Today’s LA Times has an interesting series of op-eds by historians and authors examining how past governors dealt with budget crises. It’s an interesting look not only at how those governors all helped build the prosperous state that we’re living off of today, but also how the real problem with the budget isn’t a lack of pragmatism or deal-making, but ideology. And since the articles were commissioned by California Backward they are particularly important in shaping how we will respond to this crisis.

The profile of Pete Wilson by Greg Lucas and Ronald Reagan by Lou Cannon both argue that pragmatism and a willingness to deal is the key to budget success. Lucas’ portrait of the contentious 1991 budget negotiations is designed to make us wistful even for Pete Wilson’s leadership (if you forget 1994, that is). Wilson understood that tax increases were going to be necessary to balance the budget AND to get Democratic support, so he outflanked them by proposing his own increases and then spending the summer cutting the deals necessary to get Dems to agree and to turn enough Republicans, one by one, to his view.

Cannon’s portrait of Reagan emphasizes similar qualities – that despite their “novice amateur” abilities, Reagan and his advisors knew that a tax increase was necessary to balance the 1967 budget and avoid crippling cuts. Reagan did so, and therefore helped continue California’s remarkable 20th century economic expansion by supporting the government services that growth depended on.

What both these portraits miss – alongside Jim Newton’s profile of Earl Warren, an unconvincing effort to see Arnold as a latter-day Warren, is the role of ideology in the budget. Warren, Reagan and Wilson were able to negotiate budget solutions because they did not define their Republicanism by a virulent anti-tax conservatism – even in Reagan’s case, and Reagan had spent the 1960s leading the right-wing takeover of the California Republican Party.

They also governed at times when Democrats had spines. This was particularly true in 1991, where Democratic intransigence and demands for a better deal were all that forced Pete Wilson to propose and stick to his tax plans. Most of those taxes survived until the late 1990s, when led by Tom McClintock, the state legislature – including Democrats – voted to spend that tax money on foolish and short-sighted tax cuts rather than putting it in a rainy day fund or investing in infrastructure. During Arnold’s term Democrats have caved in to his demands so often that Arnold no longer sees Democratic demands as worth taking seriously.

The ascension of Tom McClintockism within the Republican Party goes to the heart of the budget matter, showing that it is about ideology, not deal-making. How can today’s Republican cut deals on taxes when the Howard Jarvis Association, CRA, and other right-wing groups are ready to destroy a Republican legislator’s career for doing so? The only Republican not in thrall to those folks, Arnold Schwarzenegger, is instead in thrall to Milton Friedman’s shock doctrine theories.

So it was very welcome to read Ethan Rarick’s profile of Pat Brown. Rarick is the author of the excellent California Rising: The Life and Times of Pat Brown. In his profile Rarick refuses to emphasize Brown’s leadership qualities and instead focuses on the underlying ideological and structural contexts. He was the only author to mention the 2/3 requirement. And he understood the importance of ideology:

More important than procedural changes, however, are ideological ones.

In Brown’s day, the country remained in the grip of the so-called New Deal consensus, a mood far more receptive to the idea that government played a constructive role in our society and had to be amply funded. Brown used to say of himself, “I’m a big-government man,” a phrase that would nowadays be uttered by no politician, left, right or center.

It’s true that Republicans tended to be more skeptical of government than Democrats, but they were neither unanimous nor intransigent on the point….

So I’m quite sure I know what Pat Brown would do if he were governor today, or at least what he would want to do and try to do. He would trumpet government’s positive role, insist that those who benefit the most from our society should pay the most, and set about enacting policies to create a public sector that was funded both fully and fairly. In short, he would raise taxes, especially on the rich.

But the real question is not what Pat Brown would do. Given the differences in ideological climate between his day and ours, the real question is: Would we let him?

It’s an excellent set of points he makes. I wonder though if California Backward will even listen to him. A group composed of centrist high Broderists is much more likely to prefer a call for more deal-making that will nevertheless produce conservative solutions to a rousing defense of the policies that made California great, and an attack on the conservative policies that have produced this budget crisis.

The 30th anniversary of Prop 13 has brought out a raft of commentary in the state media. This commentary tends to split on whether Prop 13 benefited or hurt the state – as if there is still any doubt that it was a disaster – but it rarely examines some of the underlying assumptions of Prop 13, and even more rarely does it explore the deep inequality it has enshrined into our state.

Much of this stems from a fundamental misunderstanding about what Prop 13 was and what it did. Voters convinced themselves it was a populist revolt against rising property taxes. They believe this so fervently that they act as if they willed it into existence.

In fact Prop 13 was an extremist attack on the very practice of state government by a group of far-right activists, with property taxes used as a convenient cover. Those who voted for – and who say they would vote for it again – still seem to believe its primary purpose was to protect homeowners, when its true goal was to destroy public services by starving government of revenue – otherwise why include the 2/3 rule? Why give commercial property the same protection as homeowners?

Further, there seems to be widespread misunderstanding about the level of taxation – especially property taxation – in California. California ranks 38th in property taxes. Somehow homeowners in the 37 states ahead of us haven’t been losing their homes to taxes. One consequence of Prop 13 was a shifting of taxation to sales and income taxes – sales taxes are regressive and income taxes can be volatile. Prop 13 is therefore directly responsible for California’s regressive and unstable budgeting. No Prop 13, no structural revenue shortfall.

Dan Weintraub argued that Prop 13 didn’t devastate government finances. But does he even read his own paper? Peter Schrag pointed out in the SacBee last week that Prop 13 did have that devastating impact:

California’s per pupil school spending, which was among the top 10 states in the 1960s, is now among the bottom 10. Proposition 13 alone is not responsible, but along with two major court decisions that preceded it, it helped decouple school funding from the local tax base and thus undercut voter incentives to fund education generously, as it had been in the generation after World War II. Our roads, once a national model, are an embarrassment. …

California once had a communitarian ethic. That’s been turned into a market ethic. It once did serious planning for the future. For now, that’s a nearly forgotten hope.

Prop 13 helped create a “homeowner aristocracy” – where those who bought their homes before 1976 are given preferential treatment and tax shelters while everyone else has to pay market rates. Some argue that those on fixed incomes deserve protection from rising tax bills, but it is difficult to have sympathy for this when the method of protecting them – Prop 13 – has produced a generation of inequality that leaves most folks under 35 unable to ever own a home in California.

Why should some homeowners get government subsidies and others do not? Why is it that under Prop 13 we protect some homeowners at the expense of future generations? If we are to right the state’s finances, provide economic security for all Californians, deal with the energy price and global warming crisis, and have a competitive 21st century economy, we need to reexamine our priorities, and be willing to move past obsolete 1970s faux populism.

“Only” out of balance by about $700 million?! (to be fair, $699 million) Yeah, right. Let’s take a look at the gimmicks

Add on $330 million for the prison guard contract offer (the LOWEST estimate available for their salary increase)

Add on $190 million for the overstatement of property tax revenues (per the LAO warning)

Add on $184 million for the overstatement of tribal gaming revenues (ditto)

Add on $603 million for the failure to account for the May-June shortfall (yes, we were $603 million short, but this budget still assumes it was accounted for)

Add on $300 million for the postponement of reimbursements to local governments for mandates (we owe the money, the current budget just pushes them into next year’s budget in order to avoid paying it this year)

Add on $357 million for the acceleration of tobacco securitization funds (the tobacco securitization funds are supposed to pay for the 2008-9 CTA settlement costs, but instead are being accelerated into this budget to pay for general fund spending)

Add on $250 million for the theft of the Williams School Facility Repair funds (we’ll need to repay the ‘loan’ in future years)

Add on $260 million for the EPSDT prior year deficiency deferral

That comes to a $3.173 billion deficit

As if that wasn’t bad enough. We have $2.865 billion  on very shaky ground:

$709 million from escheated property DEFYING A COURT’S ORDER

$200 million for the “limited liability” court case  (state lost the case, will likely lose the apppeal, and LOWEST estimate is $200 million)

$176 million in unallocated reductions (assuming Arnold will make $176 million in unallocated reductions when he’s ignored most unallocated reductions in past budgets)

$300 million for the Medi-Cal FPACT waiver (likely NOT to be renewed this year, so the state will have to make it up)

$980 for the EdFund sale (has not gotten the federal approval it needs, has never been appraised, and real value is likely 1/5 of that)

$500 million for the CalSTRS court order (court order says state has to pay $500 million of $558 million adverse judgment due to its failure to fund CalSTRS. Likely to lose the appeal and will have to make this payment during the budget year)

That is about $2.865 billion, making a MINIMUM of a $6.038 billion deficit

We have a current reserve of about $3.4 billion. We need a LOT more than $700 million in cuts. We should do about $2.9 billion more in cuts, in order to have more than the bare minimum