- The Washington Times - Monday, November 29, 2010

ANALYSIS/OPINION:

On Election Day, the once and future governor of California convinced voters that “I have the preparation, the know-how and the independence to challenge the status quo.” Now it will be up to Jerry Brown to deliver on that claim.

California’s struggles are well-known, as are its causes. We have the nation’s third-highest unemployment rate. Last year for the first time in living memory of most Californians, our economy actually shrank. No longer does the Golden State embody the American dream. People are leaving California at a faster rate than newcomers arrive from other states.

We suffer from some of the highest taxes in the nation. We have seen our education system crumble along with our roads. And the California legislature has piled up budget deficits that will haunt the state for years to come even after raising taxes by $18 billion. These days state government seems to excel only in producing regulations and fostering litigation.

Gov.-elect Brown has volunteered to clean up this mess, and returns to the governor’s office with fewer illusions than any of his predecessors.

So how can he successfully challenge the status quo while confounding expectations of supporters and adversaries alike?

California has three urgent priorities. Because of his experience and temperament, Mr. Brown could shake up the Sacramento establishment on all three.

The first is economic growth. Mr. Brown’s task is to undermine the political barriers and transform California into a stable and reliable place for job-creating investments. He should:

c Take a leaf from his vanquished opponent, Meg Whitman, who advocated suspending our global-warming law for one year to assess the full-throttle regulatory expansion now under way. The climate-change lobby will howl, but the recession has already reduced greenhouse gas emissions in California. Granting himself a year to ensure that new regulations won’t chill our business climate would be a no-regrets strategy.

c Propose an overhaul to the venerable California Environmental Quality Act, the granddaddy of state environmental laws. This could be Mr. Brown’s Nixon-to-China moment. In the 1970s, Mr. Brown advocated what he called an “era of limits.” Today, the new governor could restore the balance between a front-loaded analysis of environmental impacts, and the current litigation-loaded process that substitutes for fair decision making.

c Bring under control the proliferation of state regulations by requiring transparent economic analysis of new rules. This would drive the bureaucrats crazy, but would give the new governor more power to bring his agencies to heel and ensure new regulations are worth the effort.

The second priority is a legitimately balanced budget. The nonpartisan legislative analyst has estimated that the next governor will face a $25 billion deficit the moment he takes office. An honest and lasting fix would mortify the status quo, but it would bring some hope to ordinary taxpayers. He should:

c Pledge no tax increases for at least two years, until California can expect an economic recovery. While this pledge does not itself reduce the deficit, it would send a message to potential entrepreneurs that their new investments would not be diverted to the state treasury. It also signals to Republican legislators, who must agree to any new taxes, that he is serious about including the opposition under his big tent.

c Freeze spending for two years, including salaries for state employees and growth in entitlement programs.

c Double down on pension reform. Create hybrid retirement plans where state employees can share the risk in investments, like their counterparts in the private sector.

The third priority is political reform. The California legislature has nearly twice as many Democrats as Republicans. Most in the majority party owe their election to the support of public employee unions. Indeed, many members are recruited from the ranks of union organizers, including three of the past six Assembly speakers.

This dominance by public employee unions has created a “spend now - invest never” attitude, which fosters budget deficits, encourages tax increases and ignores economic growth. On the right, anti-tax and anti-government activists hold sway over much of the Republican caucus. To break up the monopoly of ideological extremists and special interests, Mr. Brown should embrace and ensure the success of the new era of political reform approved by the voters: a redistricting commission and the open primary.

Toward the end of the campaign, Mr. Brown rolled out the rhetoric of a politician who sees victory on the horizon: “We’re winning as Democrats, but we have to govern as Californians.” The difference between empty words and accomplishment will be how soon and for how long Mr. Brown will reject the failures of the status quo and embrace new and productive directions in economic growth, fiscal prudence and political accountability.

Loren Kaye is president of the California Foundation for Commerce and Education.

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