Jerry Brown Left Deukmejian a Billion Dollar Deficit and will most likely not improve Californias losing businesses and residents

I wanted to post this piece on Jerry Brown in response to a few questions my wife asked and I wasn’t able to respond to them at the time. Now I know (which means she knows). First we will take the progression of governors prior to and immediately following Jerry Brown’s two terms in office.

Before this look at the issue at hand, I will simply state the following:

  1. Jerry’s father left Reagan with a 200-million dollar deficit;
  2. Reagan left Jerry Brown a 500-million surplus;
  3. and Jerry Brown left Deukmejian a billion dollar deficit.

This will be looked at more in-depth as we go along. Here is the progression of governors prior to Jerry brown and immediately following his two terms in governorship. The following is from Mercury News):

Pat Brown, 1959-1967

Population increased from 14.7 million to 18.8 million, nearly 28 percent.

Unadjusted spending rose from $1.9 billion to nearly $4.7 billion, or 141 percent.

After inflation is factored, per capita expenditures rose from nearly $1,309 to $2,000.

That represents a 53 percent increase in real spending.

Social and economic factors: Pat Brown presided over the golden age of expansion in California, a period that saw the beginning of the State Water Project, the building of freeways, growth of the public school system and the Master Plan for Higher Education. At the same time, the aerospace industry was booming, much of it located in California.

Then Reagan came into the position:

Ronald Reagan, 1967-1975

Population increased from 18.8 million to 21.2 million, slightly more than 12 percent.

Unadjusted spending rose from nearly $4.7 billion to nearly $10.3 billion, or 121 percent.

After inflation is factored, per capita expenditures rose from $2,000 to nearly $2,253.

That represents a 12.6 percent increase in real spending.

Social and economic factors: Ronald Reagan was forced to rein in spending, in large part because of two recessions and lower defense spending by the federal government as Vietnam wound down. At the time, Reagan signed California’s largest tax increase to balance the state budget.

Then came Jerry Brown:

Jerry Brown, 1975-1983

Population increased from 21.2 million to 24.8 million, or 17 percent.

Unadjusted spending rose from nearly $10.3 billion to slightly more than $25.3 billion, or nearly 147 percent.

After inflation is factored, per capita expenditures rose from $2,253 to nearly $2,530.

That represents a 12.3 percent increase in real spending.

Social and economic factors: Like his predecessor, Jerry Brown also dealt with recessions and high inflation. But he and the Legislature dramatically altered funding to local governments and schools in 1978 after a taxpayer revolt capped property taxes. Lawmakers sent more than $26 billion dollars to schools and local governments through the end of Brown’s term.

And following Jerry Brown’s tenure was Deukmajian:

George Deukmejian, 1983-1991

Population increased from 24.8 million to 29.8 million, or 20 percent.

Unadjusted spending rose from $25.3 billion to nearly $51.4 billion, or 103 percent.

After inflation is factored, per capita expenditures rose from $2,530 to $3,149.

That represents a 24.5 percent increase in real spending.

Social and economic factors: George Deukmejian benefited from a national economic turnaround and signed state budgets that boosted spending over his eight-year term.

During Brown’s tenure he was faced with a tax revolt partly due to Reagan’s raising of taxes. At first Jerry was one of the most ardent critics of Proposition 13 which put a cap on property taxes. Some say later he defended this proposition vigorously, others argue this point however. That is neither here-nor-there. The bottom line is this,

When Jerry Brown came into his first term as Governor he saw and guided a surplus that crescendoed at about 6-billion dollars. Before dealing with his leaving office, I want to set up why this surplus happened. Even though Reagan increased taxes, he put into action many cuts that created this growing surplus which Jerry Brown inherited. Here are three letters Ronald Reagan wrote to those who asked on this subject. (Letter from Reagan: A Life in Letters, pp. 210-212):

[Letter to Mr. Jimmy Dixon, after 1975]

Dear Jimmy

It was good to see you the other night even though it was a split second. Thanks for your most generous words.

The figures I gave on California if those were the ones you meant are as follows: The state was spending well over a million dollars a day more than it was taking in and had been adding an average of 5,500 new employees a year for eight years.

In welfare 16 percent of all the welfare recipients in the country were on the rolls in California. We went to the people and asked for the top people in the state to serve on task forces. About 250 gave an average of 117 days full-time going into 64 state departments and agencies and came back with 1,800 specific recommendations as to how modern business practices could be used to make government more efficient. We implemented more than 1,600 of those. Before the end of my first term welfare was so out of hand the caseload was increasing by 40,000 people a month.

We froze the hiring of replacements for employees who left state service and instituted our welfare reforms. When our eight years ended we had virtually the same number of state employees we started with. Due to our growth in population this meant some departments had absorbed a workload increase of 66 percent. The welfare reforms halted the 40,000 a month increase—we now have 400,000 fewer people on welfare.

We’ve increased the grants to the truly needy by 43 percent, saved the taxpayers $2 billion and were able to return an $850 million surplus as a one-time tax rebate. All told we’ve given $5.7 billion back to the people in rebates, tax cuts and even bridge toll cuts. We gave the new government a balanced budget for the first time since 1943 plus a $500 million surplus.

If there are any more figures you want let me know.

Given my best to Jeanne.

Sincerely, Ron

In another letter to Mr. Squires in May of 1979, we find the following response:

Dear Mr. Squires:

I’m sorry to be so late in thanking you for your March 11 column, but it has only been brought to my attention in the last few days.

I appreciate your kindness in saying that I am in the mainstream of our party and that I am “an articulate and effective spokesman” for the philosophy of conservatism. You did, however, question whether I could (if given a chance) make such a philosophy operational. At the risk of seeming presumptuous, may I fill you in on some points with which you might not be familiar? It’s understandable, I hasten to say, that you wouldn’t have knowledge of happenings in California or that we did make such a philosophy work. I use the plural “we” because, as governor I had the help of some very fine people.

When I took office, California was insolvent and spending a million dollars a day more than tax revenues. In the eight years of our administration, we made the state solvent, attained a triple-A rating (Moody’s) for California bonds and left the new governor a half-billion dollar surplus. We also returned $5.7 billion to the taxpayers in direct rebates and credits.

It wasn’t all cut, squeeze, and trim, however. We increased support for public schools eight times as much as the increase in enrollment and increased the scholarship fund for needy students by 9,000 percent. While reducing the cost of welfare $2 billion in three years, we raised, at the same time, the grants for the needy by 43 percent. They hadn’t had a cost of living increase since 1958. Our reforms in the case of the mentally ill became a model for other states and even a few foreign countries. There were other accomplishments, but these few should reassure you that commonsense conservatism can be made to work.

One last point. You’ll be pleased to know that a number of your colleagues (members of the capital press corps) made a number of trips to the barbershop where my hair was cut and discovered for themselves that I did not dye my hair. Now, happily, enough grey is showing to make such research unnecessary.

Again my thanks for devoting your column to me.

Sincerely, Ronald Reagan

And the third letter to a Mr. George Jessel during the summer of 1979:

Dear George:

It was good to talk to you the other day, and I’m deeply grateful for your offer to help. After thinking it over, I believe probably the best things that you as a Californian might be able to say would have to do with some high points in my record as governor rather than trying to specify issues and my views on the problems.

For example: when I became governor, the state was virtually bankrupt, spending a million dollars a day more than it was taking in. The deficit in the middle of the fiscal year when I took office was already in excess of $200 million. The number of state employees had been increasing for eight years by around 6,000 employees a year. After eight years in office, we left our successor a $500 million surplus. The state payroll was virtually the same size in numbers of employees as it was when we started, and in the eight years, we had returned to the taxpayers in tax rebates and credits $5.7 billion. Each year that we accumulated a surplus, we simply gave it back to the people with the exception of the final year in which you leave office before the end of the year. California’s welfare load was increasing at 40,000 people a month.

We reformed welfare and changed that to an 8,000 per month decrease. Over a three-year period, we reduced the welfare rolls by almost 400,000 people, saved the taxpayers $2 billion, and were able to grant increases averaging 43 percent to the truly needy. They hadn’t had a cost of living increase since 1958. The state income tax had begun at the first $2,000 of earnings. When we left office, that had been changed to exemptions from the income tax until you were making $8,000. At the same time, we increased state aid to local schools. Our bonds received a triple-A rating by Moody’s for the first time in the histOry of the state.

I appointed more members of the minority communities to executive and policy-making positions than all the previous governors of California put together.

Unemployment, which historically has been higher in California than the national average, was lower than the national average during our terms in office, and the cost of living increase in California was lower than the national average.

George, I think that’s enough for now. If I think of anything else, I’ll jot it down and get it to you. Again, thanks for all that you’re doing.

Best regards, Ron

This cutting of programs and Jerry Brown’s inheriting of a growing surplus ($500 million) and his carrying through of fiscal responsibility early in his tenure caused California’s surplus to burgeon (5.8-billion).  A Jerry Brown fact checking site speaks to this:

Governor Brown inherited a $555,000,000 surplus from Governor Reagan at the end of Fiscal Year 1974-75.  Brown allowed the surplus to increase over three fiscal years until it reached $5,300,000,000 or a 954% increase.  The California budget surplus was not only the largest budget surplus of any state in the nation, but California’s surplus of $5.3 billion tops the total of $3.3 billion in surpluses from all other states combined according to a letter from the National Governor’s Association and the National Conference of State Legislators which was sent to Chairman Charles Schultze of the President’s Council of Economic Advisors according to the Sacramento Bee (2-24-78).

In this same article Brown’s personal fiscal responsibility is displayed in him not moving into the governor’s mansion or using the governor’s limo. (Or this could be he was closely allied with anti-war socialists tso that denying these perks was more based on dogma in rejected bourgeois type living, keep in mind that while he cut pay for firemen and police he allocate a million dollars to Jane “Hanoi Hilton” Fonda’s arts program.) However, before leaving office, he and the Legislature spent much of the $6 billion surplus. In fact, the New York Times in April of 1992 spoke to this disparity in what was left the State when Jerry Brown turned over the Governorship:

“[In 1982,] The budget surplus had evaporated into a deficit of more than $1 billion and the state’s general fund reserve had fallen from nearly $2 billion to zero. The unemployment rate, worsened by a national recession, had risen to a record high of 9.9 percent.”

Some other articles talk of this “in the red” problem… which was created mainly — in my mind’s eye — by help of the early growth in power by the unions that Jerry Brown helped to empower and are now creating a 500-billion dollar deficit in what California owes its union workers pensions (this total from Stanford does not include medical benefits. There are 15,000 people in the $150,000 pension retirement that they can collect at age 55! See the 17-minute audio below):

The LA Times’ George Skelton Reported That Brown Had A $6 Billion Surplus. “Brown only had to shovel out money. The state was sitting on a $6-billion surplus, which state Treasurer Jesse Unruh called ‘obscene.’” (George Skelton, Op-Ed, “Schwarzenegger: A New Brown,” Los Angeles Times, 5/25/09)

Brown Left California With A “Full-Blown Financial Crisis.” “By 1983, when George Deukmejian replaced Brown in the governorship, California had a full-blown financial crisis on its hands. There was a billion-dollar-plus hole in the state budget, no reserves to cover it and the state’s bond rating slipped a notch to AA-plus.” (Dan Walters, “Big Bond Fight Reaches Ballot,” Sacramento Bee, 10/15/84)

“By the time Brown’s reign ended in 1983, therefore, the state was more than a billion dollars in the red, a crisis inherited by successor George Deukmejian.” (Dan Walters, “Duke Relaxes On Spending,” Sacramento Bee, 10/10/85)

I doubt if Jerry Brown and the slew of now liberal Democrats that fill major positions in the California government and the control of Democrats in the legislature and the passing of Prop 25 which now allows a passing of budget a simple majority act in California will do anything but increase regulations on businesses, raise taxes, and continue the flow of people and businesses leaving the state (see audio below). For instance, Jerry Brown’s response to why many entertainment businesses have left the state were due to permit issues, Gay Patriot (h/t) references Hugh Hewitt’s posting of this video:

Hugh Hewitt Comments:

Indeed, Jerry also doesn’t seem to understand why film production has fled California.  It isn’t about permits, but about tax policy.  Does any Democrat anywhere in the United States understand that capital and production are mobile?  Can go anywhere at any time, and will?

In an interview on my program this week, Meg Whitman pointed to the announcement by Intel that its newest facility will be built in Oregon.  This is the choice facing California:  Rebuild the private sector with pro-growth tax policy, or dish out tax dollars to favored constituencies while unemployment continues at 12.5%.

This is why I called this time in California the “Grand Experiment” – people will see what a completely liberal Democrat controlled state does. which is why maybe 1.5 million people have left California:

Jobs, this is what people need the most, and they are going to states that give the greatest tax-breaks to businesses which invite businesses in which create jobs. Instead, state workers and unions are the only job sector growth [Public sector unions grew from representing 43.4 percent of government workers to 55.8 percent last year.]… which is the most horrible item in this recent election, as, Jerry Brown is beholden to them. The history of these unions and Jerry Brown is noted by American Thinker:

But the accomplishments stopped in the 1970s with the election of Governor Jerry Brown. Mr. Brown expropriated the budget money that had been allocated for infrastructure — much of it raised by motor fuel taxes — and diverted it to his own leftist causes. Aqueducts and freeways were canceled, including some that already were under construction. Brown also blocked private construction of power plants. His anti-American Dream was this: If you don’t build it; they won’t come.

But they came anyway, and now Californians waste millions of gallons of fuel in traffic jams. Forbes named California the nation’s worst state for drivers. During the time since Mr. Brown canceled most of the state’s freeway construction, Californians travel more than twice as many miles, but the lane mileage has increased by less than ten percent.

Despite insane spending, education quality worsens. Water rates continue to rise, yet irresponsible eco-fascists demand that taxpayers spend billions of dollars to demolish existing reservoirs. This year, chief executives voted California the worst state in the nation for doing business.

As governor in the 1970s, Mr. Brown signed legislation that gave state employee unions the collective bargaining power that now is driving the state toward bankruptcy. (Incidentally, he is running for governor again this year.) Brown was the first in a series of leftist Democrat and moderate Republican governors that raised taxes while lowering the productivity of the state’s employees by more than half. America’s productivity during that period in the private sector grew by 43 percent (one percent average, compounded annually), a benchmark that makes the relative performance of the state’s unionized employees even more dismal….

These unions were the largest donors to Jerry Brown (LA Times):

Brown raised more than $32 million for his campaign, and labor unions and other groups spent an additional $25 million on Brown’s behalf.

Here is American Thinkers input after highlighting the 1/2 a trillion dollar mess California is in:

Since Brown gave them a green light in the 1970s, public employee unions have become a muscular, dominating force in California politics. State employee unions spent a whopping $31.7 million on state races just from 2001-2006, according to the California Fair Political Practices commission — higher than any other group, including corporations. The majority-Democrat California legislature has voted accordingly.

Since California is mainly broke because of these unions, do you think he will seriously fix the problem? I doubt it highly… either will all the other union loving Democrats that are in office. He is still, in my mind’s eye, that same radical he has always been:

Even before his first run at governor, Jerry Brown, a graduate of Yale Law School, had developed a reputation as an aggressive antagonist while an antiwar organizer in the 1960s and California secretary of State from 1971 to 1975 (Green Gov)


Brown enjoyed a special personal and political relationship with anti-Vietnam War activists and socialist cum Democrat Tom Hayden and Jane Fonda  (who were married the year before Brown became governor) and Hayden’s Campaign for Economic Democracy (CED).  Many Brown administration employees were activists in the CED; however, the California State Senate refused to confirm Fonda to the California Arts Commission. (Jerry Brown Fact Check)

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