s arm in response to a severe recession and continuing losses.
At least Brown is proposing cuts, no matter how meager. At the start of the recession, between 2008 and 2009, when the state lost 759,000 private sector jobs, Governor Arnold Schwarzenegger actually added 3,600 employees to the state payroll. But Brown’s cuts are all show and very little substance. The average state employee makes over $81,000 a year, so Brown’s proposed cuts would trim just $240 million from the state budget — compared to the $9.2 billion deficit Brown optimistically predicts.
The governor also proposes increasing spending by seven to nine percent, depending on who’s crunching the numbers. He wants to pay for this through a new tax on the “wealthy,” which he defines as anyone making more than $250,000 a year. The folks in that income bracket saw their income drop 8 percent during the recession, but that’s not keeping Brown from wanting to hike their taxes.
People earning over $250,000 a year are California’s major job generators (except for the many public employees in that pay bracket, who number 200 in Los Angeles County alone), and Brown’s new tax on the wealthy will likely drive more wealthy people and their companies out of state. That’s bad for a state that lost over five companies a week to other states last year, but Brown’s budget has even more pain in store for business.
Brown is calling for the creation of the Business and Consumer Services Agency, a new mega-agency that apparently will “service” businesses in the way male farm animals “service” female ones. The agency will combine habitually anti-business departments handling consumer affairs, “fair” employment and various business licensing and inspection functions, and into this fetid anti-business environment drop “the newly restructured Department of Business Oversight.”
Restructured from what? The department doesn’t currently exist, so it appears that Brown is creating an entirely new arm of government, surrounding it with anti-business zealots and charging it with increasing the amount of oversight of California businesses that are already suffering from too much oversight.
Meanwhile, Brown proposes preserving the nation’s biggest boondoggle, California’s High-Speed Rail Authority, maintaining all the state’s quixotic efforts to single-handedly save the world from global warming and making only minor surface scratches to state employee retirement and health benefits instead of the deep cuts that are needed.
In reality, though, the governor’s proposed budget means virtually nothing. Even as Brown was announcing it, a judge ruled unconstitutional the health care cuts the governor had proposed in his budget last year. Then the Democratic Senate leader lined up against it, pledging to fight proposed cuts to social services. And of course, the state employee unions and their armies of lawyers and lobbyists are busy today planning their campaigns to force Brown into more spending and more taxes — which is sort of like forcing Brer Rabbit into the briar patch, where he’s right at home.
Laer Pearce, a veteran of three decades of California public affairs, is completing a book on California’s impending collapse, “Crazifornia: Tales from the Tarnished State.”