Budget Surplus in California

Responsible governance from the Golden State?

Via the WSJ:  Jerry Brown’s Legacy: A $6.1 Billion Budget Surplus in California.

California Gov. Jerry Brown appears poised to exit office next year with a top political priority in hand: free from the massive budget deficits that had weighed on his predecessors.

Buoyed by tax increases passed under his administration and a strong economy, Mr. Brown said Wednesday that the state is projecting a $6.1 billion surplus for the next fiscal year, which begins July 1.

[…]

As is his custom, the governor warned of an inevitable economic slowdown.

“California has faced 10 recessions since World War II, and we must prepare for the 11th,” he said. “Let’s not blow it now.”

Mr. Brown has been preaching frugality for years—he kicked off one past budget talk with Aesop’s fable about the thrifty ant and the lazy grasshopper.

Mr. Brown took office in 2011 with a $27 billion deficit and drastically slashed spending. In 2012, he staked his governorship on a tax increase that voters approved that year and reauthorized in 2016.

This strikes me as a case of actual fiscal conservatism or, at least, straight-up fiscal responsibility.  We are in a moment of economic health, and the notion of saving short-term surpluses for when there is a downturn is nothing less than responsible policy-making.  The surpluses will quickly go away if the economy slows.

BTW, contra Representative Nunes’ tweet, this doesn’t sound like a a third world economy.

As a side note, I have noticed a lot of criticisms of California from the right wing commentariat of late, and regardless of what one may wish to say about California, it is not failing nor is it some dsytopia.  Yes, California is expensive and crowded–neither of those variables is indicative of failure–indeed, quite the opposite.  I can’t help but think that the rhetorical attacks on California are a combination of downplaying things like the surplus (which is linked to higher taxes) noted here as well as the fact that California gave HRC the win in votes in 2016.  If California can be marginalized, then those votes are marginalized. And yes, conservatives have long criticized California as a high-tax, high regulation “land of fruits and nuts” but the derision seems more intense and targeted of late.

Of course, when it comes to Tucker Carlson it is about the white nationalism as much as anything else (at least it is these days, as I guess it is, sadly, good for ratings). Via the Business Insider:  Tucker Carlson suggests California is turning into a third world country because of poor Latin American immigrants.

Primetime Fox News commentator Tucker Carlson used a segment during his show Friday night to focus on a recent report that rated California last in terms of quality of life among the 50 US states.

“How do you take a place that was as world famous as Eden and in 50 years, make it the worst place in America?” Carlson asked his guest, radio talk show host Ethan Bearman.

When Bearman suggested that overpopulation might be one of the reasons for California’s poor quality of life, Carlson interjected.

“Hold on, where do the majority in the past 30 years — where do the majority of those people come from?” he asked. “Do they come from the Midwest? No, they came from a third world country. Do you think that might have something to do with it?”

Carlson continued: “The overwhelming majority [of immigrants] have come from Latin America. And a lot of them are awesome people, and smart, and add a lot, and even the super poor ones, I think a lot of them are really great people. But the truth is, if you import millions of really poor people with no education, it doesn’t mean they are bad people, but maybe your state gets a lot more like the countries they left.”

As the conversation proceeded, news chyrons flashed at the bottom of the broadcast.

“California Chaos: Drug Needles in the Streets,” one read.

“Is California Turning Third World?” read another.

The propagandist chyrons are, while a staple of such shows, nothing less than gross and misleading, as is the negative stereotyping of Latin Americans.  (Also, what might “come from the Midwest” be a proxy for?).

At a minimum if California was some kind of hellhole (and it is not) then it would not be the most populous state.  Yes, some people (and businesses) leave because of crowding and expense, but the notion that California is a horrible place is ridiculous.*  Most really attractive places are both expensive and crowded (it has a lot to do with supply and demand, dontcha know).

I would note that the basis of Carlson’s position was some survey that placed California as 50th in terms of quality of life.  This survey ranked North Dakota as best, so take that for what it is worth.


*I have personal experience with this having completed high school in California as well as doing my undergrad studies at UC Irvine (and still having family in the state).  I decided not to pursue employment in CA after grad school in Texas because of the crowding and the cost of living.  Having said that, I full well know that California is a beautiful state with a lot to offer.  To say otherwise is pure foolishness.

 

FILED UNDER: Deficit and Debt, US Politics
Steven L. Taylor
About Steven L. Taylor
Steven L. Taylor is Professor of Political Science and Dean of the College of Arts and Sciences at Troy University. His main areas of expertise include parties, elections, and the institutional design of democracies. His most recent book is the co-authored A Different Democracy: American Government in a 31-Country Perspective. He earned his Ph.D. from the University of Texas and his BA from the University of California, Irvine. He has been blogging since 2003 (originally at the now defunct Poliblog). Follow Steven on Twitter

Comments

  1. michael reynolds says:

    California is not crowded, LA is crowded. We have a slightly lower population density overall than Ohio. If CA were a country it would have roughly the population density of Spain, or 7% of the density per sq. km. of South Korea. The UK is 6 or 7 times as dense.

    We’ve had a net loss over the last decade of about a million people – most left during the housing boom. We certainly do have extremely high property values. High enough that even the prospect of moving to central London at some point doesn’t terrify me. A great deal of that property is within a half hour of the Pacific Ocean, and all of it enjoys the unequaled California climate.

    We do have some lousy, decrepit freeways – in LA. We have a miserable international airport – in LA. But we also have 3 of the top 10 hospitals and world class universities, superb dining choices (SF, LA, Napa). Also: Silicon Valley, Hollywood and our huge agricultural center.

    Compare Democrat-run California to Republican-run Kansas. Kansas, following the GOP plan, is coming up short by a billion a year and has had to reverse tax cuts. And we have a big enough surplus that we could cover Kansas’ deficit for the next six years.




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  2. al-ameda says:

    Yes, now even an unethical lightweight native Californian Republican like Nunes feels free to characterize California as a Third World sh**hole.

    The fact is, Jerry Brown has governed as a centrist moderate Democrat, and Brown is, by nature fiscally responsible. Another important fact to realize is that, regardless of who governs this state, fiscally California has a tax structure problem that makes California susceptible to wide swings in the state economy as recessions come and go.




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  3. @michael reynolds:

    California is not crowded, LA is crowded.

    Point taken–although not just LA. Orange County, San Diego metro area, the Bay area, etc (places where people want to live). When people think about living in California, they don’t think of the eastern portions of the state, for example.

    And, indeed on the infrastructure issues–although those are national.




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  4. James Pearce says:

    @Steven L. Taylor:

    When people think about living in California, they don’t think of the eastern portions of the state, for example.

    I dunno, the California desert is on my list of “potential retirement destinations.”

    Also, Tucker Carlson is an idiot. California has its problems, and I’ve commented on a few of them, but its an awesome place with awesome people.

    Also, what might “come from the Midwest” be a proxy for?

    Somalians? Michigan Arabs? <—A joke.




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  5. michael reynolds says:

    @Steven L. Taylor:
    Well, as a native Angeleno I consider everything north of San Diego and South of Santa Barbara to be LA. But the Bay Area is not crowded, it just suffers from a bad case of NIMBYism – we don’t apparently cotton to dense population, so I don’t think we have anything over 4 stories in Marin, and we still have a hell of a lot of trees. I can drive 30 minutes and be at wild, nearly unpopulated seashore, or almost as unpopulated wine country. And 90% of the time I can make it from central Marin to SFO in 45 minutes, whereas the trip from Irvine (yep, used to live there) to LAX could run as little as 90 minutes or as much as three days, depending on the 405.




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  6. PJ says:

    @michael reynolds:

    And we have a big enough surplus that we could cover Kansas’ deficit for the next six years.

    You should watch language like that, the GOP may get ideas…




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  7. Kari Q says:

    One reason California is receiving more criticism from the right is that it is succeeding economically after increasing taxes. The state provides a counter example to the failure of tax cuts to spur growth in Kansas and Wisconsin. If people notice this, it undermines the sole remaining rationale for Republicans that doesn’t involve racism and xenophobia: tax cuts.

    Of course, the direct challenge to Trump is probably the primary reason. Many California politicians are very publicly taking anti-Trump stands, which invites criticism from the right.

    And as for Jerry Brown, if there’s one thing the man knows how to do, it’s balance a budget. Californians elected him to fix the budget mess that was the result of the recession of 2008, and he did it. His previous experience in the job, was I suspect, an important factor in knowing how to accomplish this. I worry what will happen to the state after his departure when we are left with elected officials who are term limited and don’t have the time to gain the knowledge and experience necessary to be truly effective legislators and executives.

    And Devin Nunes is certainly welcome to move out of the state if he thinks it’s so terrible. His shtick would play better in parts of South Carolina or Texas, any way.




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  8. Kari Q says:

    @michael reynolds:

    We’ve had a net loss over the last decade of about a million people

    Why do you say this? I checked and the numbers I saw indicated that the population was still growing, albeit more slowly.

    I’m not arguing, just wondering what your source is for that.




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  9. Davebo says:

    @Steven L. Taylor: When I think of places in California I would definitely not want to live Nunes’ district comes to mind even if it is among the most affordable areas of the state to live in.




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  10. eric78 says:

    @Davebo: I live in Nunes district. I live walking distance from his Clovis office on the north side of his district. I have never seen the guy. He seems to be only interested in national politics and hasn’t had a public town hall in years. Can’t wait to vote for his opponent Andrew Janz.

    Clovis, CA is very affordable compared to the Bay Area, Sacramento area and LA but is more expensive than the southeast part of the Central Valley where the rest of the district is, which mostly mountain and farming towns.




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  11. michael reynolds says:

    @Kari Q:
    It was somewhere on the intertubes. Something like 4 million in, 5 million out, for a net loss of a million.




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  12. Kari Q says:

    @michael reynolds:

    Ah, migration without reference to births, got it. Thanks.




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  13. Mikey says:

    @James Pearce:

    Also, what might “come from the Midwest” be a proxy for?

    Somalians? Michigan Arabs? <—A joke.

    A good joke. Especially since the idiot right has used Dearborn, MI–which has had a significant population of Middle Eastern descent for, oh, about 80 years–as an example of how the EVIL MOOSLIMS are TAKING OVER!

    Being from that area, I just laugh at the stupidity, but a lot of people unfamiliar with Michigan’s history buy into it.




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  14. Mikey says:

    Here’s what’s really going on in California:

    California Leads U. S. Economy, Away From Trump

    California is the chief reason America is the only developed economy to achieve record GDP growth since the financial crisis of 2008 and ensuing global recession, according to data compiled by Bloomberg…

    In the stock and bond markets, where investors show no allegiance to political parties, California has outperformed the rest of the U.S. the past five years…

    California’s borrowing cost is 0.15 percentage points lower than the average for states and municipalities and has declined to just 0.24 percentage points more than the U.S. pays on its debt, down from 1.97 percentage points in 2013…

    Behind such a favorable outlook is the diversity of the California economy, which grew $42.3 billion during the first three quarters last year. That’s almost as much as the next two fastest-growing states, New York and Florida, combined…

    The capitalist juggernaut that is California helps explain why the state’s per capita income increased 9.5 percent since 2015, the most of any state and the most since 2012, according to data compiled by Bloomberg.

    As to why the Republicans would want to refer to such a place as “third world,” @Kari Q pretty much nailed it.

    And you know what else is great about California? You can grow stuff there all the time. I mean, I was out there a couple weeks ago and my co-worker and I visited his aunt in Vallejo, and she has a whole garden out back, and there was a lemon tree just bursting with beautiful, ripe lemons. IN FEBRUARY! I grew up in Michigan, the only thing that grows there in February is fvcking icicles.




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  15. michael reynolds says:

    @Kari Q:
    Never rely on me for anything involving numbers. My math extends to calculating tips and payouts.




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  16. @michael reynolds:

    Well, as a native Angeleno I consider everything north of San Diego and South of Santa Barbara to be LA.

    Fair enough, although the denizens south of LA county don’t think of it that way.




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  17. @michael reynolds: Although when talking about the definition of “crowded” and CA, I didn’t really understand Lex Luthor’s scheme in the original Superman movie until I moved to SoCal.




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  19. Hal_10000 says:

    I wouldn’t describe California as a hellhole, but I wouldn’t describe it as a paradise either. A lot of the budget balancing was spending cuts which would have been decried as cruel and draconian if a Republican tried them (and, during a recession, would have been denounced as economic idiocy as well). California also has one of the highest rates of inequality in the nation and a very high cost of living (as Michael Reynold noted, partly a result of NIMBYism gone mad). There’s also a big bill coming for public employee retirements and a bullet train that is massively overbudget already. Brown deserves a lot of credit for what he’s done so far, but we’ll see what happens if/when the Silicon Valley bubble bursts.

    North Dakota is ranked as high as it is because the unemployment rate is extremely low, as is the cost of living. That’s mostly because of the fracking boom, of course.




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  20. @Hal_10000: I am not suggesting California is perfect. As noted, I avoided returning. I would have to make a lot more money than I do (a LOT more) to make CA worth it to me, and if I did have that kind of money, I likely would still not live in CA.

    The point is that CA is a desirable place for a lot of people, and it is an economic engine. To deride it as “third world” is ridiculous (and, in the case of Carlson, racist).




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  21. Kari Q says:

    @Hal_10000:

    I wouldn’t describe California as a hellhole, but I wouldn’t describe it as a paradise either.

    I don’t think any of us are blind to the problems in California. After all, we’re the ones who live with them. But the problems that we actually have rarely even remotely resemble the problems that the right claims we have.

    but we’ll see what happens if/when the Silicon Valley bubble bursts.

    Boom and bust. It’s the California way. If/when Silicon Valley goes through another bubble burst, California will recover. It always does, no matter how often people predict doom.




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  22. Barry says:

    @Mikey: “I grew up in Michigan, the only thing that grows there in February is fvcking icicles.”

    As a Michigander, I call ‘bullsh*t’ on this. We have potholes so big and deep you can’t even hear the screams of the doomed souls who fell in.




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  23. Barry says:

    Steven, you have a Ph.D. in political science, and hang out with others who study such things for a living.

    Maybe, just maybe, it’s simply a fact that 90% of the time Democratic governance is far better than Republican governance.




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  24. gVOR08 says:

    So basically CA got rid of Republicans, raised taxes, solved their serious fiscal problems, and are doing great. Gawd I hope they’re still a bellwether for the nation.




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  25. Rick Zhang says:

    I think it’s all Jerry Brown. I remember meeting him during a lobbying session in Sacramento, along with Kevin de Leon. He’s governed as a Rockefeller Republican and has stood up to the Democrats in the legislature who have tried to pressure him to spend more. One of the best things to happen to the state in years. Most reasonable Republicans grudgingly respect him.

    I so wish I could vote for him for president.




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  26. reid says:

    @Rick Zhang: Yes, Brown was my favorite when he ran for president in… 1988? He was probably much more of a lefty then, and I was younger and more foolish. I think he’d make a great president now.




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  27. DrDaveT says:

    Yes, some people (and businesses) leave because of crowding and expense

    As usual, Yogi Berra said it best:

    Nobody goes to that restaurant any more — it’s too crowded.




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  28. Kari Q says:

    @reid:

    It was ’92. I still can’t believe people preferred Clinton.




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  29. de stijl says:

    @Kari Q:

    It was ’92. I still can’t believe people preferred Clinton.

    In ’92, Brown was deemed by the gate-keepers as unelectable. Perhaps in that time he was, but we would have been well served.




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  30. Mikey says:

    @Barry: Those are always there, they just expand in February. Then it gets warm and it’s the beginning of Michigan’s second season: construction.

    That’s when you see the blooming of Michigan’s state tree, the Orange Barrel.




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  31. Tyrell says:

    How about the money for Governor Brown’s “high speed” train project? A project already in trouble.




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