T Nation

Arnold as a Governor


I'm from Canada, so I didn't follow Californian politics too closely. I was wondering how did Arnold do at the head of the state? There's no such things as star-rated reviews for politician, but objectively, did California get better under his reign, or worse, or it didn't change much?


California got much worse while he was governor, but it didn't really have much to do with him. The state legislature here is totally out of touch with reality and taxes and spends everything in sight.

However, right now California is experiencing a rare surplus in revenue. Gov. Jerry Brown, a rare fiscally-conservative Democrat, says the surplus is roughly $1.5 billion, while the State Assembly claims it's more than $4 billion. The surplus is due to a large influx of capital gains tax revenue after a shitload of people in the state sold off a bunch of investments right before the Bush-era tax cuts expired. It's also due to a bunch spending cuts Brown pushed for and a slight, temporary bump in the sales tax.

Brown wants to basically stash the cash away somewhere and just hold on to it as a buffer against future drops in revenue, and the Assembly wants to use it to fund some of the programs that were cut in the last two years. Jerry Brown has been a pretty good Governor this time around, but I think it's all going to hinge on whether he can get the Assembly to pocket the cash rather than turn around and spend it. Unlike the Assembly, Gov. Brown is smart enough to understand that the source of the bulk of that money, essentially a windfall in the form of increased capital gains taxes, is not a permanent new influx that can be counted on again in the future.


Arnold was horrible as a governor, he gave unions everything they wanted, then came screaming for more tax money to pay for it.


I like this post.


This is, to a degree, perpetuating a mythology.
Arnie was a bad actor and worse governor, but Jerry is a true showman. Here are some facts to chew on (from the Union Tribune June 1):

"There is a basic problem with recent news accounts and analyses that note the gains in state tax revenues and conclude California is back on firm ground financially. The claim is just not true. And itâ??s a myth that will promote new rounds of irresponsibility and denial in Sacramento.

Yes, the Legislative Analystâ??s Office says revenue is running $3.2 billion higher than expected for this fiscal year. Yes, a likely result is that schools will get more money, some state services may be restored and perhaps the wave of tuition hikes at state colleges will stop.

But California is far from being in good fiscal health. When Gov. Jerry Brown talks about reducing the â??wall of debtâ?? he inherited upon taking office three years ago, he leaves out huge problems â?? problems that Sacramento has either not addressed or barely addressed:

â?¢ $87 billion in unfunded liabilities for the California Public Employeesâ?? Retirement System. The $87 billion would be far higher if not for the rosy investment assumptions used by CalPERS.

â?¢ $73 billion in unfunded liabilities for the California State Teachersâ?? Retirement System, a sum that increases a staggering $6 billion a year. The $73 billion would be far higher if not for the rosy investment assumptions by CalSTRS.

â?¢ $64 billion in unfunded liabilities for health insurance coverage guaranteed to retired employees.

â?¢ $8.2 billion in money borrowed from the federal government to replenish the stateâ??s broke unemployment compensation fund. California only pays the interest on the debt.

This list could be longer. There are other substantial debts and liabilities. And there are extremely costly future financial obligations, starting with the state bill for Obamacare after initial federal subsidies are phased out and regulatory edicts on water pollution.

But our point is plain. The state of California is awash in red ink, and even the red ink that is acknowledged is camouflaged with accounting gimmicks.

This ugly picture is why the governor is right to push back at Democratic lawmakers who want to spend any unexpected revenue instead of putting it in reserve. This ugly picture is why the governor is wrong to offer happy talk and go along with media analyses that depict California as on the right track.

We wonâ??t be on the right track without much more sweeping pension reform to contain the coming calamities at CalPERS and CalSTRS. We wonâ??t be on the right track until someone offers up a realistic plan to pay for the health coverage of retired public employees. And we wonâ??t be on the right track unless we have a sustained growth in revenue driven by a broadly healthy private-sector economy, not by bubbles in real estate or technology.

This is what Jerry Brown should be telling the public instead of taking victory laps for a victory that doesnâ??t exist."


What myth am I perpetuating? I said in plain English that Brown understands that this gain in revenue is not a permanent thing that's coming from a dependable source. It's a one-time influx. He knows that. The victory laps are nothing more than political maneuvering. The California State Assembly is so entrenched and so beholden to massive spending that Brown HAS to grandstand and all that when he gets any sort of victory like this so that the public puts pressure on the Assembly to go along with him. Brown fully realizes that there major, major problems with the pension funding in this state.

But he can't come right out and say that, yet. If he does, all he's really saying is that the public, all the people who are collecting those pensions (especially the ones who are double-dipping by collecting retirement from one source while working as a public employee in another area, like retired firefighters teaching fire technology classes at public community colleges) are part of the problem. Those people don't want to hear that shit because they don't want to give up their piece of the pie.

So what does he have to do instead of blaming the problem on the public? He has to publicize any little victory he can so that it gives him more credibility in the eyes of the public when he goes after the next-best target to blame the state's fiscal crisis on: the Assembly.


The increase in tax revenue is a one-time hit, rich people getting soaked, and Prop 30 being made retroactive as well.

California is about $700 Billion in the red, over a Trillion if you add in High Speed Rail.

The unemployment rate is dropping only because more people are dropping out of the labor pool.


Coop is right, on all counts.

Brown is somewhat reasonable, but the entire state legislature is entirely bought and paid for by Unions. With a Democratic supermajority, Brown is as useless as a Republican, as any veto he gives can be overridden.


"To a degree," I said, a Jerry Brown myth is being perpetuated. For emphasis, this one: "This ugly picture is why the governor is wrong to offer happy talk and go along with media analyses that depict California as on the right track. "

Just for emphasis.


I agree with your basic point, although I think the myth is not a "Jerry Brown myth" but rather a myth that is, in part, being perpetrated BY him and not ABOUT him. It's a subtle difference, sure. But while he helps further the myth that the state is on significantly better financial footing, I highly doubt that he really thinks this is the case. He knows how to drive the car and he knows how to repair it when it breaks down. It's a matter of getting the wacky California legislature and the people who are currently benefiting from the state's dismal finances to go along with his repairs.