This month Californians elected a new governor and I wish Governor-elect Gavin Newsom much success because his success as governor means our success as a state.
That being said, Governor-elect Newsom will face some very different challenges than his predecessor, Gov. Jerry Brown.
When Brown took office, the state was mired in debt. Today, despite taxes that are too high and an overly zealous regulatory environment, the national economy is humming and the state’s coffers are full.
And whereas this is definitely good news, if history is any prediction of the future, the Democrat-controlled Legislature will introduce a myriad of permanent spending proposals that could ultimately threaten the state’s fiscal integrity when the next recession hits.
Historically, the last governor facing such a bountiful state treasury was Gray Davis. In 1999, when Davis followed Republican Gov. Pete Wilson into office, California had a $16 billion budget surplus.
When Davis was recalled five years later, the state was $38 billion in the red.
What happened?
First, the dot.com bubble burst and the country went into recession.
But even more importantly, while the state was booming, Davis expanded a host of permanent spending programs that, once the economy went south, literally threatened to bankrupt the state and municipalities across the state.
So let us celebrate our return to fiscal health, but let us also keep an eye toward fiscal responsibility as well, because a slump in the state’s economy will significantly impact the state’s finances.
California’s tax structure is particularly volatile because it relies on high-income earners and high sales taxes. A 2018 Legislative Analyst Report estimated that even a moderate recession could lead to a $40 billion budget deficit.
So Governor-elect Newsom, now would be a good time to learn to “Just Say No” to wasteful spending.
As Gov. Brown put it, “We’re [fiscally] well positioned, but if the next governor doesn’t say ‘no’ at critical moments, things will get worse.”
Some suggestions for our new governor:
1) High Speed Rail. Derail the train! Perhaps the most wasteful project in our state’s history. A true boondoggle that no one will ride, even if it is one day completed, which it never will be. Cut our losses, governor, and let’s move on.
2) Solar panels on every house. A good idea whose time has not yet come, as it is economically not feasible for first-time home buyers as it simply makes housing more unaffordable. Eliminate the mandate.
Instead, let’s repurpose funds to programs and services average Californians expect and deserve:
1) More funds are needed to develop a stable water supply for people, agriculture and the environment.
2) Let’s keep our promise to the disability community who witnessed their funding slashed during the “Great Recession,” but haven’t had their funding restored during our current economic boom.
3) And, let’s stop just paying lip service and actually increase funding for education. Governor, let’s use Proposition 98 (which guarantees K-12 funding) as a floor and not a ceiling for our education spending!
Finally, if there’s one Jerry Brown legacy our new governor should continue, it is the five-year budget planning process.
Brown saw the revolving door of surpluses/deficits play out through his two terms and those of his predecessors and used five-year planning to force people to realize the ongoing fiscal obligations that new programs or benefits create.
One of Gov. Brown’s final warnings that our new governor-elect should heed: “There’s no predator for this species of budgetary activity, except the governor.”
As we enter the next legislative session I will work with the new governor when I can and oppose him when I must.
But, my goal will always be to be fiscally prudent with the taxpayers’ money, and to do what is in the best interest of the people of California.
Sen. Scott Wilk represents the state’s 21st Senate District, which includes most of the Santa Clarita Valley.
