In a casual conversation with Democratic gubernatorial candidate Jerry Brown the other day, I asked him if I was correct in my recollection that he was the last governor, Democrat or Republican, to say "no" to government employee pension increases. He confirmed that this was true, and that he had also been the last to say "no" to salary increases as well.
What I also recall was his leadership by example - the legendary Spartan lifestyle exemplified by the choice of a burnt-out former highway patrol car for his official vehicle, etc. etc. But getting back to the core issue, it is California's employee retirement obligation that threatens the future of the state. In past columns, I have pointed out that government pension promises are so unsustainable as to be laughable - people retiring in their early 50s with almost 100 percent of their income indexed to inflation for the rest of their lives?
To add insult to injury, many of these folks are claiming a disability as they walk out the door, so a retirement benefit magically morphs into an income-tax-free disability benefit.
Can any governor put a stop to this? It would be nice if Republican candidate Meg Whitman can deliver on her promise to fix the financial affairs of the state. She has certainly demonstrated competence in her professional life, but I'm reminded of Harry Truman's comment when he was leaving the oval office to Gen. Dwight Eisenhower. Truman said, "Wait 'til the general starts issuing orders around here and is shocked when nothing happens. That's never been part of his past experience."
The fact that Whitman has spent more than $50 million so far probably confirms the rumor that she has budgeted as much as $200 million of her money to be spent on the campaign. If you think about it, this actually amounts to about $100 million of Whitman money and the other $100 million is taxpayer money.
People in the high-net-worth stratosphere don't worry that much about income taxes. While their returns might be three inches thick, there is still plenty of money left over to support eccentric personal life styles - the latter probably describes running for governor. Instead, the tax that governs the thinking of the super successful is the estate tax.
There's a point at which wealthy people come to realize that if they don't spend money themselves, roughly half of what they have when they die will just be lost in the maw of the U.S. government.
The estate tax is largely voluntary, because people like Warren Buffett use charitable foundations to give the money away. In the absence of this foresight and generosity, holding on to the money right to death's door (and beyond) will cost 50 percent. So when someone spends $200 million on a political campaign, that $200 million won't be subject to estate tax. There goes the $100 million that the American public could otherwise have used to reduce the deficit.
Who might be the most successful at tugging at the reins of state government and fixing the fiscal problem? Politics is full of counter-intuitive surprises. Who, for example, would have guessed that Richard Nixon, after red-baiting his way into office by accusing Helen Gahagan Douglas of being a communist, would have been the man to open Red China? Who would have guessed that Bill Clinton would have ended welfare as we knew it? Suffice it to say, coming soon will be a tough call for California voters. We already know about Jerry, and we're about to learn a lot more about Meg.