National News

Jerry Brown Warns of Recession and Reveals His Final Budget

Posted January 11, 2018 4:27 p.m. EST

Gov. Jerry Brown moved to bolster California’s “rainy day” fund Wednesday when he unveiled the final budget proposal of his administration in Sacramento, asking the Legislature not to take the state’s economic stability for granted, while also deflecting questions about his legacy.

His message centered on a warning: “What’s out there is darkness, uncertainty, decline and recession. So good luck, baby,” he said with a smile.

Flanked by blown-up cardboard graphs, he predicted that his successors would probably face an economic recession in the near future and said he was determined to minimize the damage. The $132 billion budget plan centered heavily on infusing the emergency fund with $5 billion in the coming fiscal year — bringing the total stash to $13.5 billion — in order to prevent layoffs and soften other painful budget cuts in a downturn.

He and his team said the progress California has made since 2011, when it was teetering on the edge of financial catastrophe, is more reason to double-down on the emergency fund. Today the state has a $6.1 billion surplus. “Yes, we have had some very good years and program spending has steadily increased,” reads his opening message in the budget. “Let’s not blow it now.”

There are several obstacles facing the governor before his term expires. Namely, brewing clashes with Republicans in Washington — over immigration, health care, and state and local tax deductions. Those could throw curveballs at the state’s budget in the years to come.

Brown hesitated to say California was at “war” with Washington during a question-and-answer session with reporters. But he acknowledged the Republican tax plan that passed through Congress last month will mean some high-income earners in California will be tempted to leave the state.

“If we have a rainy-day fund, and if people don’t move out of the state who have a lot of money, things will be OK,” he said.

And his legacy? What about it?

“Can you tell me the legacy of Goodwin Knight? Or Governor Merriam? Or Deukmejian? Governors don’t have legacies, that’s my No. 1 proposition,” he said. “Look, we have a whole political system that judges our executives by the state of the economy, over which they have virtually no impact. So, you figure it out.”