Jerry Brown

From the first time decades ago he was lampooned as a quirky upstart until now, the final stretch of his unprecedented fourth term as California’s governor, Jerry Brown has reveled in his reputation as a cheapskate.

“Nobody is tougher with a buck than I am,” he boasted during the 2010 campaign that sent him back to Sacramento.

Eight years later, Brown is poised to earn a place in the history books as the leader who helped right the ship of state. His mantra of measured spending could be a standard by which future governors are judged.

“We’re well positioned, but if the next governor doesn’t say ‘no’ at critical moments, things will get worse,” Brown said in an interview with The Times.

His promise of similar straight talk about California’s budget prevailed in the 2010 election, held in the shadow of financial collapse. The projected budget deficit he inherited — even after two years of cuts under Gov. Arnold Schwarzenegger — stood at $27 billion.

All of which seemed a distant memory Wednesday as Brown signed a budget creating a $13.8-billion cash reserve, the largest in state history. “I think people in California can be proud that we’re making progress,” the 80-year old Democrat said standing beside legislative leaders — the oldest of whom was only 12 when Brown was first elected governor in 1974.

Gov. Jerry Brown displays a playing card with his dog, Sutter, on it during his State of the State speech in 2014. The cards, handed out to legislators, urged them to save — not spend — all of the growing tax revenues.

(Rich Pedroncelli / AP )

While supporters tout his record on combating climate change or raising the minimum wage, the through line of Brown’s second chance as governor has always been the budget, a topic that demanded a fiscal reckoning just days after he took office.

“What surprised me was how deep the deficit became during Schwarzenegger’s last few years,” he said. “We had to get in there and cut, and find some new revenue and work it out the best way we could.”

Brown’s first moves in 2011 were to cancel new cell phones and government vehicles for state workers, political symbolism not unlike the bland Plymouth sedan he chose in the 1970s from the state vehicle pool. By spring, he convinced lawmakers to cut $8.2 billion from programs like higher education, daytime elderly care services and doctor visits for the poor.

When substantive efforts to solve the rest of the problem stalled that June, the governor did something his predecessors had never done: He vetoed the budget ratified by lawmakers.

“For a decade, the can has been kicked down the road and debt has piled up,” Brown said as he signed the veto message. “California is facing a fiscal crisis, and very strong medicine must be taken.”

The veto was a shot across the bow to the Legislature. “It communicated very clearly that there was going to be a minimum standard for the legislative budget, and they just couldn’t slap anything together and put the name ‘budget’ on it,” Brown says now.

“We were frustrated,” remembers John A. Pérez, who was Assembly speaker at the time. “But it laid the foundation for what has become eight years of on-time, balanced budgets.”

Deeper cuts ultimately were made. Within months, ratings agencies moved California’s credit outlook to positive, the beginning of a trend that has driven down interest rates for government borrowing, one way the state has saved money.

Gov. Jerry Brown’s wall of debt crumbles, but more walls are behind it »

He later turned his attention to the short-term obligations that piled up during the financial crisis, from raided school funds to Wall Street-backed deficit bonds. Branded by Brown as the state’s “wall of debt” and once towering at nearly $35 billion, today the balance is less than $5 billion.

“I tell my friends that Jerry Brown is one of the most fiscally conservative Democrats that I know,” said Connie Conway, a Tulare County Republican who served as Assembly GOP leader from 2010 to 2014. She recalls saying at one point that Brown “is the adult in the room because at least he’s admitting we have debt.”

Still, it was Republicans who handed Brown his first real budget setback in 2011, refusing to support a special statewide election to extend temporary taxes. The governor, never a back-slapping kind of politician, nonetheless mounted an intense charm offensive. He hosted private dinners for legislative Republicans where California wine flowed freely. He brought along his affable Corgi, Sutter, for visits. GOP lawmakers wouldn’t budge.

In hindsight, it was a lucky break. Special elections have historically had a disproportionately high turnout of conservative voters who likely would have rejected the plan. When Republicans balked, Brown and a coalition of business and labor leaders qualified a tax increase for the ballot in 2012, a presidential election year with strong turnout from Democrats.

Gov. Jerry Brown holds up a sign in support of Proposition 30 while visiting a San Diego school on Oct. 23, 2012, in San Diego. The ballot measure passed with 55% of the vote.

(Lenny Ignelzi / AP )

The resulting Proposition 30, a surcharge on the state’s sales tax and the incomes of wealthy taxpayers, provided revenue for six years — a more robust plan, Brown now says, than what he asked Republicans to support. “We’d have been right back in the soup” with the original plan, he said. “This way, we got a couple of more years.”

Brown campaigned hard for the ballot measure, shrewdly making it about the budget’s biggest beneficiary — schools — and about his own commitment to balancing the books. On election day, it passed with 55% of the vote.

“There’s no way in hell the voters would have approved those taxes if not for their faith in his fiscal stewardship,” Pérez said.

The taxes and California’s recovering economy have since produced historic tax windfalls. The state Department of Finance estimates the 2012 tax initiative and an extension approved by voters (but not explicitly endorsed by the governor) in 2016 has, to date, generated $50 billion in additional revenue.

Brown’s budget dominance begins with a firm grip on tax revenue forecasts »

Not that all of the modern Brown era has been all about less spending. State government spending has risen by 59% since 2011. Much of that has gone to K-12 schools, as required by law, and Medi-Cal, the state’s Medicaid program. Healthcare spending, in particular, has more than doubled in seven years, to about $23 billion in general fund costs. California has fully embraced Medicaid expansion under the Affordable Care Act. Brown has lashed out at efforts by President Trump to rescind the law.

The rush of revenue also has allowed for a substantial savings account. Brown and lawmakers crafted a robust rainy-day reserve fund, ratified by voters in 2014. “That’s the kind of collaboration you don’t often see between legislators and governors,” Pérez said.

Through lean and flush years alike, the governor’s job approval ratings remained strong. Liberal activists routinely criticized him for not doing more to help those in need, suggesting with an increasing frequency through the years that the scion of a prominent political family had never experienced those struggles first-hand.

Health and human services advocates hold a Los Angeles rally to protest Gov. Jerry Brown’s budget in 2014.

(Ricardo DeAratanha / Los Angeles Times )

“They’re always asking for more,” he said. “There’s no natural limit. There’s no predator for this species of budgetary activity, except the governor.”

Even critics acknowledged that Brown kept listening to advocacy groups. In 2016, he agreed to remove a provision in the state’s welfare assistance program, CalWORKs, that denied coverage to children born while their families were already receiving benefits. The ban had been in place for almost two decades.

“We came a long way,” said state Sen. Holly Mitchell (D-Los Angeles), the chair of the Senate’s budget committee and a vocal advocate for changing the welfare rule. From the beginning, she said, Brown’s advisers said it was about the cost, not the policy.

This year, Mitchell convinced him to go even further — a small increase in the size of CalWORKs’ monthly cash grants, subsidies that failed to rise with inflation for more than a decade.

Mitchell recalled a flight from Los Angeles during which Brown, a voracious reader, spoke at length about a book that chronicled poverty around the world. “And I was able to say to him, ‘Yes, that chapter right there, that sounds like Central California,’ ” she said.

Likening income inequality to his celebrated efforts on climate change, Mitchell said she once told Brown, “By you just making it a priority, you’ve had worldwide impact. So have the same attitude about poverty.”

In recent years, Brown has agreed to expand childcare programs, Medi-Cal coverage for children regardless of immigration status and a state earned income tax credit for the working poor.

“His track record on issues of poverty, inequality and economic security adds up far better [over two terms] than it often looked in individual budget years,” said Chris Hoene, executive director of the nonprofit California Budget and Policy Center, which advocates for the working poor.

Looking beyond the one-year-at-a-time approach to state budgets may be an important legacy of the Brown administration. The governor pointed to recently adopted five-year plans as a way to get a better look at what’s over the horizon. “It gets people thinking about the inevitable consequences of the decisions in this budget,” he said.

It also may help break one of the more ignominious traditions of California governors: leaving a fiscal mess for the next person to clean up. It’s the kind of dilemma his father, the late Edmund G. “Pat” Brown, left Ronald Reagan in 1967 and he left the late George Deukmejian in 1983.

“The story is one of governors always hitting a wall and leaving a big, fat deficit,” he said. “I wanted to avoid that if I could.”

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It’s unlikely two consecutive California governors have ever shared the multigenerational family connection that links Gov.-elect Gavin Newsom to his predecessor, Gov. Jerry Brown. But beware those looking for something deep: Any ties that bind together the two Democrats do so loosely.

“It’s just not a normal political relationship,” Newsom, who will be sworn in Monday, said in an earlier interview with The Times.

Brown is a singular figure in California’s modern history, the scion of a political family whose meteoric rise in the 1970s gave way to failed efforts at the presidency and U.S. Senate before an electoral rebirth as a mayor, attorney general and governor. And it was Newsom, then a brash, young San Francisco mayor, who briefly stood in Brown’s way, launching an ambitious campaign for the 2010 governor’s race that fizzled almost a year before the election.

But the story goes back much further: Brown and Newsom are members of a political fraternity that dominated their shared hometown of San Francisco for much of the 20th century.

On crime and punishment, Gov. Jerry Brown leaves behind revised rules and a new focus on redemption »

Former Gov. Pat Brown, the current governor’s late father, was elected that city’s district attorney in 1943 after a campaign financed by three friends, including William A. Newsom II, the governor-elect’s grandfather and son of a prominent builder and bank investor.

“If they hadn’t agreed to put up $5,000 [each], I wouldn’t have been a candidate,” Pat Brown said in a 1978 interview for UC Berkeley’s oral history project.

In 1960, Brown’s administration awarded a Squaw Valley concession contract to the elder Newsom, a deal panned by a legislative analyst as the state “paying for everything and getting nothing.”

The two men’s sons grew up alongside each other. William A. Newsom III, the governor-elect’s father, who died last month, was a few years older than Jerry Brown. Both graduated from San Francisco’s St. Ignatius High School and Bill Newsom once briefly dated Brown’s sister, the governor told the crowd at her eulogy in 2015.

During his first term as governor in 1975, Brown appointed Bill Newsom to the Superior Court in Placer County and then to a state appeals court. The governor-elect’s father once recounted how his interest in environmental law and preserving Lake Tahoe had intrigued Brown.

“I went up a couple of times when Gavin was a little boy, and we met with Jerry and talked about things at the lake,” Bill Newsom said in his own oral history interview with UC Berkeley in 2009.

Decades later, the young Newsom and an older Brown ended up on a political collision course. In 2011, frustrated with Brown’s slow pace for appointing members of an economic commission he chaired as lieutenant governor, Newsom drafted his own statewide proposal. Brown, deep into an effort to erase a $27-billion budget deficit, didn’t look kindly on the effort and grabbed the issue for himself by appointing a statewide jobs czar.

“Looking back, I wish I had a do-over,” Newsom told The Times last spring. “He’s dealing with triage and solvency. I would approach it differently.”

In the years since, Newsom has praised Brown’s fiscal philosophy for teaching that “you do not have to be profligate to be progressive,” a mantra to be tested once hundreds of bills — with spending projections sure to run into the billions of dollars — are sent to his desk by the Legislature.

But on Monday, it will be Newsom’s call on what to do, though few expect Brown — now with plenty of time to offer advice — to disappear altogether.

At a campaign event last fall, already preparing to move to his Northern California ranch, he had a simple message for his successor: “I’m only an hour from Sacramento,” he said. “So, Gavin, do not screw up.”

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Reporting from Sacramento — Less than four years after declaring California’s budget balanced for the foreseeable future, Gov. Jerry Brown on Tuesday said the state is projected to run a $1.6-billion deficit by next summer — a noticeable shift in the state’s fiscal stability that could worsen under federal spending cuts championed by President-elect Donald Trump.

“The trajectory of revenue growth is declining,” Brown said in unveiling his $179.5-billion plan for the fiscal year that begins in July.

The governor’s sober assessment comes on the heels of several months of lagging tax revenue collections, a change in the state’s fortunes that could stifle his fellow Democrats’ call for additional spending and give fuel to Republican demands for additional cuts.

Brown’s budget advisors lowered the official tax revenue forecast, in part, because of slower than expected growth in wages. They also reduced expectations for sales and corporate taxes because of broader national trends.

Brown proposed to address the deficit primarily by slowing the growth in spending on public schools by $1.7 billion, a change that brings funding down to the minimum required by formulas enshrined in California’s Constitution. The governor also proposed scrapping $1.5 billion worth of spending ideas left over from last year’s budget negotiations, including higher subsidies for child-care programs and awarding new college scholarships to California students from middle-class families.

“To manage unreliability requires prudence,” Brown said of his decisions to address the projected budget shortfall.

The governor’s fiscal blueprint is the ceremonial first pitch in Sacramento’s annual budget writing season, and, as such, the details will shift in coming months to address changing fiscal conditions. That could include any effort by the nation’s ruling Republicans to rethink any of the $105 billion in federal funding promises the state expects to receive for a variety of services.

The most consequential of those is the $16.1-billion subsidy for Medi-Cal, the program offering healthcare to the state’s most needy, provided through the Affordable Care Act. Those funds have helped the state add more than 3.8 million people to the Medi-Cal system, a network of providers that reaches one in every three Californians.

Republican leaders in Congress and the president-elect have vowed to repeal the law championed by President Obama, though they have yet to identify when or how that will happen. That uncertainty is why Brown’s new budget plan does not officially lay out a path forward, though the governor made it clear on Tuesday that he thinks GOP leaders should rethink their political promises in regard to Obamacare.

“That’s very bold and, I think, a move that isn’t very consistent with decency,” the governor said Tuesday.

He also offered national leaders some advice as they weigh the merits of various federal subsidies.

“I don’t think this country needs any more divisive kinds of moves that divide the poor and the rich, split the middle class and all those other things that will be the result if the rhetorical thrust, as suggested in the last few weeks, becomes the operational reality in Washington,” Brown said.

Gov. Jerry Brown often gets his way when it comes to tax revenue forecasts, and that’s a big deal »

But the governor offered a dash of his own brand of raw politics Tuesday by asking legislators to approve an extension of California’s system for buying and trading greenhouse gas pollution credits. That cap-and-trade program faces an uncertain future beyond 2020, as business groups have challenged its legality in court.

On Tuesday, Brown proposed that the Legislature officially reauthorize the program — which would require a supermajority vote in both houses — and hinted that he might otherwise block the spending of $2.2 billion in proceeds from the auctions of those credits.

“Given the fact that the federal government is going in the opposite direction,” Brown said of the climate change debate, “I would think that Californians want to strengthen their own commitment.”

Advocates for social services, though, saw the budget plan as lacking any new strength for the state’s most needy.

“This is just a very conservative budget that really doesn’t do anything to reduce poverty in the state of California,” said Mike Herald of the Western Center on Law and Poverty, who pointed to a lack of new money for welfare assistance efforts or affordable housing.

The governor’s budget also offers less than expected for backers of Proposition 56, last year’s tobacco tax increase earmarked to boost healthcare funding. While Brown pegs the tax’s infusion of new money at $1.2 billion, it is offset by overall sagging tax revenues, and therefore, unlikely to boost the reimbursement rates sought by doctors who treat Medi-Cal patients.

Democrats, in general, sounded positive notes about the governor’s proposal. One key source of early criticism, though, was his plan to phase out the scholarships offered to middle-class students attending University of California and Cal State campuses. The budget proposes to renew scholarships for 37,000 current recipients but offers no new assistance beyond that.

Assembly Speaker Anthony Rendon (D-Paramount) said the plan, coupled with proposed tuition increases, would be unfair.

“We must work to keep college affordable for California students,” he said, “and I will not support burdening them with higher fees and greater student debt.”

In all, Brown’s budget continues a long trend toward allowing additional spending while restraining the political desires of Democrats to do more. And while it doesn’t spell out a specific need to respond to changes pushed by Trump and congressional Republicans that are on the horizon, the governor made clear that all budget decisions in Sacramento are in some way subject to the national debate.

“That’s why we’re going to have to hold on to our hat here,” he said. “It’s going to be a rough ride.”

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Los Angeles Times staff writer Melanie Mason contributed to this report.

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