The media wasn’t even sure Monday’s “State of the State” address was going to happen. A few weeks ago, the buzz was Governor Jerry Brown wasn’t going to give one. After all, he’d already spoken to the state—at at his inauguration—and he’d made it crystal clear he just wanted to get down to business.
But if you listened closely Monday, the Governor didn’t really address the “state.” He spoke directly, instead, to lawmakers. I picked up on that as soon as he said “Each of us will have to struggle with our consciences and our constituencies.” Despite his casual tone, in one sentence the new Governor made it clear he knows the battleground on which his controversial proposal to balance the budget will live or die: the political stage. His “State of the State” was a battle cry to the men and women who will make the final charge. Brown’s challenging them to do what they believe is right for the benefit of the state—not whatever it takes to get re-elected.
In this sense, the Governor didn’t waste time by taking the time to speak; it was part of his strategy. And he needs to act fast. It’s already day 24 since he took office, already February 2nd, and Governor Brown wants an agreed-upon budget agreement by March in order to get his tax extension measure on the June ballot.
The tax increase extension would raise $9 billion to help fill the state’s budget gap. The rest of the $25.4 billion shortfall would be covered by deep cuts. Right now the budget proposal is a big gamble—with much at stake. State Treasurer Bill Lockyer recently reckoned California could start issuing IOUs by April. And just last week financial firm Moody’s Investors Services announced it’s started counting California’s unfunded pensions like bond debt. According to calpensions.com, that gives California “a combined tax-supported debt of $136.9 billion… ($87.3 billion bonds and $49.6 billion unfunded pensions.) The reason it’s so significant is that Moody’s sets credit ratings that affect how much the state pays to borrow money, and the state’s poor rating means it’ll cost more to borrow. Coming full circle, it’s also a direct reflection of the our continuing budget battle. You get the picture, and it isn’t pretty.
So with the countdown clock ticking loudly, and the battle lines now drawn…I predict a fight to the finish will begin soon. The Governor’s “State of the State” address was a legislative call to arms.