Larry Mantle |

This will be a momentous year for California




For how many years have I been saying this?  However, this time I might actually be correct.

It appears there’s no way out for Governor Brown or the legislature – they’ll either be forced to significantly cut public education and state services, or voters will approve robust tax increases.  It doesn’t look like additional borrowing and accounting tricks are possible, given the size of the state’s deficit and the lack of economic recovery on the horizon.

This will make for a fascinating sight, as the new Governor will reportedly attempt to convince fellow Democrats in the legislature to pass an austerity budget that shows Californians what things will be like without tax increases.  Voters would then be asked, in this bad economy, whether they’d support extending and, perhaps, expanding tax and fee increases.

It’s very unclear how Californians would vote.  However, it seems Governor Brown thinks his strongest argument to voters would come in the form of dramatic cuts.  Without voters feeling the pain of deep cuts, it seems unlikely they’d support more taxes.

What do you think of this likely strategy?  Should the state balance its budget through a mix of cuts and taxes, or just pursue one of those?