Fundamentals

Yesterday four NFL teams vied for a shot at the Super Bowl. Because the Patriots and New York Giants won their respective contests they’ll be going to Indianapolis. For the Ravens and the 49ers the season is over.

These four teams even the two losers didn’t get this far because they were weak. And while the winners showed some creative plays football at this level requires more than anything a mastery of the fundamentals.

In governance mastery of the fundamentals is likewise critical.

In his annual State of the State address Governor Brown had every opportunity to discuss the fundamental problems facing California. These include a $15 billion budget deficit $500 billion in unfunded pension liabilities a tax and regulatory climate that drives businesses away wasteful and ineffective use of our tax dollars and a political system unduly influenced by special interests — most notably the public employee labor organizations.

But like an eight-year-old Pop Warner quarterback who wants to try a “flea flicker” or a Statue of Liberty play before he knows basic passing and running techniques Governor Brown seems uninterested in — and even bothered by — the fundamentals of governance.

Take high speed rail. Beset with problems ever since voters approved a $10 billion bond in 2008 Brown pleaded with legislators in his speech to approve a business plan for the project so construction could begin — a plan so bad that the non-partisan Legislative Analyst’s Office and a peer review group hired by the High Speed Rail Authority itself have derided it as illegal and not feasible.

Another fundamental of governance is to insure that expenditures do not exceed revenue. Although California is showing signs of a nascent recovery (which was helped by a reduction in taxes due to voter rejection of Proposition 1A in 2009) Governor Brown wants to increase taxes to close the budget gap. This despite the fact that California already has one of the highest tax burdens in America.

Raising taxes in a high tax state is even less defensible given that Governor Brown actually envisions an increase in spending by seven percent.

The fundamentals of governance also dictate that state leaders keep their expectations realistic. Governor Brown’s tax hike plan requires voter approval. However given that California voters have rejected the last seven statewide tax increase proposals it is likely Brown’s expectation will remain unrealized.

To his credit Governor Brown did spend some time in his State of the State Address on pension reform. But talk is cheap. While his plan contains many of the substantive reforms Republicans have sought for years the real question is whether he is willing to expend political capital to achieve those reforms. Few Sacramento insiders believe that the labor controlled legislature will give Brown real pension reform. So rather than focus on raising campaign funds for his tax increase initiative would it not be a return to fundamentals by taking the issue of pension reform directly to the People?

Another fundamental of governance is to ensure that businesses which comprise a major component of your tax base are treated fairly so they are not lured to other states offering a less hostile tax and regulatory climate. Given that CEO magazine has ranked California as the 49th worst place in the country to do business this is not an academic concern.

Brown’s solution is a restructuring of the Office of Business Development saying that businesses large and small now had an “effective champion to navigate the state’s plethora of complex laws and regulations which can discourage investment and job creation.” This sounds good but would it not be a more fundamental fix to actually address the “plethora of complex laws and regulations” that are the problem in the first place?

California’s fundamental problems are legion. But instead of confronting them head on Governor Brown chooses to call his critics “declinists” who “fantasize that California is a failed state.” But it is not the “declinists” who rank California as having the worst credit rating — it is credit rating agencies who have no political ax to grind. It is not the “declinists” who are relocating capital outside of California — it is major business interests who would actually like a reason to stay in California. It is not the “declinists” who rate California’s system of governance poorly — it is the non-partisan Pew Center on the States.

Rather than waste time calling his critics names it is clear that Governor Brown should begin to take seriously the fundamental problems facing California. If he doesn’t it will surely become the “failed state” that he thinks some of us fantasize about.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.