California’s fixation on balanced budgets has compounded the state’s big problems

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Gavin Newsom meets with Toni Atkins, Anthony Rendon, Holly J. Mitchell and Phil Ting to discuss California budget. Photo by Office of the Governor of California, Public domain, via Wikimedia Commons

Zocalo commentator Joe Mathews has come with a word that describes what he calls the state’s obsessive and unhealthy aversion to red ink: budgetism. Balanced budgets are generally a good thing. Even in this pandemic year, they’ve provided California with a surplus that will come in handy as revenues dip and Covid costs pile up. But Mathews says balanced budgets can also reflect a timidness to address California’s big problems, such as homelessness, a housing shortage and a healthcare system that was unprepared for the coronavirus onslaught. Mathews says politicians should show a willingness to borrow more and take bold steps.

Read Mathews’ column below:

Beyond Budgetism


In the midst of California’s pandemic catastrophe, we may be seeing, at long last, the demise of the dominant mode of thinking among state leaders: “budgetism.”

Budgetism is the false conventional wisdom—promoted relentlessly by media and elected officials—that the best measure of California is the condition of the state budget. 

For decades, if the budget was balanced or in surplus, California was supposedly on the move, a superpower, or even a national model of success. If the budget was in deficit, California was supposedly in crisis, a failed state, or a national cautionary tale.

But now the budget and everyday reality have diverged with tragic force. When Gov. Gavin Newsom earlier in January introduced a budget with a $15 billion surplus, it occasioned few of the usual declarations of success, and rightfully so, with the COVID-19 death toll surpassing 30,000. This could be a significant, if it’s permanent. That it has taken a once-in-a-century cataclysm to threaten our budget-centric thinking shows just how deeply ingrained budgetism has become in California, and just how divorced from reality our conversations about state governance have been.

Budgetism has endured because it provided an easy, one-number scorecard to judge governance in a highly complicated state. Gov. Gray Davis might have ended two decades of Republican dominance and achieved education reforms, but he was a failure worthy of recall because he produced a massive budget deficit after the dot-com bust. Gov. Arnold Schwarzenegger might have brought historic political reform and climate change legislation, but he failed by leaving a big budget deficit after the Great Recession. 

The Jedi master of California budgetism is Gov. Jerry Brown, who—despite neglecting mounting problems in everything from housing to unemployment insurance—left office as a media darling because he produced big budget surpluses. The Luke Skywalker of budgetism was the brilliant young finance director Ana Matosantos, a wizard at conjuring surpluses from California’s impenetrable budget rules. 

But this particular force has a very dark side. Budgetism—by focusing so much attention on annual accounting—obscures deeper troubles.  Our state’s leaders like budgetism because it offers cover for their inaction and their failures to manage agencies, fix broken systems, and execute the progressive policies. Sure, Californians may need more child care, schooling, health access, and infrastructure, but why risk spending tens of billions more that could put the budget into deficit?

Why hasn’t the dark side of budgeting been more aggressively challenged? Because politicians punish those who do. Democratic legislators who dare challenge l budgets lose committee assignments and offices. And as a journalist who takes on budgeting and suggests we need broader constitutional reform, I’m often dismissed by politicians and fellow pundits as “unrealistic.” When I once suggested that then-Gov. Brown stop summarizing the state’s prospects along budget lines and instead focus on California’s broken systems in its different struggling regions, he called me as a “declinist” in his state-of-the-state address.

Perhaps now, politicians will stop the bullying and budgetism, and pursue bigger systemic changes—and a broader set of measures of California’s health. It shouldn’t be that hard to come up with broader measures of whether California is succeeding. So far, the most serious effort at quantifying that is the California Dream Index from the reform powerhouse California Forward. 

The index tracks progress toward a more equitable California statewide and across 11 regions, on 10 indicators—air quality, short commutes, broadband access, early childhood education, college and career technical education, income above cost of living, affordable rent, home ownership, prosperous neighborhoods, and clean drinking water. 

You can quibble with whether those are the 10 best indicators to follow, but the index offers the smartest measurement we have so far of whether California’s performance is meeting its people’s needs. And it’s a much more accurate picture of the state’s health than whether the budget is in balance.

Joe Mathews writes the Connecting California column for Zócalo Public Square.  



Joe Mathews