Is California's Deficit Good for Governor Jerry Brown?


Back in January the estimate was that California was in debt -- to the tune of $9.2 billion. In our new normal, that was seemingly palatable news. Now comes less agreeable news, the budget deficit is actually much larger than that. Today Governor Jerry Brown officially announced that the Golden State is facing a nearly $16 billion deficit.

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At the risk of making the understatement of the week, this is bad news. California does not have enough money to keep functioning -- better said, it is dysfunctioning at this level. Depending on your perspective, too little money is coming in or too much money is going out.

What is a Governor to do? Well, there will be more budget cuts. Cuts that were likely inconceivable five years ago are now very much on the table.

But will there also be tax increases? Well, that is up to the voters. Brown, rather rationally and predictably, used his announcement of the new deficit numbers as an opportunity to sell his proposed tax increases. Brown wants to raise the sales tax by a quarter-cent for four years and increase taxes on people making $250,000 or more by between one to three percentage points for seven years. Those proposals will appear on the November 2012 ballot.

I do not mean to suggest that Brown was secretly hoping for larger deficit numbers. But clearly the current situation offers Brown the ability to tell voters that we are in dire straits and tax increases are necessary. What remains less certain is whether Brown will be able to convince the voters. He could not convince our representatives, which is why his tax proposals come in the form of an initiative, not a legislatively initiated measure. We have half a year to find out whether Brown's tax plans will succeed.

Jessica Levinson writes about the intersection of law and government every Monday. She is a Visiting Professor at Loyola Law School. Read more of her posts here.

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