After years of fiscal trouble, California’s looking at a budget surplus. We’ll look at how they did it and the lessons there.
Since the financial meltdown of ’08, California has often been the national poster child for bad state finances. Huge fights. Vicious politics. Scary red ink. Bloody cuts in spending on fundamentals. Prisons. Schools.
And then last week, there was California Governor Jerry Brown, front and center, talking rebound. California’s budget deficit, he declared, gone. New money for K-12. A billion set aside for a rainy day. It’s kind of amazing.
This hour, On Point: How did they do that? California’s fiscal turnaround, and lessons – if they’re there – for the country.
Vauhini Vara, covers California politics for the Wall Street Journal.
Joe Matthews, fellow at the New America Foundation. Co-author, with Mark Paul, of “California Crackup: How Reform Broke The Golden State and How We Can Fix It.”
Mark Zandi, chief economist of Moody’s Analytics.
From Tom’s Reading List
The Sacramento Bee “Riding a wave of new tax revenue, California’s spending plan for the coming fiscal year will rise by nearly $5 billion, a powerful indication that the state that came to symbolize fiscal mismanagement during the heart of the recession is emerging into brighter days.”
The Wall Street Journal “California expects general-fund revenue to rise 3.3% to $98.5 billion from $95.4 billion in the current fiscal year, representing the highest level since 2007. The increase comes as California’s economy has improved considerably since the recession that hit the state especially hard. The unemployment rate fell to 9.8% in November from 11.3% a year ago.”
Salon “The governor listed a number of factors that could undermine his budget plan, including uncertain action by Congress to raise the federal debt ceiling, potential increases in health care costs and whether courts or the federal government block some of his proposed spending cuts.”