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Joe Guzzardi: California still has obstacles to overcome

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Posted: Saturday, December 14, 2013 12:00 am

In August, Rolling Stone magazine wrote a flattering article about Gov. Jerry Brown which said that the 75-year-old once and current governor has brought California back from the brink of double-digit unemployment and multibillion-dollar deficits that threatened to force the state into bankruptcy.

The story, titled “Jerry Brown’s Tough Love California Miracle,” was effusive in its praise of Brown and called him “America’s shrewdest elder statesman.” Brown got high grades on how he handled raising taxes, cutting the budget and allocating education funds.

Brown attributes his success to his singular focus on California. During his first tour of duty as governor 38 years ago, Brown kept one eye on Washington, D.C. He made three bids for the Democratic presidential nomination and one for the Senate, all unsuccessful.

Without question, today’s California is healthier than the one I moved away from in 2008. Back then, California’s outlook was bleak: foreclosures, high unemployment and, because of the global recession, sharp declines in tourism. The UCLA Anderson Forecast, the university’s business school’s quarterly review of the state economy, concluded, “There are no bright spots on the horizon.”

If anything, the UCLA prediction may have been understated. During fiscal year 2009-10, the deficit hit a staggering $60 billion. The state controller, John Chiang, sent IOUs instead of cash to some creditors.

Today, that’s all ancient history. But any comprehensive analysis of the Golden State has to include both Californias: the areas that are thriving — like Silicon Valley, Hollywood and Napa Valley — and those that are struggling, like San Joaquin Valley.

California’s unemployment rate is 8.7 percent, significantly higher than the national 7 percent rate and way higher than Florida’s 6.7, or Texas’ 6.2.

For the regular 9-to-5 crowd, Brown’s revived California still isn’t the haven Rolling Stone made it out to be.

Californians pay among the country’s highest retail gas prices. Statewide per gallon price is $3.58, more than 31 cents above the national average. Electricity costs are equally steep.

California is poised to spend $3.1 billion more on K-12 schools to shore up students’ chronic under-achievement, as if throwing money at a problem ever solved anything.

Although California is thought by many to be relatively high income, according to the Census Bureau, 72 percent of households make less than $100,000. The median income is $58,000.

Nevertheless, California expects to end its fiscal year with a $2.4 billion surplus.

But not everyone thinks that California’s problems are in the rear view mirror.

In 2011, former Federal Reserve Bank Chairman Paul Volcker and former New York Lt. Gov. Richard Ravitch created the State Budget Crisis Task Force to study the long term viability of six states, including California. The report concluded that California and its localities will face major ongoing challenges because of an aging population, rising health care costs, unfunded promises and an increasingly volatile revenue and sales tax base.

That may partially explain why, during the last 20 years, 3.4 million middleand upper-middle-class families have fled to states with lower taxes.

California has come a long way since 2008, and Brown deserves much of the credit. But the state, like many others, still has serious issues to overcome before it can be declared out of the woods.

Joe Guzzardi moved from Lodi to Pittsburgh in 2008. He worked for the Lodi Unified School District for more than 20 years. Contact him at guzzjoe@yahoo.com.

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Welcome to the discussion.

13 comments:

  • Jeff Tillett posted at 11:30 am on Fri, Dec 20, 2013.

    Jeff Tillett Posts: 543

    actually, I think he blasts "republicans" on a regular basis, not "conservatives". Those two are often conflated, but perhaps it's a misnomer.

     
  • Brian Dockter posted at 7:52 am on Wed, Dec 18, 2013.

    Brian Dockter Posts: 2826

    John,

    The question should be: Is there anyone who believes fiscal Conservatism does not work?

    You're quite the fan of Gov. Brown and President Obama. How can that be possible I ask you? Obama is the farthest from fiscal Conservatism as one could get.

     
  • Brian Dockter posted at 6:35 pm on Tue, Dec 17, 2013.

    Brian Dockter Posts: 2826

    Until Liberals succeed in using it. Then it's not evil. I wish you would make up your mind.

     
  • Brian Dockter posted at 6:31 pm on Tue, Dec 17, 2013.

    Brian Dockter Posts: 2826

    John, You often speak of Conservatism as it is an evil thing. unti

     
  • John Lucas posted at 9:38 am on Tue, Dec 17, 2013.

    John Lucas Posts: 2730

    Is there anyone that believes Republicans are fiscally Conservative? That is not proven by history. They ran up 80% of the national debt before Obama. Their minor deity, Dick Cheney, famously said the deficits do not matter. The only time they are even remotely concerned or even talk about the deficit is when Democrats are in power.

    It is interesting why this is so. They do not care about deficits and have admitted it. Their only mission in life is to make sure plutocrats like Mitt Romney pay less to the government by percentage than someone who works at the minimum wage. When they are in power they do not have to worry about it and spend like drunken sailors. When out of power they use talking about the deficit as an excuse to make sure their masters taxes do not get raised under any circumstances. The idea that they care about the middle class is a bad joke.

     
  • Brian Dockter posted at 7:20 am on Tue, Dec 17, 2013.

    Brian Dockter Posts: 2826


    I love it. The Governator in his smoking tent/office.


    http://www.youtube.com/watch?v=_FI8y0LbDy8

     
  • Brian Dockter posted at 7:08 am on Tue, Dec 17, 2013.

    Brian Dockter Posts: 2826

    I found from reading the rest of the article that Jerry Brown is a fiscal Conservative. Now, I'm not going to conclude yet he does a better job at being a fiscal Conservative than Conservatives. But based on the fact that his quick fix lasted thirty years when he was Governor the first time, I may have to re-examine the ability of a Democrat exercising fiscal Conservatism.

    And I do have to say it was quite convenient for Democrats that all of Brown's quick fixes began to collapse when Arnold became Governor.

     
  • Brian Dockter posted at 6:54 am on Tue, Dec 17, 2013.

    Brian Dockter Posts: 2826

    http://calnorthern.net/who-was-jerry-brown/

    Brown’s first tenure as governor of California represented a turning point for the Golden State. He presided over an economic crisis that threatened to end the “California Dream,” one that had become a reality in the 1950s and ’60s. The dream included a middle-class mélange of affordable homeownership, low-cost but high-quality education, and a broad social safety net that ensured the basic needs of most Californians were met. In the 1970s, rising inflation and persistent unemployment began to threaten this, calling into question government’s ability to provide continuing access to the wide array of benefits. The right and left became increasingly polarized over how to spark an economic recovery, and for the first time pundits began asking if California’s best years were behind it.

    Jerry Brown did not solve the problem. Rather, he cobbled together a package of quick fixes that held together for thirty years before finally collapsing during the governorship of Arnold Schwarzenegger. The effort seemed to exhaust him, and a weary electorate chose Republican Pete Wilson over Brown to fill an open U.S. Senate seat in the 1982 election. Sixteen years passed before Brown was elected to public office again.

    As Jerry Brown is about to ask California to send him back to the governor’s office to face many of the same problems he dealt with three decades ago, examining how he addressed the challenges of the 1970s can help determine what kind of politician—and what kind of man—Jerry Brown really is.

     
  • Brian Dockter posted at 6:39 am on Tue, Dec 17, 2013.

    Brian Dockter Posts: 2826

    Hmm,

    Democrats want all the credit for finally taking a more Conservative approach to many of the issues in Calif. In due time they will find a way to proove it was Republicans who strongarmed them when things go south again. It's not that taking a Conservative approach is bad. It's just bad when Democrats think they can do it better than Republicans.

     
  • Andrew Liebich posted at 6:58 pm on Mon, Dec 16, 2013.

    Andrew Liebich Posts: 2999

    The truth about California’s finances.

    California always makes rosy budget predictions and then makes downward revisions as the year goes on and reality sets in. In November of 2012 for example, California’s nonpartisan Legislative Analyst’s Office wrote, “a year end RESERVE of $948 million." Once reality set in they told the truth, "a $943 million DEFICIT.”

    For all of Gov. Brown’s talk about spending cuts and “fiscal discipline,” his budget actually forecasts a 5% increase in state spending, rising from $93 billion in 2012-2013 to $97.7 billion in 2013-2114. If one adds in all the other spending that is not included in those numbers (nearly $41 billion in special funds and over $7 billion in bond funds) the state is actually spending over $145 billion in 2013-14, not the $97.7 billion we were told.
    [sleeping]

    http://www.ebudget.ca.gov/2013-14/Enacted/agencies.html

     
  • Eric Barrow posted at 1:41 pm on Mon, Dec 16, 2013.

    Eric Barrow Posts: 1490

    Sounds like Joe is not that happy about the progress California has made. Maybe Joe bailed to early. For the record the 3.4 million that left the state is over the last two decades something Joe fails to disclose. On an annual basis that's .5 % thats right a half a percent of the people leaving I think we can all agree that one California can spare is people.

     
  • Christina Welch posted at 11:21 am on Mon, Dec 16, 2013.

    Christina Welch Posts: 322

    I think you will have your wish, John, seeing how the Democrats have a supermajority in both houses now, and will probably hang onto it for awhile. The typical partisan blame game of politics is now a moot point here in Cali 'cause the Democrats can pretty much do whatever they want without Republican opposition. I certainly hope they will prove to be able to solve our state's woes.

     
  • John Lucas posted at 8:32 am on Sat, Dec 14, 2013.

    John Lucas Posts: 2730

    Yes, California has come a long way and if we can keep the Republicans from having any power there is no doubt we can solve any problems in the future.

     

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