Gov. Brown Urges Caution In State Of State Speech
I am Maureen Cavanaugh. It is Thursday, January 21. Governor Jerry Brown's 2016 state of the state address broadcast live this morning here on KPBS, had the wit and the directness that is Brown's Hallmark as a speaker. The speech spend time on the state's budget and strategies to return California to a solid fiscal footing. The compacted discrete delivered speech also touched on infrastructure, health care and claimant and what the governor called the dynamic nature of California. Joining us is Katie Orr, reporter for KQED. Katie welcome. Hi Maureen. Did there seem, to you be any overall theme to Governor Brown's state of the state address? To me it sounded like he was saying to your house in order. He came out at the beginning of the speech and said he is not going to be outlining any new proposals. Instead, he wanted to focus on following through on the commitments that the state has already made. I think it is kind of interesting, because, he is entering the second year of his last term. He has three more years left in office and perhaps he is looking at that and trying to wrap things up. Make sure everything is wrapped up before he leaves rather than embarking on something new. For the highlights of the speech? What I thought was pretty interesting was that Brown took some time to push back on the notion he is soft on poverty. He has gotten a lot of criticism from social service agencies, particularly those in the development a disabled community. They say they have been left out of budgets for years. In his speech, he took time to list what he thinks are his accomplishments in combating inequality, higher earned income rage. Paid sick leave and more money for child care. You touch on the fact he has been criticized for the idea of taking the surplus that is in the budget this year and saving it instead of spending it on these different programs. Why does he say the state needs to save us money state of spending it? He says frequently that we are past due for a recession. Typical economic recoveries last five years and we are in year seven. That means every session must be right around the corner. He also speaks a lot about how closely California's economy is tied to the stock market. Because we rely a lot on capital gains taxes. The economy takes a turn in the stock market takes a turn, the state would be faced with recession and budget deficits again. There are still issues we need to deal with and be -- he specifically pointed to our crumbling transportation infrastructure. He says there is a $77 billion maintenance backlog of things that need to be done. The state will have to suck it up and pass new taxes or fees to pay for that. That is something assembly speaker, Tony Atkin said she agrees with. How many times do we have to talk about it we have to have a new methodology for how we pay for roads and infrastructure. You can do it today or you can wait and we can see that $77 billion balloon. However, I should say Republicans who aren't needed for any kind of tax increase say they don't think one is needed. There is money in the state budget and we just have to spend more wisely and allocate more money for those repairs. Now Katie Mack, one of the issues is climate. What he say about fighting climate change? That was interesting because climate change took a smaller role in the speech that has in years past. What he did do was really kind of laud California for its progress on combating climate change. Talking about how California has been a leader in the world on this issue. He didn't propose anything new, but he took the chance again to emphasize saving money in our reserves to deal with emergencies like fires and earthquakes when they happen. You already mentioned Katie, Republicans are not too happy about the idea of a tax increase for infrastructure repair. Kind of political atmosphere does Governor Brown have to work with now in Sacramento back It interesting because, even though he is entering the final phases of his long leadership in California -- he is still pretty powerful up here and he's very popular. However, we have a new dynamic where assembly members and senators who are elected can stand that seat for 12 years. Speaker elect, Anthony [ name unknown ] who will be sworn in and Mark could be the speaker for the next 10 years. You see a lot of the legislature potentially pushing back against the governor and his power. So that might be something he is going to have to deal with in the coming years as he becomes more of a lame duck in the legislature gains power. Governor Brown is always a bit of a showman when it comes to getting the speech is. With you like today? It was funny. He opened his speech up by saying he's going to go to the ballot and petition for another term so he can be reelected. He was joking of course. There were a couple of people in the chamber who stood up and clapped and were chanting four more years in the assembly. I guess that speaks to how popular he still is even among lawmakers. I have been speaking with Katie Orr, desk politics reporter for KQED. Thank you very much. You are welcome. More analysis now of Governors state Jerry Brown state of the state address. He outlined and finished business California needs to address in terms of healthcare dollars and infrastructure repair joining me now is that cows are -- Thad Kousser. Thad welcome to the program. Thank you for having me. Is these the state of the state address you are expecting. This is the same approach Jerry Brown has done in his whole second coming in politics. Which is discipline, discipline, and don't ask for much. We have not seen laundry lists of bill after bill that the what Governor. wants. He has focused on one thing -- keeping California's budget in balance. When he first came in, his state of the state speech was only about getting the budget in balance. This one is about keeping the budget in balance because he knows his own worst enemies will be his political allies who want to spend more of the surplus we have. He was trying to stick a very clear claim for why we could be in deficit again and what is booming now and with bus tomorrow. There seem to be a lot in the speech about what California needs to do, but not a lot about how to do it. That strike you as well? Some of it is because the government has seen the legislator look really hard it fixing California's infrastructure. All the snow we need more building and updating of our bridges. The legislator went into special session and didn't come up with a deal. What he said was, the general call to arms, this is a problem we need to fix. He wasn't clear about a solution. He focused more on what the state has accomplished and urged legislators to take a Hippocratic oath of not causing more problems. He said the challenges -- to solve today's problems without making tomorrow's worse. Let's keep going. The governor urged the adoption of financing reform. As if everyone knows what that is. Can you explain what that is? I'm not sure what that is. I think it underscores this was a speech to legislators and to the capital insider community that was claimed -- meeting on Thursday when no one was listening. Was not accidental. He wasn't using soaring rhetoric to speak directly to the public and use his bully pulpit to rally the public for -- favor of a cause. What he was doing was telling legislators what he wanted from them. Don't try to spend all of the new money coming in this year, because we may bankrupt ourselves next year. As I understand it, NCO financing reform has something to do with that billion-dollar problem posed for the healthcare taxes we had a special session of the assembly for and they didn't come up with any answer to it. The other special session that the assembly didn't come up with an answer for, about road infrastructure. Ideology and politics stand in the way. One way or another, the roads must be fixed. What kind of ideology and politics stand in the way of getting this money to fix the roads? The question is should this be based on a new tax, or cutting other grandson tightening belts in solving this problem with existing funding? Should we increase the gas tax? Come up with some other new source of revenue,? That's what they were Ringling on last year. The governor had to take in -- a clear stand in favor of one approach. This year he has called more attention to the problem. And not taking a stand. I didn't see any clear solution -- he says one way or another, the roads must be fixed. That is putting this political football back in the legislature's hands. But not staking a clear position of his own. Now Thad as you have been saying, the governor stressed saving surplus budget revenue. Looking at the last true sessions Coppinger state spending actually accelerated right into the downturn. That's why if you add up the deficits and surpluses during the year 2000 during the year 2020 16, you find the total deficits were seven times as large as the surpluses resulting in painful and unplanned for cuts. The kind of frugality that the governor is talking about is not welcome by some Democrats and totally, not completely welcome why my next guest Steven Bliss, director of strategic communications with the California Budget and Policy Center. Welcome to the program. Thank you Maureen. You think the governor is missing opportunities in his saving of surplus? There's no question the governor's right to be concerned about long-term instability in our state. Nobody wants to see the types of -- cuts we saw in the last recession. There's also an opportunity, given the stronger than expected revenues to put away money on a rainy day fund and pay down debt and do some of the reinvestment that is needed -- given the fact you have child care and welfare to work and other critical services for California individuals and families cut during the great recession. The hope would be that of the governor and Legislature moved towards a budget agreement over the next several months, they get the balance right. Between the important work of saving for a rainy day at also starting to restore key programs that are still operating in a recession era or near recession lows. What are some programs you think the governor should take a second look and dedicate more state taught -- dollars towards? A couple of key ones go toward ensuring families can find and keep employment and retain employment and move up the economic ladder. The governor is interested in ensuring long-term and broad economic growth in our state. Particular ways the governor can be doing more to invest in that goal would be to build back child care, cuts that were made to California welfare to work program called Cal works. These are all key programs that help people find and keep work. When you look at the families that are struggling to make ends meet, the state has been pretty much silent in recent years on what we can be doing to do -- address a housing crisis in California. Looking for investments that can help families, not just find and keep employment, but also make ends meet it -- meet. Those are examples we would point to as opportunities for investment by the governor would balance out some of the savings. That is Steven Bliss, rector of strategic communications of California Budget and Policy Center. Thank you for taking the time today I appreciate it. My pleasure. Thad, we go back to the idea the governor will not be spending all of this money and a large part of that is the references he Making to recession. This seems to be a recurring theme in the speeches he has been making lately. That he say something that we don't ask A couple of weeks ago, when he was talking about recession in his budget projections, I think a lot of us said this is just political strategy. He wants to say if we have a recession, we have to make that cuts. Now the dial was has gone down 1000 points. I think this is a little more possible. There are program by program, you can make rational arguments for restoring cuts made during the recession. The speaker will push for a lot of early childcare education, income equality by putting all children joining kindergarten level playing field. The governors of the King of the budget. He has to work with the legislature and stick in early position and say although sound great, but if we are doing them all, we are setting ourselves up for another boom and bust cycle. The governor is going to have to be at the end of the day, less stingy than he wants to be in less than he appears today. He is putting down a pretty strong marker of what could happen. He doesn't want to see these budget deficits that have taken down the last two governors and have given them low approval ratings. He doesn't want to see that happen to his term.
Gov. Jerry Brown urged fiscal caution Thursday in his State of the State address, calling for lawmakers to beef up California's rainy day fund and pay for long-delayed infrastructure repairs instead of pursuing expensive new programs.
As he did in his budget proposal last week, Brown sought funding for health care and transportation initiatives he previously proposed rather than push for new social programs supported by many of his fellow Democrats. Republicans have opposed his funding plans for those initiatives.
"You are not going to hear me talk today about any new programs. Rather I am going to focus on how we pay for the commitments we have already made," the governor said.
The 77-year-old governor also used his 14th State of the State address to outline the state's "very progressive but volatile tax structure" that tracks a world economy he called profoundly uncertain.
"A slowdown in China or turmoil in Iraq or Syria, or virtually anywhere can send the stock market reeling and put California jobs and state revenues in jeopardy," he said. "The challenge is to solve today's problems without making those of tomorrow even worse."
The Democratic governor also decried wage stagnation he said has plagued many Americans and outlined the state's response that has included an increased minimum wage, stronger wage laws protecting unionized workers and an earned income tax credit.
"We also know that inequality has risen sharply in recent decades," he said. "We've seen the disappearance of many middle class jobs and the growing share of income taken by the top 1 percent and even more so by the top .01 percent."
California has "wholeheartedly embraced the Affordable Care Act," enrolling 13.5 million Californians in Medi-Cal and another 1.5 million in Covered California, he said, calling it an historic achievement that will provide health security to those who could not otherwise afford it.
But those benefits come at a price, he said, noting that total Medi-Cal costs have grown by $23 billion in four years. As a result, he urged lawmakers to build up the state's rainy day fund.
Republican lawmakers responded by suggesting the state can use rebounding revenues to fund programs.
"There was much focus on balanced budgets, but no mention that economic growth is the best way to ensure them in the future," Assemblyman Tom Lackey, R-Palmdale, said in a statement.
Brown is entering his sixth year as governor after previously holding the post from 1975 to 1983. He will leave office after this term, though he joked about using his campaign funds to try to change the state constitution to allow a fifth term.
Brown retains immense political clout, along with at least $24 million in his campaign bank account, which he can use to support or oppose any of a slew of initiatives making their way to the ballot this year.
His priorities include fixing what he called "serious deficiencies" in infrastructure, including state office buildings, levees, parks, universities, prisons and state hospitals. The budget he proposed last week includes using $2 billion of an expected temporary surplus for repairing and replacing aging structures.
He once again urged lawmakers to find a permanent revenue source to maintain roads and bridges that he said now need $77 billion in repairs.
"Sooner or later we have to bite the bullet," he said. "One way or another, the roads must be fixed."
Sen. Jim Nielsen of Gerber, the top Republican on the Senate budget committee, said the state can fund the fixes from existing revenues.
"It does appear that there's going to be additional revenues, particularly for transportation," Nielsen said. "He focused on having to raise taxes for transportation ... We're not going to go along with that part of the program."