Jerry Brown's California still has much to do
The Washington Post, April 4, 2013
I hate to burst anyone's bubble, but all the talk that Gov. Jerry Brown (D) has basically "fixed" California by balancing the budget through a tax hike on high earners seems laughably off-base, at least to this Los Angeles native. So before this meme gets out of hand, let's unpack the confusion behind the premature Golden State cork-popping. Dust off those analogy skills that brought you such pleasure on the old SAT, and all will be revealed.
Here we go. "Balanced budget" is to "societal renewal" as:
A) "H2O" is to "water"
B) "Atlantic" is to "ocean"
C) "Night" is to "day"
D) "Ante" is to "poker"
If you picked A, you think a balanced budget is basically a formula for renewal. If you picked B, you're saying balanced budgets are a way of putting a name to this renewal—as if achieving fiscal balance were one way a society can renew itself. Option C means you think such renewal inevitably follows the emergence of balanced budgets, as night follows day.
But a moment's reflection should convince you that all of this is wrong. The best analogy is poker—because in the real world, when a state (or nation) gets its fiscal house in order, that's just the ante. It's table stakes. It's the thing we can all stipulate: The first duty of a government is not to go broke. But that hardly fulfills some bold aspiration. Tidy accounting says almost nothing that matters about the health of a society. For a state such as California (and a country such as the United States), fiscal prudence is merely a prerequisite for a broader agenda of renewal.
And California, like the country, is still desperately seeking a real renewal agenda.
Need proof? California's 9.6 percent unemployment rate and stifling regulations on business are just the beginning. The biggest slow-motion calamity is its school system.
Only 24 percent of students in California's high school class of 2011 were proficient in math, according to research by Stanford's Eric Hanushek and several colleagues. This means the state whose public schools were once the envy of the world now ranks 41st in the United States in math—just behind Arkansas. Students in thirty-six countries significantly outperform California's, including Portugal, Slovenia, Latvia and Lithuania. The good news, I guess, is that California's kids are right there with Greece's—and safely ahead of Trinidad and Tobago's.
The situation is even more alarming when you look at California's Latino population, which represents the future of the state. Hispanic students in California perform no better than the average student in Mexico, a level similar to that of the typical student in Kazakhstan, according to Hanushek's research.
If California's K-12 schools are squandering untold amounts of human potential, the state's higher-education system adds insult to injury. Tuition and fees have roughly doubled in recent years. Thanks to budget cuts, tens of thousands of young people who could benefit from postsecondary learning have been shut out of the system, or are unable to graduate in any time close to four years, or have been forced to take on far more debt than any other wealthy nation expects of students.
All this while California has come to spend more on prisons than on higher education.
Then there's the state's infrastructure deficit, which the blue-ribbon Think Long Committee has pegged at a staggering $750 billion.
The point? Even within a budget headed toward momentary balance (at least on paper), California has to find a way to invest much more in the future and not simply ratify runaway health and pension costs—and massive unfunded promises in both areas—that are crowding out all other state services.
No one's saying the politics of reform are easy. But seen in this light, Brown's ability to win voter approval to temporarily raise marginal rates on top earners past 13 percent (and thus to 55 percent or more, once Obama's income and health-care tax hikes are included) is hardly a cure for what ails the Golden State.
Especially when, as David Crane, president of the nonpartisan group Govern for California, points out, at least 60 percent of the new tax hike will be eaten up by fresh public-pension liabilities that were disclosed only after the November vote. It's shocking but sadly predictable in California public finance: The bulk of the taxes voters thought would go to help schools will almost certainly never reach the classroom.
Brown deserves credit for trying to stem the bleeding. Underfunded schools and over-indebted college students may face a little less insanity for a few years. But, in the end, Brown has done little but slap a temporary, inadequate patch on a dysfunctional system of financing and service provision that needs a fundamental rethink if California is to build a better future.
That this patch is nonetheless being toasted in some quarters as the harbinger of a California "comeback" is a sad measure of how far our standards for public-sector achievement have fallen.