Gov. Jerry Brown recently delivered his final “State of the State” address to the Legislature. Whether you agree or disagree with his policies, he will leave a deep legacy of public service in our state that will be felt for decades to come.
The governor not surprisingly touted what he viewed as his accomplishments. I do give him credit for adding money to California’s “rainy day” fund for fiscal emergencies. He is right to warn that a pending economic recession could cause a $20 billion yearly shortfall and that it is better to prepare now than later.
However, the picture of California that he painted in his speech downplays festering liabilities of the state. Whether he acknowledges it or not, there is a growing crisis of affordability and accountability.
First and foremost, California has the nation’s highest poverty rate, when factoring in cost-of-living. One out of five Californians is poor. The poverty rate is partially driven by the state’s housing costs that have made buying a home difficult. Yet the state’s solution to address housing costs is the same to every problem — add more regulations and fees. For example, the governor signed Senate Bill 35 last year that could add $84,000 to the cost of building a 2,600-square-foot home by requiring “prevailing” wages on new construction.
Whether it is housing, taxes or transportation, Californians are paying more now than ever before. But Sacramento is not starving for money. Under Gov. Brown, the budget has risen by 52.4 percent from $86.4 billion in 2011-12 to a proposed $131.7 billion in 2018-19. However, California’s population did not grow by 52.4 percent during the past eight years. So where is the money going? Some is going to grow government entitlement programs and to questionable priorities such as high-speed rail.
This leads to my second point — the lack of accountability in state spending. According to recent media reports, California will have to spend another $2.8 billion to build an unneeded train while Californians are stuck paying higher gas and car taxes. That is $2.8 billion we could use for other priorities — such as repairing roads and our aging water infrastructure. With no private investment coming, it is time for the governor to put the brakes on his legacy train.
The governor and the Democratic-controlled Legislature are also neglecting to fully meet the promises that the state has made to Californians.
Take Proposition 30 (2012) for example, the “temporary” income tax increase to fund education. Despite the promises made to use the funds for education, the current budget spends billions of dollars from Prop. 30 on non-education items.
New housing developments with requirements to provide new schools are feeling the pressure. California is waiting longer to build or modernize schools because most of the bonds are not being issued. Why are we not building and fixing schools sooner?
The governor and Legislature also promised construction of additional water storage if voters approved a water bond, which they did in 2014. To date, this additional water storage has yet to be realized. Where is the storage?
Last, but not least, the state has at least $234 billion in pension debt it owes to public employees and retirees. The California Public Employees’ Retirement System shows that, as of June 2016, CalPERS is underfunded by more than $138 billion. The teachers’ retirement system (CalSTRS) has a $96 billion shortfall. How is the state going to pay for this? The governor did not say.
In his final months in office, the governor can help boost his legacy by using his bully pulpit to address affordability and accountability. The promises made to Californians must be fulfilled.