Friday, January 21, 2011

Jerry Brown's Budget

California's "new" (but experienced) governor is bringing some urgently-needed honesty and fresh thinking to the budgeting process in a state weary of smoke, mirrors, a two-thirds requirement in the legislature for tax increases, and the ravages of a recession imposed largely by external forces. But some mistakes are being made that will probably doom the effort to continue current taxes soon to expire unless the voters extend them.

First, the good news: the governor proposes to axe so-called "redevelopment funds," which local governments (primarily cities) allegedly use to promote economic and housing projects in blighted areas. Although not a bad idea conceptually, and occasionally successful in practice, this program does not pass the "smell test" when it comes to implementation in many instances. (And who can oppose efficiency in government -- except those who benefit from it?)

As documented by the Los Angeles Times, some governmental agencies have spent millions of dollars and failed to produce a single affordable housing unit. Too often, redevelopment funds constitute essentially a slush fund used to subsidize local developers (private sector "entrepreneurs" who won't take their capitalistic risks without a government handout) -- who of course then use some of their profits to line the pockets of the local politicians who have the power to hand out the money. I used to wonder about the hypocrisy of accepting government subsidies for such developments while opposing the use of tax dollars to help ordinary citizens; but that is old news, as the principle of "me first" -- gradually evolving into "me only" -- seems to rule the country these days. Predictably, local officials are strongly opposing Governor Brown's initiative on this issue.

The bad news is that, as usual, social services for the poor are being asked to shoulder the heaviest burden of budget cuts Some programs are being proposed for complete elimination -- for example, the Adult Day Health Care program that helps seniors continue to live independently when they might otherwise be in nursing homes.

The problem with focusing cuts almost exclusively on poor people is that they will not be able to "carry the day" when the extension of existing tax cuts due to expire comes on the ballot in June -- which apparently is the governor's plan. In this "me first" environment, most people only vote for taxes when they see a direct benefit to themselves With no "skin in the game" for the average middle-class and upper-middle-class citizen, what incentive (other than, umm, "the common good") do they have for what they perceive as self-imposed pain (with no gain)?

The governor needs to identify programs that impact the well-to-do and cut them also, at least proportionately. Then his tax-extension program might have at least a fair chance of success.

Oh, by the way, come around Christmas time, I'd love to see Governor Brown commute some prison sentences. Since his predecessor saw fit to reduce the sentence of the son of a political ally, ignoring the plight of many people who had committed similar crimes, Brown should finish the job by taking a comparable action to benefit those who are not well connected. In addition to saving money on the prison budget, it would help us celebrate a country that claims to offer "justice for all."