California has been Exhibit A for the fiscal upheaval that has rocked states throughout the recession. Year after year, California officials reported bigger and bigger deficits and sought to respond with spending cuts that left the state reeling.
So it was something of a moment when a jaunty Gov. Jerry Brown strode before cameras here on Thursday to present his budget for 2013-14.
“The deficit is gone,” Mr. Brown proclaimed, standing in front of an
array of that-was-then and this-is-now charts that illustrated what he
said were dramatic changes in California’s fortunes.
“For the next four years we are talking about a balanced budget,” he
said. “We are talking about living within our means. This is new. This
is a breakthrough.”
Mr. Brown was not just talking about a balanced budget. He projected
that the state would begin posting surpluses starting next year, leading
to a projected surplus of $21.5 million by 2014, a dramatic turnaround
from the deficit of $26 billion — billion, not million — he faced when he was elected in 2010.
The change in fortunes reflected cuts that were imposed over the past
two years, a temporary tax surcharge approved by voters in November that
expires in seven years, and a general improvement in the state’s
economy.
Mr. Brown’s news was hailed on both sides of the political aisle. “This
is a proposal that clearly shows California has turned the corner,” said
John A. PĂ©rez, a Democrat who is the State Assembly’s speaker.
Connie Conway,
the Assembly’s Republican leader, said it was “good news for taxpayers
that the state has made progress in getting our financial house in
order.”
Two
years ago Kansas embarked on a remarkable fiscal experiment: It sharply
slashed income taxes without any clear idea of what would replace the
lost revenue. “Look out, Texas,”
proclaimed Gov. Sam Brownback.
But Kansas isn’t booming — in fact, its economy is lagging
both neighboring states and America as a whole. Meanwhile, the state’s
budget has plunged deep into deficit, provoking a Moody’s downgrade of
its debt.
There’s
an important lesson here — but it’s not what you think. Yes, the Kansas
debacle shows that tax cuts don’t have magical powers, but we already
knew that. The real lesson from Kansas is the enduring power of bad
ideas, as long as those ideas serve the interests of the right people.
If Rauner wins, I give him one term.
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