California's balanced budget? Hold the applause.
Although Gov. Jerry Brown has pronounced California's "did the impossible" with its balanced budget, the state is still in miserable condition. Like the federal government, it has to make some hard choices going forward. And voters need to make an extra effort to participate in state politics.
“California did the impossible,” said Gov. Jerry Brown in his recent State of the State address. He was referring to a surge of revenue, stemming from a tax hike and modest economic growth, which enabled the state to avoid harsh new rounds of budget cuts. “Two years ago, they were writing our obituary,” he concluded. “Well it didn’t happen. California is back, its budget is balanced, and we are on the move.”
An old saying holds that the future happens first in California. Someone from outside the state might thus take the governor’s speech as a sign of happy days ahead, both for California and the whole country. There is a catch: California is “back” only in a relative sense.
Although the state’s condition isn’t as horrible as it was in the pit of the Great Recession, it’s still miserable. California – like the federal government – will have to make some hard choices going forward.
Take the “balanced budget,” for instance. The state may be breaking even for the year, but as the governor has acknowledged, it faces a $28 billion “wall of debt” left over from previous years. And last autumn, an independent group of fiscal experts explained that this figure omits such items as unfunded pension obligations. Add those debts to the total, they found, and the real burden is anywhere between $167 billion and $335 billion.
Just as California will have to face the looming liability of unfunded pensions, Washington will have to tackle entitlement reform to keep Social Security and Medicare solvent for the next generation.
In California, debt has created a good news/bad news joke. The good news is that California has a better credit rating than Illinois. The bad news is that it has a worse credit rating than the 48 other states.
Decades ago, California could count on population growth to get it through tough economic times. A steady influx of young newcomers from other states translated into flourishing businesses and bulging government coffers. In recent years, however, California has been sending more people to other states than it has been getting from them. Immigration has kept the total population from shrinking, but the boom days are over. After the 2010 census, California gained no seats in the US House of Representatives for the first time since statehood in 1850.
Moreover, the state’s birth rate is plunging. In the near term, this trend will ease some of the pressure on California schools, but in the longer run, it will mean fewer people entering the workforce just as baby boomers are retiring from it.
One could pile on additional data about poverty and unemployment. The key point is that population and economic growth have slowed. And because the state is so large, bad times in California could affect the nation as a whole.
Like the federal government and many other states, California will have to curb additional spending and debt. To his credit, the governor spoke in his State of the State about preparing for the “leaner times that will surely come.” That same speech, though, raised serious doubts about whether he really meant it. He proudly noted that California is going forward with a huge high-speed rail project, even though critics across the political spectrum have pointed out that it is ridiculously unnecessary, exorbitantly expensive, and environmentally harmful.
Underlying the state’s fiscal malaise is a severe shortage of political accountability. Elected officials have little incentive to make tough decisions, because they pay no political price for evading them.
Accountability requires that voters know what the politicians are doing. In California, they generally do not. In a survey last year, only 16 percent of adults said that they knew a lot about how state and local governments spend and raise money, and 38 percent said they knew some. And even among those who said they had a lot or some knowledge, only 18 percent could correctly identify the biggest area of state spending (K-12 education).
Part of the problem is structural. California has a complex government organization chart that only policy wonks really understand. (For instance, few voters know that key tax decisions belong to a powerful body called the Board of Equalization.) Legislative districts are gargantuan: Any one California state senator represents a population greater than that of South Dakota. Accordingly, California government is remote from average citizens.
Years ago, Californians could rely on the mass media to cast some light on this remote government. But that light is flickering. California has many gifted political reporters, but fewer and fewer of them are covering state politics. In recent years, newspapers have slashed or closed their bureaus in the state capital, and many have cut back on local coverage as well.
How could California bring accountability back? Streamlining state government would better enable voters to see which officials have responsibility for which decisions. Reducing the size of legislative districts would bring lawmakers closer to the people. The mass media could help by renewing their commitment to reporting on policy at the state and local level.
Unfortunately, government reform does not have much of an interest-group constituency, and journalism reform runs into the cold headwinds of media economics. In the end, voters just have to make an extra effort to participate in state politics. That prescription may be idealistic, but it’s not entirely fanciful, either. To paraphrase the late journalist Eric Sevareid, we should neither overestimate the voters’ information nor underestimate their intelligence. Sooner or later, the alarms will get their attention, and we may hope that they will demand accountability.
If voters turn that potential into participation, then California really will have done the impossible – and presented a model for the nation.