Jerry Brown's state won't be what it was politics

Lawmakers applaud Gov. Jerry Brown as he enters the Assembly Chambers to give his State of the State address at the Capitol in Sacramento, Calif., Thursday, Jan. 24, 2013. Brown delivered a State of the State address that laid out the legacy-building ideas he will work on during the second part of his term, including K-12 education reform, high-speed rail and the largest upgrade to the state't water-delivery system in decades. (AP Photo/Rich Pedroncelli) less Lawmakers applaud Gov. Jerry Brown as he enters the Assembly Chambers to give his State of the State address at the Capitol in Sacramento, Calif., Thursday, Jan. 24, 2013. Brown delivered a State of the ... more Photo: Rich Pedroncelli, Associated Press Photo: Rich Pedroncelli, Associated Press Image 1 of / 1 Caption Close Jerry Brown's state won't be what it was 1 / 1 Back to Gallery

With the state budget balanced for the first time in years, Gov. Jerry Brown is roaring that "California is back," painting a rosier future for California with gauzy predictions of its "rendezvous with destiny."

But beneath the governor's flowery evocations of "bold pioneers" who followed "every failure with an even greater success," Brown tacitly acknowledged during his State of the State speech last week that California's present isn't what it once was.

Before they rendezvous with destiny, Californians must confront their stark new reality.

"What everybody is struggling with now is how to set expectations," said Mark Baldassare, president and CEO of the nonpartisan Public Policy Institute of California.

"The governor is trying to find a way to create expectations and keep a lid on them. And that's tough to do," Baldassare said. "Economically, we're not at a point where we can take care of all of these needs."

'An era of limits'

The booming California of the 74-year-old Brown's youth in San Francisco, or of his first stint as governor in the 1970s, doesn't exist. Then, payrolls in the state were growing at roughly 4 percent a year. Now, more than 1 in every 5 California children lives in poverty. In Fresno County, 35 percent of kids are poor.

"That is the new reality. We are in an era of limits," said Edward Leamer, a professor of management, economics and statistics at UCLA and director of the UCLA Anderson Forecast, an economic barometer that has studied the state's payroll growth. "Jerry Brown is the first governor we've had who has to deal with the fact that over a whole decade there has been no growth.

"We cannot let loose another burst of spending the way we did in the Gray Davis era (1999-2003) because the revenue suddenly seems like it's there. It isn't there," Leamer said. "The Gray Davis era had a kind of a false invocation of the California Dream because we had that Internet rush."

California's reality now includes 6 million residents who live in poverty, more than at any time in its history. While the state's general fund may have stabilized, California must cover $27 billion in debt from past years and owes billions in pension obligations to state employees.

Nearly 10 percent of the state's residents remain unemployed, the third-highest rate in the country.

Brown and the Legislature were able to balance the budget because voters passed $6 billion worth of tax increases in November. The poor have made the biggest sacrifices on the altar of the budget's bottom line, as the state has cut $15 billion in health and welfare benefits to low-income Californians since 2009.

While Brown's budget this year doesn't include any additional cuts to health and welfare programs, the new reality means many poor Californians won't be getting additional help soon.

"We've cut a lot of benefits in the past few years, and we know that, unfortunately, a lot of those benefits aren't coming back," said Michael Herald, legislative advocate for the Western Center on Law and Poverty in Sacramento, which advocates for low-income Californians.

Rebounding from recession

Brown acknowledged as much during his Thursday speech, saying, "It is cruel to lead people on by expanding good programs, only to cut them back when the funding disappears. That is not progress; it is not even progressive. It is illusion. That stop and go, boom and bust, serves no one. We are not going back there."

Stephen Levy, an economist who directs the Center for Continuing Study of the California Economy in Palo Alto, said: "We are still rebuilding from a very deep recession. Our ability to put back money into health and welfare will depend on the success of the economy."

Should the economy pick up, Levy said, "I suspect that there will be some rebuilding of those programs, but (the health programs) are not going to go back to the levels they were, simply because the caseload and the costs will continue to rise. It's a health-care-cost and aging-population new reality."

While Brown wouldn't commit to patching the holes torn in the public's safety net, he did support big projects such as his plan to build tunnels to ship water around the Sacramento-San Joaquin River Delta. He compared the cost of the water proposal to the London Olympics, which "lasted a short while and cost $14 billion. But this project will serve California for hundreds of years."

Still, some Democrats in the Legislature hold out hope of squeezing some additional funds for the poor from this economic uptick.

Senate President Pro Tem Darrell Steinberg, D-Sacramento, said that if there is any new revenue, one-third of it should go to paying down the state's debt, another third toward a rainy day fund, and the remaining third to backfilling social service and education programs that have been cut.

"The poor have taken the harshest cuts over the past few years," Steinberg said.

Aiding low-income students

Brown is eyeing a different way to aid the poor. He's proposing changing how public education is funded in California by redirecting "supplemental funds," as he calls them, to low-income districts.

"Equal treatment for children in unequal situations is not justice," Brown said.

Ann O'Leary, who advocates for children and families at the Center for the Next Generation in San Francisco, applauded Brown's proposal for helping low-income students.

But in California's new economic reality, "There are two pieces of that puzzle," said O'Leary, who is vice president at the Center. California also needs to expand its social safety net, "and he didn't take that step."

Republican Assembly Leader Connie Conway, R-Tulare, liked Brown's focus on fiscal responsibility, which had him "channeling his inner Republican," she said.

Then again, the optimism of any State of the State speech usually doesn't have a long shelf life.

"Everybody is upbeat and positive today," Conway said on the floor of the Assembly after Brown's speech. "But then reality gets in the way down the road."