The Volcker Alliance, a foundation devoted to rebuilding public trust in government at the federal, state and local levels, issued a report yesterday on state finances.
While conceding that “It remains too early to tell if [California’s] fiscal culture has changed permanently,” former Fed chairman Paul Volcker singled out the Golden State as a bright spot. From a piece in the Times, "Volcker Sees Hidden Peril in State Budgets" (my emphasis):
In the past [California] engaged in a number of budget gimmicks, the report said, and its situation became so dire during the financial crisis of 2008 that for a time the state had to pay its workers with scrip because it did not have the cash.
But when California’s current governor, Jerry Brown, took office in 2010, he made hidden costs an issue, calling the pile of deferred spending and unpaid bills a “wall of debt” that had to be addressed.
He managed to make changes that have lowered the “wall of debt” to $24.9 billion from $34.7 billion. Notably, he persuaded California’s tax-averse voters to approve a tax increase through a ballot initiative. California’s top marginal income-tax rate, 13.3 percent, is now the highest in the nation.
Are you there, Gov. Rauner?