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Governor Brown's Progressive Shock Doctrine Takes Shape

by: Robert Cruickshank

Tue Jan 04, 2011 at 07:00:00 AM PST


As Jerry Brown finishes the first 24 hours of his third term as California governor, we're learning more about his proposed budget solutions - specifically, the austerity he will use to try and shock voters into approving new revenues, and what those new revenues might be. The Sacramento Bee has more:

The broad set of budget cuts that Gov.-elect Jerry Brown will propose in the coming days would touch nearly all Californians, eliminating local redevelopment agencies, shrinking social service benefits, shuttering parks and reducing library hours, according to a source familiar with his budget proposal.

Brown, to be sworn in this morning, wants to slash virtually every state-funded program to help balance California's massive deficit, in many cases resurrecting cuts sought by Gov. Arnold Schwarzenegger but rejected by lawmakers. Brown would restrict Medi-Cal access, divert low-level offenders to county jails and cut deeply into California State University and the University of California.

The Democrat is counting on lawmakers to approve the cuts to encourage voters to also provide revenue. A June ballot measure would extend higher tax rates on income, vehicles and sales set to expire this year, as well as eliminate a new corporate tax benefit. The money from the vehicle and sales tax extensions would be sent to local governments, which would take on some functions the state performs now.

The article goes on to note that Brown will try to get voters to approve moving funds from Prop 10 (the First 5 program, funded by cigarette taxes) and Prop 63 (the mental health surcharge on incomes over $1 million). You might remember that voters once before rejected raids on those funding sources, when Props 1D and 1E went down in flames in the May 2009 special election.

In many ways, Brown's proposals resemble the May 2009 special election closely. His other revenue proposals would be extensions of those existing revenues, just as was proposed in Prop 1A. That initiative failed when progressives balked at the spending cap. Brown hopes that progressives will support these revenues in order to reverse the all-cuts budget, and that other Californians not on the right will support them out of a desire to protect schools, parks, libraries and other vital services.

Similarly, some of Brown's other revenue proposals didn't fare well at the ballot, such as Prop 24, which would have closed the 2008-09 corporate tax loopholes but was rejected by voters in November 2010. And voters didn't seem too interested in saving state parks for a measly $18/year, which most voters could easily afford. Brown is obviously banking on Californians being sick of austerity and, finally seeing that there really are only two options - collapse or new revenues - that they will choose to save California.

To put it mildly, this strategy is pretty fucking risky. It may be the only way to get new revenues approved, but it is going to require a major mobilization of progressive activists to make the case for these revenues - especially to voters who consider themselves progressive but who have bought the right-wing talking points that they're "taxed enough already" and that if they're asked to pay another dime, they'll vote no out of spite. We saw some comments to that effect the last time I discussed Brown's shock doctrine. While the resentment at the way the rich have escaped their burdens is understandable, letting kids and the poor suffer isn't a legitimate response. If these initiatives are clean - i.e. not compromised by some right-wing thing like a spending cap - then progressives should support them. Either we're all in this together, or we're not. And besides, if we want to convince voters to approve new taxes for the rich, we have to show that a statewide electorate will raise taxes at all.

The other interesting story here is Gov. Brown's proposal to eliminate the redevelopment agencies. Getting rid of enterprise zones is a no-brainer; those things have been a costly failure. But the redevelopment agencies aren't as clear-cut a case. Many such agencies are providing some of the most effective and forward-thinking urban planning in the state, much moreso than the relatively status quo-friendly planning departments of most cities. Further, many major urban projects are dependent on redevelopment dollars, such as a convention center expansion in San Diego.

On the other hand, one could make a pretty strong case that funding our schools is more important than enlarging the San Diego convention center so that Comic-Con doesn't move to LA or Anaheim. And Gov. Brown may not need voter approval to abolish the redevelopment agencies and redirect their funding to schools.

Overall, this is a very risky move by Gov. Brown. I'm a bit surprised that he appears to be trying for tax increases and financial solutions that were rejected by voters in 2009 and 2010, and while Californians do need to be shown what will happen if those revenues aren't approved, Brown would also do well to add some new kinds of tax solutions as well - particularly higher taxes on those making $200,000 or more. Either way, progressives are going to have quite a fight on our hands this year, and if we lose, California will be headed into the abyss for some time to come.

Robert Cruickshank :: Governor Brown's Progressive Shock Doctrine Takes Shape
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Risky. (4.00 / 1)
Yeah, it's risky. But 2009 was, in fiscal crisis time, a long time ago. Two years between the Prop 1 series and this upcoming special election and I'm not sure people really believed that things were going to be this bad for this long then.

Let's be honest, too. Progressives were against most, if not all, of the 1s for various political reasons too.


Brown taking a big chance (0.00 / 0)
I agree...this strategy is risky, and in my view downright dumb. Why is he trying to follow in Arnold's footsteps with these propositions that Californians soundly defeated two years ago ? At that time we heard all the dire consequences that would happen if they didn't pass and they still were voted down. The economy in California is only marginally better (very slightly)than it was for the 2009 props , I don't see how they think voters are in any better position financially to afford the higher taxes.
Now if one is talking about moving money around from funds that are flush like was proposed in Prop 1D and 1E in 2009 that I will support like last time. If you want to raise taxes on those making over $1 million or $500,000, go for it. But there are progressives like me who are looking for work and others who are struggling who just are not in a position to pay more in sales tax and vehicle registrations.  

Brown taking a big chance (0.00 / 0)
i agree wholeheartidly w/ psp2-i will not be supporting a continuation of what was done 2 yrs ago.  i opposed the very regressive & across the board tax increases then and absolutely will not support a continuation of them now.  i wish what was being proposed was a tax targeted on the most affluent/wealthy estates, corporate & individual income taxpayers. unfortunately it is not, those groups r NOT paying their fair share and it is time that a political party made them. unfortunately that party is not the Democratic Party so i am no longer a registered Dem.

[ Parent ]
Really? (0.00 / 0)
You aren't in a position to pay an extra $18/year in vehicle registration fees? I find that hard to believe, and yes, I know what it is like to be unemployed or have a very small income in California in recent years.

You can check out any time you like but you can never leave

[ Parent ]
$18/yr. in fees (5.00 / 2)
actually i dont own a car-believe it or not i live in la (valley) and do not own a car.  im totally willing to pay higher income taxes to pay for it.  in fact i dont think its fair that it should be only vehicle owners/vlf payers that have to pay for parks.  also ill just say that i have come to believe that the only or even the biggest problem with the services & programs govt provides in this state is not lack of $$$-that may be a problem in some cases but there is just a very badly run state.  i see it ALL the time with public transit & roads.  weve spent billions in this area in the last generation on public transit & roads & have very little to show for it.

btw id like to say that im not from CA & before i came here i was a Democrat & big believer in govt but living here has certainly made me see things differently.


[ Parent ]
Also, Chappaquiddick! (4.50 / 2)
I love the conversion stories.

[ Parent ]
Original Sin (2.00 / 1)
Unfortunately, many Californians have bought into the right wing dogma that taxes are a sin
I don't mind taxes if they go to worthwhile things
Hopefully, Jerry can convince Californians that taxes aren't evil

On the other hand, I see Arnold appointing Carole Migden to another board.... Will we ever get her off the public payroll ?  


Go bigger (4.00 / 2)
Maybe Brown will get the voters to approve enough cuts and/or tax increases to balance the budget in the short-term, but the fundamental problem, which is the California State Constitution, would still be unaddressed.  Perhaps he has a plan for this and what we are seeing are just the opening moves.  Either way, my humble opinion is that any victories short of a re-write will be temporary, and Cali progressives will be fighting the same fight over and over until the constitution is purged of taxing and spending policies.

Make all demog groups suffer more (3.00 / 1)
First, thanks for the detail and analysis.

The poor always get hit the worst and that does nothing to force higher taxes.

The structural and cultural division between urban and non-urban priorities is what's killing us so the pain needs to be spread out more. A lot more.

The parks and libraries are services that I use at least once a week and that will be the first that I will be impacted by budget woes (assuming I'm not counting the sunk and ongoing cost of private school for 3 special needs kids). That' a good thing but not nearly enough.

The Gov would gain support if he asked for community volunteers to do fraud investigations, business management organization and tuning, service reviews, contract reviews...use transparency and citizen resources to either find ways to do better, faster, cheaper or create support for more taxes.    


Enlarging the San Diego Convention Center? (4.00 / 1)
The freaking thing is a full city block already! It's the size of a small warship and more confusing than any maze. And they want it bigger? Really?

As for Brown's efforts to get the voters to agree to tax increases, I hope he does a better job of selling this idea than other proponents of similar efforts have done in the past. Faux Noise is a big megaphone to overcome.


a procedural question relating to the tactics of this (0.00 / 0)
would said initiative vote on a tax hike be a 50% majority vote or a 66% supermajority vote? i'd be more confident of our chances with the former than the latter.

Simple majority (0.00 / 0)
The May 2009 initiatives also required just a simple majority. The bigger question is whether a simple majority of the legislature can put the proposals on the ballot. It is apparently possible.

You can check out any time you like but you can never leave

[ Parent ]
good (0.00 / 0)
the leg majority requirements will also be key in determining what kind of package can be passed, and thus the likelihood that a decent one likely to pass can be put together. anything that requires DINO and GOP votes in the state leg will be salted with poison pills, like the 2009 dog's breakfast.

if it's 50% because it's a budget emergency (it would be nice to turn that phrase around for a change), and they can put a clean easy to understand funding tax hike, we could win this thing.

as horrible a year as it would be if it failed, i suspect we'd be able to pass it the next year. once you call a bluff, it will be beyond clear that we need the taxes. i think brown will win this brinksmanship, if not in 2011 then assuredly in 2012, when he could say "see, austerity isn't fun if it's shared across the board, innit?."

maddening that it takes this to wake up the middle class two santa idjits, but if that's what it's gonna take, that's what it's gonna take. if brown could figure out how to demand austerity from UC administrators and commission chairs, that would be brilliant theatre as well, although i have no idea if he could demand such things from them in a budget.

campus should be fun this spring, is all i have to say.


[ Parent ]
Redevelopment agencies vs. planning departments (4.00 / 1)
"Many such agencies are providing some of the most effective and forward-thinking urban planning in the state, much moreso than the relatively status quo-friendly planning departments of most cities."

That might be true, but it's not an argument for rival bureaucracies working at cross-purposes.  


It is terminal, or possibly disabling? (0.00 / 0)
California has a situation that barring some other-worldly miracle, is not going to just "fix itself." I think a reality based solution is the way this has to go!

I will make a health care comparison.

When there is universal coverage for "Well Care" and maintenance, being able to go to a doctor in the beginning of an illness, or "condition" means that there is a greater likelihood that things can be handled before the situation has reached the disaster stage. An example would be elevated blood sugar. The patient goes, does the tests, the doctor counsels on the things that will help, will decrease the levels without having to go to a totally radical regimen. On the other hand, no care, little money, so the patient waits and things get worse. Uncomfortable, problematic, but not yet lethal. But it is Type II Diabetes now. The patient still can't go to get proper but now more costly care... And then comes the time when the crises is full blown and the patient is going to lose a limb, or maybe two, and it requires a really radical and very expensive solution, and has become that disabling and possibly terminal condition.

California is at the beginnings of the second stage of its own illness, not yet disabled, and not terminal, but if something is not done, it could get really ugly. So the patient, the "Body Politic" that is in charge of the situation, and has to make some choices. One of them is to work to keep the body healthy, and among other things starving itself while totally ignoring the necessary nutritional needs of the body, the whole body, is not the way to go.

This was my answer in the comments to the Governor Brown article in Monday's Sac Bee:

           

"There is a better way, and it is called raising revenue!

There is no free ride, more than half of the state budget goes for education! It is NOT prisons, NOT social services, EDUCATION!

K-14, which includes the junior college system, in the year 2010- 2011 budget is 39.7 % PLUS 12.6% for higher education, the UC and CSU systems.

Social Services, which would be Senior, Disabled, Medi-Cal, Mental Health, and those services provided so that those on welfare can get an education and get off of aid takes another 29%.

Prisons/jails come in at 9.8%. www.CPB.org has all the information (Cost per prisoner is $45,000.00 on average http://nicic.gov/features/stat...

So, I guess Californians have a choice, we can shut down all the schools, and close all the prisons, and have NO social services, or we can RAISE REVENUE.

And again for this 2010 budget year, personal and sales/use taxes are 78.7% of income to the state, while the corporations all told only paid 11.6% and you can bet on this one, the largest shares of that (%) by income were paid by small corporations, NOT the big ones!" -ContessaSharra

Read more: http://www.sacbee.com/2011/01/...

So what, Californians, do we decide that the best solution is to cut off all the body's limbs and be done with it, those being education, Social Services, and all jails, and then what? Transportation/highways,transit systems...

How comfortable and functioning is the body politic going to be under those conditions? Who really wants to be that body, part of that body?

I recently attended a Seminar by the California Budget Project.

This information was in one of the handouts:

On the issue of long-term reform of the budget process, most (72%) Californians believe that they-not
their leaders-should make reform decisions at the ballot box.

However, Californians' knowledge is far from perfect when it comes to understanding the budget. Only
28 percent correctly identify personal income tax as the area representing most of the revenue. Thirty
percent name the sales tax as the biggest source of revenue when it is actually a distant No. 2.

Asked to name the area that represents the most spending, only 16 percent of residents correctly identify
K-12 education. Half (49%) say the most money goes to prisons and corrections, although this category
is actually in fourth place, behind schools, health and human services, and higher education.

http://www.ppic.org/content/pu...  page five (5)

The initiative process and its ramifications is a whole other thread, but I personally think that if there is to be one, it should have a "resident" requirement, and no one not a resident/voter should be allowed to fund/manipulate the process.

In general, a large part of the public and even the voting public has no clue about all too much, there is an information and education deficit for/by Californians,and the ignorance is costing the people/state big bucks all the way around.

Back to the health analogy, would you want your own body prescribed for by a pharmacist that only knew who only knew 10% about the medications he was giving to you?

I am sure what Gov. Brown is doing is risky, but any old farmer knows some mules need two bricks, one to get concentrated attention from them, and one to maintain attention while explaining what is needed from them.

Californians have a choice and they'd better wise up.

 


Redevelopment sucks (4.67 / 3)
In general, redevelopment agencies are a form of money laundering for local agencies to divert property taxes from revenue that would go to the state to projects that generate local revenues.

They are almost always bad deals from any progressive standard, favoring big box retailers over local retailers, rewarding cronies and political contributors, distorting markets and rewarding a very few inside players.

A convention center is just a magnet used to generate more local hotel taxes, generally in a mind-numbing series of deals that cost the state a fortune in lost revenue, distort local land use.

For every good deal done by a redevelopment agency in California, there are 100 craptastic deals.

Even the 20% of redevelopment agency income that goes to affordable housing generally misses the mark because the housing that is created can only be occupied by a very, very narrow niche of people who make just enough money.


OC Progressive is Gus Ayer, former Fountain Valley Council member.  


Agree 100% (0.00 / 0)
They are, in a large number of cases, the most absurd version of ineffective and corrupt public entities.

[ Parent ]
How to mobilize progressives (3.50 / 2)
I teach at SFSU and this comes from the classroom.

Brown needs to eliminate CalGrants in the upcoming budget. Yes it hurts students. That is the point.

I was talking about the budget to my students and they've heard it all before. They don't take it seriously. They complain about how the protesters last spring disrupted classes.

So I said, They are probably going to eliminate CalGrants.

And one of my nice centrist passive students from a farming county piped up, "They can't do that! Without CalGrants, I can't go to school! If they eliminate CalGrants I will protest and march and do whatever I can!"

Moral: you need to make it hurt in order to communicate the high stakes. People who want from the state need to fight for what they want, or be prepared to see their future and security go down the drain.


Gov. Brown is making it very personal for everyone. (0.00 / 0)
That is the only way it will make the point.

Then there is a little un-gift from Washington, DC:

http://www.govtrack.us/congres...


[ Parent ]
Agreed (0.00 / 0)
I know many that lean Dem or are Dem and even some Conservatives who will fly off the handle if CalGrants are eliminated. Great moblilization effort of students to support the revenue increases is what this will do.

[ Parent ]
Perfectly Illustrated (5.00 / 1)
 Most people don't pay attention, circulation of all the major newspapers is down and the local news rather fill up the hour with shock and awe journalism.

The only way to make this work is to Bring The Pain as Method Man would say. Show them what's at stake, you don't support this, you loose this state service or state fees increase.

As for paying higher fees at DMV, that's a very mixed bag. Some people really can't afford $18 extra, others can but would complain that fees are high enough as it is. That is because California all to often goes to this well for tax money when it needs it, since we are so dependent on cars, especially in SoCal.

We need to push taxing the rich as a priority. Its not like they'll move out of state or something. Just a minor raise will help our budget shortfall.

 


[ Parent ]
Brown Can't Eliminate Redevelopment Agencies (5.00 / 1)
I haven't seen the proposals but I know he won't be able to eliminate Redevelopment Agencies.  They are created based on debt being issued and if eliminated, would cause massive bond defaults.  I can't see wealthy developers allowing the State to to get rid of something so beneficial to them either.

There are lots of stupid separate legally established pots of money that cities and counties have to deal with, and we have never been able to waive a hand and eliminate them.  While I have seen the benefits and drawbacks of redevelopment, I just can't see how the governor has the power to eliminate them.

Local government funding is a mess, and I dealt with it as a Finance Director for two So. California cities.  If he'd go after the business loopholes in Prop 13, that would help and make the law more fair.  Corporations have driven a truck through what constitutes an ownership change allowing reassessment - they never trigger it.  We also should reexamine all the exemptions we've voted on for Prop 13.  From allowing a senior citizen to move once and keep their exemption, we've now expanded it to be passed down to their heirs.  That's just 2 examples, there's lots of areas we could fix it and keep its intent.

While he's got the opportunity, he should use it to propose a complete and honest look at how government is financed, what Schwarzenegger promised but chickened out of. There are some really good solutions that would take some work to explain and fight for.  Let's have some real solutions instead of making public employees' the scapegoat for a systemic problem.


Prop 13 (0.00 / 0)
Prop 13 was promoted as helping (especially) those who are senior citizens to keep their homes, because of a lowered property tax burden. That sounded great on the news and read well in the newspapers. What else is new!

Do records even still exist about the Prop 13 financiers, the ones who put out all that money, time, and effort to get it on the ballot?

I have wondered for a while if it wasn't just another candy coated poison pill for the non-wealthy, non-corporate types (i.e private citizens,) where all of the manipulators were snickering all the way to their off-shore banks about how it was a small thing if a few seniors saved a few bucks, because they were going make billions off of the deal, with a different incarnation of insider trading!


[ Parent ]
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