Jerry Brown's Tough-Love California Miracle

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Without new revenues, Brown warned, voters would face a new round of cuts that would decimate K-12 education. And he meant it. "There were no more games to be played with the budget, no other places where one could cut," recalls Gavin Newsom, the state's lieutenant governor. But even raising money for schoolkids was a tough sell in the state where the nation's anti-tax hysteria first took root a generation ago. "Brown was fighting against 30 years of lies that a tax cut is the greatest good in the republic," says fellow Democrat Gov. Martin O'Malley of Maryland.

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Brown's all-in gamble paid off. Austerity-weary voters approved Prop 30 by a 10-point margin last November. And despite the warnings of right-wing ideologues, higher taxes on the wealthy have not sent millionaires running for the borders or crippled California's "job creators." Far from it: The Silicon Valley economy is roaring, driving 3.5 percent growth statewide; California's jobless rate has tumbled to 8.7 percent, the lowest since 2008; and the housing market is on a tear. Entrepreneurs are doing so well, in fact, that state coffers got an unexpected bump this spring, thanks to a windfall of $4.5 billion, largely from capital gains.

Signed in June, Brown's newest budget will reverse cuts to public education and certain health services, put the state on a path to pay off its debt – and even create a $1.1 billion rainy-day fund.

"After two and a half years of struggle and difficult times," Brown declared this spring, "California's budget is balanced and sustainable into the future."

The land that gave us Richard Nixon, Ronald Reagan, tax revolts and the nation's harshest three-strikes laws, California was a reliable red state in presidential elections from the late Sixties through the 1980s. But in a script that should sound familiar to anyone who follows national politics, California Republicans undermined their own easy dominance of state politics by moving abruptly to the right, alienating the state's increasingly urban and Latino population with harsh stands on social issues and get-tough immigration laws.

In short, Golden State Republicans have been locked in the same "demographic death spiral" that South Carolina GOP Sen. Lindsey Graham says haunts the national party: They're too old, too white and too rural in a state that's trending young, multicultural and urban. "California Republicans are hopeless," says Carrick. In the 2012 election, the party all but crashed and burned, as voters elected a Democratic supermajority in the legislature, rendering the GOP moot.

With the budget in balance and Republicans sidelined, Brown has shifted gears, and the Golden State is emerging, again, as a laboratory for ambitious progressive governance. "Ideas go West to East in this country," says Mickey Kantor, the Los Angeles attorney and former commerce secretary, who also managed Brown's 1976 presidential bid. "We've got to do big things as a country. And with a legislature of two-thirds Democrats, Brown ought to be able to get big things done."

Thinking big has never been Brown's problem. When he first took office in 1975, the 36-year-old governor was like a New Age Bulworth. He mixed expansive ideas for the future with unvarnished contempt for the pomp of politics. "I don't believe in the cult of personality," he declared, "having my portrait hung all over the place like Ronald Reagan or Mao Tse-tung."

The son of former governor Pat Brown – a gregarious figure known as the "Architect of the Golden State" for his expansion of California's university system, highways and water infrastructure – Jerry Brown was more cerebral and policy- focused. He'd studied Classics at Berkeley, law at Yale and the New Testament during a three-year detour in a Jesuit seminary. In Sacramento, Brown powwowed with futurists like Carl Sagan and Buckminster Fuller. He dated rock superstar Linda Ronstadt. A Chicago columnist dubbed him "Moonbeam," a name that has haunted him ever since.

Some of Brown's thinking was literally celestial – he once called for California to launch its own space academy. But most of what made Brown seem alien to the Eastern establishment was just environmentalism far ahead of its time. "He preceded Al Gore," says Tom Hayden, the counterculture icon whom Brown appointed as the first chairman of his solar-energy council. "He's out there with solar beanies and rooftop collectors, and it's 1974 and people think he's a lunatic."

Brown's first gubernatorial legacy was one of pathbreaking environmental reform. He cleaned up L.A.'s smog and created tax credits for solar and wind power. Most important: He decoupled utility profits from consumption, rewarding efficiency. While nationwide demand for electricity has soared 50 percent since the Seventies, California's has remained nearly flat – avoiding the need for building some 30 power plants.

A generation later, Brown has picked up where he left off. In 2011, he signed a law requiring California to generate one-third of its power from renewable sources by 2020 – including a target of 1 million solar rooftops. He is also reshaping the auto industry, mandating that 15 percent of cars sold in California by 2025 be electric. (Since California has the largest auto market in the country, this mandate will have an influence nationwide.) "We're the most aggressive in the Western Hemisphere in terms of our clean-energy goals," he says. Cap-and-trade may be a dead letter in Congress, but Brown has launched one of the world's most advanced carbon-pollution trading markets, committing the world's ninth-largest economy to reduce its climate pollution to 1990 levels by 2020. "It can serve as a model for the rest of the country," says Rep. Henry Waxman, the ranking Democrat on the House energy committee.

The governor recently solicited a climate report through UC Berkeley, now signed by more than 1,300 scientists, that lays out the consensus on what's required to preserve "humanity's life-support systems." "We've got to wake up!" he insists. As he travels his state, Brown foists the document on every captive audience he encounters, whether it's a convention of nurses, a meeting with his state's top mayors – even the president of China, where Brown traveled last spring.

"Jerry Brown is an American hero," says Dr. Michael E. Mann, a leading climate scientist and author of The Hockey Stick and the Climate Wars. "When it comes to climate change, he gets it – the science, the impacts and the urgency of action."

Curbing climate pollution is just one way Brown is working to breathe new life into the ambitious agenda President Obama pursued in his first term. The nation's most populous state is also leading the country in the implementation of Obamacare – providing a critical test case that a model pioneered in Massachusetts can work, at scale, in a massively diverse state where nearly one in four residents lacks health coverage. "It's not too much to say that the success or failure of California will determine the fate of the legislation going forward," says Tanden, who helped craft Obamacare as a senior administration adviser. "I believe it will be a success – they're way ahead of everyone."

In June, Brown signed legislation adopting Obamacare's generously subsidized expansion of Medicaid to the working poor. Ever budget-conscious, Brown had been wary of the "big costs" and "big unknowns" of growing a program that already accounts for 20 percent of the state's general fund. But unlike GOP governors – such as Perry in Texas – who have rejected the program out of hand, Brown pragmatically embraced the challenge and the opportunity to cover 1.4 million state residents. "We're going to move with commitment," Brown said, "because I do believe people do need decent health care."

California also made headlines this spring when it unveiled sample rates for individuals in its new insurance exchange, which will serve up to another 5 million residents. Many had predicted sticker shock as premiums adjusted to cover Obamacare's expanded benefits. Instead, the increases were modest and plans affordable. Even before federal subsidies, 25-year-olds can get coverage for $141 a month; 40-year-olds for $219. The system is working, health advocates say, because California used its bargaining power to force insurers to offer uniform products and compete on price. "We held insurers' feet to the fire," bragged Peter Lee, the governor's executive director for California's insurance exchange.

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During a recent pit stop in Silicon Valley, Obama himself praised California's execution of the health care law: "Competition and choice are pushing down costs," the president said, "just like the law was designed to do."

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