State Deficits

Cuomo vs. Brown: A Tale of Two Governors


Jerry Brown and Andrew Cuomo are the kissing cousins of state government. Both Democrats are the sons of legendary former governors. Both were their state's attorney general and came to office this year vowing to get persistent budget deficits under control. So far, New York's Cuomo is succeeding; California's Brown is not.

The unique politics and culture of each state help explain why, but the better explanation may be institutional: Cuomo, with strong executive powers, was able to cajole his legislators into a deal. Brown, with less authority, threw up his hands in defeat.

California's weak executive model was on display on Mar. 29 when Brown was unable to persuade four Republican legislators to join him in calling for a special June election that would have let voters decide whether to extend existing sales, income, and vehicle taxes for five years. That left Brown with no clear path for closing a $15.4 billion deficit. With a June 30 deadline approaching and absent a budget, California again faces the humiliation of having to issue IOUs to pay some bills. By contrast, New York lawmakers from both parties on Mar. 31 approved a series of Cuomo-backed spending cuts in education and health care to eliminate a $10 billion deficit without raising taxes. They beat an Apr. 1 deadline for a new budget for the first time since 2006 and only the third time in the last 25 years.

California governors must contend with many more barriers than their New York counterparts, says Bruce Cain, a political science professor at University of California at Berkeley. Some are the result of decades of ballot initiatives that dictate how the government can raise and spend money, he says, including the 1988 proposition that locked in about 40 percent of general funds for education. The state also relies heavily on volatile sales and income taxes for revenue. "I don't think it's Jerry," Cain says. "There are more institutional obstacles that a California governor has to face."

California voters began ending the perennial legislative logjams in 2008 by stripping lawmakers of the power to draw their own legislative boundaries. Voters last year replaced conventional elections with a system in which the top two finishers in a primary, regardless of party, run against each other in the general election. Together the changes potentially make districts, and their representatives, less ideologically one-sided. In November, voters also lowered the two-thirds supermajority needed to adopt a budget to a simple majority, keeping the higher threshold for tax measures.

Still, the New York governor wields a larger stick than California's. Cuomo, 53, needs only a simple majority to raise taxes. He can also force lawmakers to choose between approving a budget and watching the government shut down. "In New York, they want a free lunch, but they realize it's not possible," says former California Governor Gray Davis, a native New Yorker who was recalled from office in 2003 over budget-deficit issues. "In California, not only do we want a free lunch, we think we have a constitutional right to it."

Cuomo's $132.5 billion blueprint cuts spending by 2 percent, the first decline in total outlays since at least 1995. He blocked fellow Democrats from extending an 8.97 percent millionaires' income tax, which they sought to prevent some of the deep cuts. Cuomo took on what he called "unsustainable growth" in school aid and Medicaid, the two biggest spending categories, persuading lawmakers to accept $5 billion of cuts. Legislative leaders say the process was speedier than in recent years because the tone of negotiations was more civil.

Brown, 73, had been negotiating with reform-minded Republicans who wanted to cap state spending, change public pensions, and ease business regulations. Talks broke down as both sides accused the other of intransigence. Senate Republican Leader Bob Dutton complained on Mar. 31 that he hadn't met with the governor until a week earlier, when Brown was accompanied by his wife, Anne Gust Brown, a lawyer and adviser. "Frankly, I was yelled at more than I was talked to," Dutton told reporters, "and mostly by Mrs. Brown."

The bottom line: As New York completes its first on-time budget in five years, California continues to struggle with a $15.4 billion deficit.

Nash is a reporter for Bloomberg News in Los Angeles.
Marois is a reporter for Bloomberg News in Sacramento.
Quint is a reporter for Bloomberg News.

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