Jerry Brown Plays the ‘Frugal Adult’ While Quietly Spending by Carson Bruno.
It’s budget time again in Sacramento. And as is his wont, Governor Jerry Brown has attempted to signal a tone of frugality. While announcing the May Revise last week, Governor Brown confidently stated that “Cuts are coming over the next few years, and they’ll be big.” Why the warning? Because despite Brown’s much-touted “California Comeback,” his budget still has a $3.3 billion shortfall – smaller than previous deficits, but still notable given the state’s overall good economic health.
Importantly, this tone of frugality is more perception than reality. More political posturing and spin than math. Governor Brown and his team have convinced Sacramento that he is the “adult in the room” holding the line against out-of-control spending. But the numbers suggest otherwise.
Related: The Grass Gets Greener: New Data Tells Old Story of Public-Employee Greed by Steven Greenhut.
Yet another prominent study highlights the depth of California’s and the nation’s pension crisis. The Pew Charitable Trusts recently released a report on the “state pension funding gap” — i.e., the $1.1 trillion-dollar divide between the assets governments have set aside and the amount of liabilities they have amassed to pay for those shockingly generous public-employee pensions.
It should surprise no one that California’s systems are woefully underfunded, and that the nation’s most populous state has by far the largest overall pension liabilities in raw numbers. We’re in worse shape, percentage-wise, than some other union-dominated blue states such as New York (which has done a good job
funding its pensions), but in better shape than others. These debts keep growing everywhere, though, and piddling investment returns magnify the problem.