Since President Richard Nixon met with Mao Zedong, the term “go to China” has been synonymous with a political leader who has an indisputable record on an issue moving against that issue without losing political standing. As a staunch anti-communist, only Nixon was able to open relations with the communist country.
Jerry Brown, in his fourth and final term as governor, finds himself in a similar position. With an unquestionable liberal record – most notably supporting public employee unions and tax-and-spend policies – only Brown can “go to China” to reform California’s deficient budget, tax and pension systems.
The governor’s position is further strengthened by his $20 million-plus campaign war chest, a political acumen second to none, and a deep institutional knowledge of both California’s policy and governmental operations. And based on Brown’s inaugural and State of the State speech on Monday, he might have that desire.
During his 22-minute address, Brown declared that “the financial promises we have already made must be confronted honestly so that they are properly funded” and that “California, since the beginning, has undertaken big tasks and entertained big ideas.” Both of these statements suggest he is willing to address California’s most daunting challenges.
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Yet, actions speak louder than words.
While Brown stated that “we have now taken steps to deal with the unfunded teachers’ pensions and those of the public employees,” the actions he spoke of will do little to improve the long-term viability of the ballooning CalPERS and CalSTRS obligations.
Brown’s plan for the California State Teachers’ Retirement System places the burden, unnecessarily so, on school districts. The California Public Employees’ Retirement System has already managed to undo a central component of the pension reform passed in 2012.
Hence, these past pension experiences suggest that Brown’s seemingly bold retiree health care proposal – asking state employees to pre-fund it – could be short-lived.
Furthermore, Brown rightfully noted that California “must also deal with long-standing infrastructure challenges.” Indeed, the American Society of Civil Engineers’ 2012 infrastructure report card gives California a “C,” noting that the state’s infrastructure investment needs now top $65 billion. However, the governor’s infrastructure investment plan calls for just $57 billion over five years, of which 45 percent is earmarked for the high-speed rail project.
While Brown’s speech did note that the state’s budget situation is precarious and that he’ll work to address retiree health care liabilities, he did not mention the need for tax reform at all.
These three issues are all connected; California’s capital-gains-dependent tax system creates a volatile budget and its unsustainable pension obligations threaten the budget’s bottom line. And together, these three issues, if unaddressed, threaten all government services. But none will be simple to fix, nor will small fixes suffice.
During his third term, Brown often took a back seat in forming policy. On pension reform, he initially proposed bold actions only to relent to around-the-edges reforms. It wasn’t until the 11th hour that he got involved in the water bond negotiations.
To fully address California’s urgent structural problems, the state needs a leader who has the respect of his own side and who will go against his allies and demand change. Jerry Brown has the tools to “go to China” and for the sake of California’s long-term fiscal security, here’s hoping that he takes the trip over the next four years.
Carson Bruno is a fellow at the Hoover Institution who studies California’s politics and policy.