California Economy Could Cost Jerry Brown Re-Election

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Jan. 14 (Bloomberg) -- The release of California Governor Jerry Brown’s 2014-15 budget last week was a cause for celebration in Sacramento. In news conferences all over the state, Brown triumphantly announced that his budget would invest in California’s schools, expand health-care coverage for millions and continue work on the state’s troubled high-speed rail project. All of this while Brown and his allies have been touting what they call California’s comeback as an example for other states to follow.

Missing in the budget and in Brown’s public pronouncements is any serious mention that California still faces a jobs crisis, and has an economy that, while recovering, is doing so at an anemically slow pace. His only policy prescription for jobs and growth seems to be the high-speed rail project, which is already overbudget and may never really get going because of legal challenges. Absent from the governor’s budget are proposals to encourage sustained job creation or long-term economic growth, despite being chock-full of new spending in almost every area of state government.

The reality is that Brown’s exuberance about the California comeback is misplaced. In fact, it appears to run counter both to what the economic statistics tell us and to how Californians feel about the state of the state.

In December, my colleagues and I at Stanford’s Hoover Institution, together with the polling firm YouGov, conducted the second in a series of public opinion polls to measure how Californians feel about the condition of their state, its economy and the priorities its policy makers should be addressing. The first such poll was taken in September 2013.

Overall, Californians don’t think things are better in the state today than they were a year ago. In fact, almost 40 percent of respondents indicated that things have actually become worse in California over the last year, with an additional 29 percent concluding that things are about the same. Half of those polled disagreed with Governor Brown’s claim that California is a model of good governance for other states to follow.

This pessimism is linked, unsurprisingly, to Californians’ feelings about the state’s economy. Californians think the state’s economy is stuck in neutral and that the prospects for future economic growth are dim at best. The skepticism expressed by respondents last month largely mirrors that found in responses to the same questions asked in September. Since then, Californians haven’t gotten more optimistic in their evaluations of the economic recovery, job market or direction that state tax rates are headed.

More than 80 percent of respondents said they are either about the same or worse off financially than they were a year ago. The so-called economic recovery in California has been particularly unkind to residents of the state with the lowest incomes. In fact, almost 40 percent of Californians whose family incomes are less than $40,000 a year reported that they are financially worse off today than they were a year ago.

And looking ahead, Californians aren’t exactly optimistic either. Just over half of respondents think they’ll be about the same financially in six months as they are today, while almost one in five concluded that they’ll actually be worse off by summer. Similarly, one in three Californians surveyed reported having no confidence that, if they left their job today, they’d be able to find a job in the next six months that pays as much as the job they have now. Finally, almost 70 percent of those surveyed believe that state tax rates will increase in the next year (with 30 percent saying that rates will increase “a lot”).

These assessments highlight the issues that Californians want their policy makers to address. Strengthening the economy and improving the job situation topped their list of concerns, with more than 70 percent believing that each of these should be top priorities for lawmakers.

But Brown’s budget takes a pass on grappling with these critical issues. It’s all incredibly tone-deaf, coming from a politician who some pundits are suggesting might be a legitimate presidential contender in 2016. The two policy priorities that Californians find most important -- growing the economy and creating jobs -- are given an incredibly short shrift in Brown’s 2014-15 budget. What is addressed is the governor’s obsession with the state’s high-speed rail project. Unfortunately for him, just 10 percent of Californians surveyed thought that construction of the rail line should be a top priority for lawmakers.

Despite these undercurrents, the conventional wisdom in California is that Brown is coasting to re-election. But our poll detected a different trend. We found that when voters are asked whether they prefer Brown or someone new come November, just one in four says the governor should be re-elected, compared with 44 percent who want to replace him. Especially problematic for Brown is that 53 percent of independents in the survey want a new governor.

Brown’s problem isn’t that he doesn’t have ideas. He has a budget that spends almost 9 percent more than the previous year’s. Instead, the governor’s problem is that none of his proposals truly address the jobs and economic crisis.

California has persistently high unemployment, and its 8.5 percent unemployment rate is sixth highest in the nation. Almost 18 percent of the state’s residents are unemployed, have stopped looking for work, or have part-time jobs but want full-time employment. Of the 10 metropolitan areas with the highest unemployment rates in the country, seven are in California.

So, Governor Brown’s Pollyannaish declarations aside, much work remains to be done to get the state’s economy back on track. And if he continues to ignore Californians’ interest in real plans to improve the jobs picture, Brown may find himself fighting for his political life later this year.

(Lanhee Chen is a Bloomberg View columnist and a research fellow at the Hoover Institution at Stanford University. He was the policy director of Mitt Romney’s 2012 presidential campaign.)

To contact the writer of this article: Lanhee Chen at lchen301 or @lanheechen on Twitter.

To contact the editor responsible for this article: Christopher Flavelle at