Why Cuomo is sailing and Brown becalmed

The New Governors of New York and California Have Quite a Few Things in Common. So Far, Success Isn’t One of Them

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New York Gov. Andrew Cuomo after his gay-marriage win

By Vauhini Vara and Jacob Gershman
The Wall Street Journal

Two governors: Each is the Democratic son of a former governor. Each vowed to change his state’s dysfunctional government. Each faced a huge budget deficit, powerful public-employee unions and Republican legislators with enough votes to resist tax increases.

Six months into their terms, however, California Gov. Jerry Brown and New York Gov. Andrew Cuomo are showing starkly different results.

Mr. Brown this week reluctantly agreed to eliminate a $27.1 billion deficit for the fiscal year that begins Friday with a budget that features deep cuts but is padded with one-time maneuvers he had pledged to avoid. Stymied by Republican lawmakers, he gave up for now on his quest for tax extensions that would have provided long-term structural fixes to California’s finances.

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California Gov. Jerry Brown at a conference last Thursday

Mr. Cuomo, meanwhile, is riding high on several wins, including a New York State budget that closed a $10 billion gap without raising taxes or relying heavily on fiscal tricks. The governor avoided clashes with the state’s powerful health-care groups by giving them more say over Medicaid cuts. He forged an alliance with state Senate Republicans, who control that chamber, to block Democratic efforts to raise taxes on wealthier residents. Over the weekend, the governor took a victory lap before thousands of cheering supporters in Manhattan after pushing through the legalization of same-sex marriage.

Both California and New York are predominantly Democratic states with influential Republican minorities. California is the most populous state, while New York is the third most populous, after Texas.

But their new governors took very different approaches to the fiscal crises that face states across the country.

Tracy Gordon, a fellow at the Brookings Institution, pointed out that Mr. Cuomo is seen as having presidential aspirations, which may have been a factor in his decision to avoid new taxes. In addition, California’s deficit was larger than New York’s as a percentage of the total budget—27% vs. New York’s 18%, according to the Center on Budget and Policy Priorities—and that may have made it more difficult for Mr. Brown to close his state’s gap without extending tax increases.

Mr. Brown rode into office in January vowing to balance California’s budget over the long term by making deep cuts and extending several expiring tax increases for five years, pending voter approval of the move in a special election slated for June. Calling the election would have required the support of two-thirds of the legislature, including at least four Republicans.

Mr. Brown—the son of former Gov. Edmund G. “Pat” Brown Sr. and himself California’s governor once before—indicated he would agree to changes Republicans had sought to the state’s public-pension system, to state spending and to regulations in areas like the environment in return for the party’s support for a ballot measure on taxes.

He spent weeks working to craft a deal with a handful of Republicans along with Democrats and union leaders. The talks broke down in March when the groups couldn’t agree on the specifics of pension reform, spending caps and taxes.

Mr. Brown finally abandoned his plan this week and reluctantly backed a budget proposed by the legislature’s Democrats. It assumes the state will see about $4 billion in added revenue next year due to a stronger economy and builds in up to $2.5 billion in cuts if the funds don’t materialize. It borrows from other funds, delays loan repayments and includes provisions expected to see legal challenges.

Gil Duran, Mr. Brown’s spokesman, said the governor helped craft the new budget, which is “honest, balanced and financeable” after vetoing an earlier one from legislative Democrats, and denied he endorsed it reluctantly.

In New York, Mr. Cuomo, the son of former New York Gov. Mario Cuomo, set broad savings targets for Medicaid and put the state’s largest health-care union, hospital executives and other health-care players in charge of spreading around those fewer dollars. In turn, the health-care industry, which had stymied efforts by previous New York governors to contain Medicaid costs, lobbied in favor of Mr. Cuomo’s budget.

Senate Republicans backed Mr. Cuomo’s pledge not to raise taxes while supporting his plan to impose a cap on local property taxes. Assembly Democrats balked at both policies but eventually yielded in order to get Republicans and the governor behind a rent-regulation bill they sought.

While slashing school aid, Mr. Cuomo also escaped political heat by currying favor with New York City’s teachers union. The governor helped the union by laying aside Mayor Michael Bloomberg’s effort to change work rules, protecting longer-serving teachers.

At the urging of Mr. Cuomo, a new coalition including real estate interests, trade groups and Wall Street figures spent more than $7 million on ads, direct mail and canvassing to promote the governor’s fiscal agenda.

“They supported the governor’s budget, not really any particular aspect of it,” said Susan Lerner, executive director of Common Cause New York, a nonprofit watchdog. “That’s very powerful messaging.”

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