Dan Walters

Opinion: California Democrats may clash on spending

It’s a new year and the Capitol’s Democrats should be singing Franklin Roosevelt’s old campaign song, “Happy Days Are Here Again.”

Two months ago, voters confirmed the party’s dominance of the Capitol, renewing its hold on all statewide offices and giving it strong majorities in the Legislature and the state’s congressional delegation.

Yes, Republicans did pick up a few legislative seats, erasing Democratic “supermajorities” in both houses, but the practical effect will be marginal.

Democrats can – if they can agree among themselves – enact just about anything they desire. A recovering economy is giving them the extra revenue to do what most like to do most, which is to spend money.

That said, the year will not be free of political friction because, in fact, the Capitol’s Democrats are not of one mind.

Gov. Jerry Brown, who will begin his fourth term Monday, still defies easy categorization, but most of the time occupies the middle of the ideological road with most Democratic legislators to his left and Republicans to his right.

That’s especially true when it comes to fiscal issues, which always loom the largest because, fundamentally, government exists to extract money from some of the governed and give it to others.

Even with the economy generating billions of extra dollars, there are more supposed needs, or at least demands, than revenue.

Brown has preached prudence – setting aside money in “rainy day” reserves, spending down debt and looking askance at new spending. And voters endorsed that approach by giving him a landslide re-election and passing Proposition 2, his reserve measure.

But advocates for some budget categories that were hit hard during the Great Recession are beating the drums for recompense now that the economy and revenues are improving.

Brown will be clashing with the University of California, which is threatening to raise tuition if Brown doesn’t cough up more money. And he’s also facing demands from advocates for the poor to ease the “retrenchment” he’s imposed on welfare grants, in-home care and other social and health services.

The flashpoint may be Brown’s declared intention to attack one of the many long-term debts that the state has amassed over the years – health care for retired state employees.

The “unfunded liability” for that benefit is now $72 billion, Controller John Chiang says, and even a long-term approach to it would require the state to spend several billion dollars more each year, on top of what it already allocates.

Brown contends – accurately – that the budget is not truly balanced until it addresses long-term, off-the-books debts such as unfunded liabilities for pensions and retiree health care.

He and the Legislature have addressed pensions, but the health care issue will be a test of his will.

Call The Bee’s Dan Walters, (916) 321-1195. Back columns, sacbee.com/dan-walters. Follow him on Twitter @WaltersBee.