Californians Back Higher Taxes Even as Brown to Push Austerity in Address

California Governor Jerry Brown’s State of the State speech tonight will pitch an “austere” $84.6 billion spending plan that’s drawn criticism from mayors, Republicans and advocates for higher education -- much like his “no-nonsense” first budget in 1975, one-seventh the size.

That $11.3 billion first budget gave Brown, then 36, a boost in voter opinion polls and led to a bid for the Democratic presidential nomination. Now 72, Brown needs to solidify voter support to cut $12.5 billion in spending, mostly to welfare programs and universities, and extend $9.3 billion in temporary annual tax increases for five years to make the new plan work.

Public reaction to Brown’s first government overhaul “inspired his presidential campaign,” said David Shulman, a senior economist with the Anderson Forecast at the University of California, Los Angeles, in a telephone interview. “This time the crisis is much worse. In terms of strategy, it’s broadly similar.”

Brown, who was governor from 1975 to 1983, has vowed to fix the financial troubles that have left California with the biggest deficit of all U.S. states, and the lowest credit rating. His plan, which includes restructuring some parts of state government, deals with an $8.2 billion gap in the current fiscal year, a $17.2 billion hole in the year that begins July 1, and puts $1 billion into a reserve account.

Two-thirds of Californians said they support Brown’s call for a special election on the tax extensions, according to a Public Policy Institute of California poll Jan. 27. Fifty-three percent said they would support the actual taxes.

‘Cautious on Spending’

“It’s especially important for a Democrat to say, ‘I’m being very cautious on spending,’” said Mark Baldassare, president of the San Francisco-based Public Policy Institute of California, in a telephone interview. “Right now they’re saying they like the direction he’s heading.”

Brown was first elected to lead California in 1974 during a post-Watergate rout that saw nine governorships taken from Republicans. He asked legislators to increase spending 4.3 percent to $11.3 billion at a time when state unemployment was projected to reach 9.3 percent, the Los Angeles Times reported at the time.

The son of former governor Edmund G. “Pat” Brown set the tone by reducing his own office spending by 7 percent. He refused to live in the governor’s mansion and drove a state- issued Plymouth Satellite sedan, rather than ride in the Cadillac limousine used by his predecessor, Ronald Reagan, according to the 1982 biography “California Dreaming: The Political Odyssey of Pat and Jerry Brown.”

Brown granted only half the funding increase requested by state colleges and universities, amounting to a 7.9 percent gain, to $1.04 billion. He reduced spending on supplies such as paper and chalk by $2.5 million, the Times reported.

‘Another Reagan Budget’

His cuts were “just another Reagan budget,” the Times said, quoting an unidentified University of California official.

Most Republican lawmakers voted against Brown’s spending plan, saying his budget reduced too much of a state surplus, according to the newspaper.

Fifteen months into the job, Brown’s approval rating rose to 53 percent, according to a Field Research poll released in April 1976. That was up from 43 percent the previous May, the Times said. Respondents cited Brown’s personal parsimony as a reason for liking him, according the Times said.

This time, Brown’s plan for the year that begins in July represents a decline of 8.2 percent, or $7.6 billion, from current spending, according to his budget proposal. Brown has announced a 25 percent reduction in his office expenditures. He proposed to trim general-fund outlays for higher education by 12.8 percent, or $1.7 billion, to $11.7 billion, according to his budget summary.

‘Significant Risks’

The governor’s plan faces “significant risks,” Assembly Republican leader Connie Conway of Tulare said in a statement Jan. 12. Those include the chance voters won’t approve “tax hikes totaling more than $45 billion” and “no plan for weaning big government off this funding,” she said.

University of California tuition would for the first time exceed state contributions under Brown’s plan, university President Mark Yudof said Jan. 10. He called the development “profoundly disturbing to all Californians.”

Mayors Plead

The mayors of California’s largest cities asked the governor to suspend plans to eliminate local redevelopment agencies and divert $1.7 billion of property taxes to state courts and health-care spending.

“This is absolutely the wrong time to move away from these agencies and their job creation and revenue generation,” Los Angeles Mayor Antonio Villaraigosa said Jan. 26 in Sacramento.

Mark DiCamillo, senior vice president of San Francisco- based Field Research Corp., the nonpartisan polling organization, said he wouldn’t be surprised if history repeated and the budget plan again boosted Brown’s popularity.

“People want government to start tightening its belt if that’s what they’re doing in their own lives,” DiCamillo said.

To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net.

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net

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