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#  You Kidding Me California? What Budget Surplus?

***![](https://mail.citywatchla.com/images/stories/Jan-2014/cw1202b.png)CONNECTING CALIFORNIA***-Let’s stop kidding ourselves. Any budget surplus will be spent. Period.

The question is how. Republicans are calling for tax rebates, which – I can hear your screams, Mr. Fleischman – are a form of spending. The real debate is among Democrats, who are divided between those who want to put the money in reserve or to spend it now.

Written by Joe Mathews.

January 06 2014

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***![](https://mail.citywatchla.com/images/stories/Jan-2014/cw1202b.png)CONNECTING CALIFORNIA***-Let’s stop kidding ourselves. Any budget surplus will be spent. Period.

The question is how. Republicans are calling for tax rebates, which – I can hear your screams, Mr. Fleischman – are a form of spending. The real debate is among Democrats, who are divided between those who want to put the money in reserve or to spend it now.

That debate needs to expand beyond the somewhat false current media frame, which is profligate liberals who want to spend now vs hyper-cautious Brown-ists who want to save. The truth is that the savers will spend – only later. The better question is what’s the best use of the money, and when.

Holding onto some money for the next recession makes sense – spending is especially valuable when times are tough, and it would be good to have a cushion so we don’t see the same decimation in the government sector that we saw during the last recession.

But encouraging growth is important too. The state is badly underinvesting in higher education and workforce and infrastructure. School spending remains below national average, and it’s far from clear that the state will have the money to meet the promises it made for eight-year increases in school funding during last year’s reform of the school funding formulas.

This spending can’t wait. It should have happened years ago. It would be nice if the cost of underinvestment could be highlighted, in the same way that Gov. Brown highlighted the “Wall of Debt.”

Indeed, the state’s needs far surpass that of the surplus, which is why tax reform should be on the table (and why it’s so dispiriting that it seems to have been taken off the table by leading state officials and by would-be reformers at last fall’s California Economic Summit).

So when it comes to spending the surplus, the question is not whether—but how and when.

***(Joe Mathews is Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It \[UC Press, 2010\]. This column was posted first at [FoxandHoundsDaily.com](http://FoxandHoundsDaily.com))***

***-cw***

***CityWatch***

***Vol 12 Issue 2***

***Pub: Jan 7, 2014***

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