Interview with Tom Campbell, CA Gubernatorial candidate
I spoke with Tom Campbell for over 45 minutes on a range of topics, and I’ve split my posts on that discussion into two posts, one here and one over at The Next Right. Here at QandO, I’m going to cover the more policy-oriented topics, and over at The Next Right the topics have to do with new media, elections, and the politics of fiscal conservative governance.
It pains me to see my native California in such dire straits. The state is broke, farms are collapsing, and unemployment is over 12 percent. The public colleges that might help retrain a lot of those workers are slashing classes.
The tax and regulatory burden has finally overcome the state’s many natural advantages, leading its citizens to abandon the Golden State. And these are people who can’t be having an easy time selling their homes: California, one of the first to suffer in the real estate collapse, is still near the top of the heap in foreclosures.
California, as we say, has issues. I talked with Tom Campbell about some of the most important ones: the budget deficit, jobs, health care, education, water and infrastructure.
When Campbell speaks, he directly connects his principles to his specific policies. Campbell has tried to draw more attention to a fundamental question he’s raised at debates: “Do we have more government than we need?” So he lists a handful of redundancies and waste in the state bureaucracy and suggests: “Shouldn’t we always explore questions of public policy by asking, ‘If there’s a problem, is the answer the government or is it the private sector?’”
“The immediate [issues], of course, are compelled by the budget of California.” And it’s the immediate issues that now compel California voters to explore the fundamental. When I suggested to Tom that, given the dominating trend in California toward more and more government, he has a pretty strong headwind he’s sailing into, he replied, “Yep, I do, but I also have a hurricane behind me. The hurricane is the budget deficit.”
Campbell pointed out that even after accounting tricks like paying state employees one day later to push 1/12 of their costs into the next fiscal year, this year’s budget will be out of balance by at least $8 billion, after having been out of balance by $24 billion last year. Even for a state as large and wealthy as California, those are staggering shortfalls.
I asked what the state can do from its current position, and when I stated that unlike NYC, California can’t be put into receivership, he pointed out that something similar is possible:
The state cannot go bankrupt. It will not be put into receivership. But there are some who are calling for the federal government to bail us out, and with that will come federal government controls not unlike what were imposed by the Municipal Assistance Corporation in New York back in the ’70s. I think that’s the wrong way to go, but believe me, there are people who are advocating it right now.
“The other cataclysmic outcome,” he says, is “if a bondholder says, ‘I want to be paid,’ and the state says, ‘Well, we don’t have the cash,’ a federal court will order assets of the state be sold, and sold at auction in a bad market, in order to pay off the bonds.” He’s not enthusiastic about selling state assets at firesale prices (though he’s open to selling some assets on better terms), and he dreads the “devastating” blow to California’s long-term credit reputation.
Democrats agree that the budget is unsustainable. But their preferred solution is tax hikes, which require a 2/3 supermajority to pass under the current state constitution.
Campbell’s Republican opponents, seeing the wretched tax environment in California, have endorsed immediate tax cuts to try to attract people and businesses back into the state to create a strong economic recovery.
But Campbell asks, what happens if California doesn’t have a strong economic recovery just in time? Then the state has just piled onto an already-huge deficit. Campbell doesn’t think it would be prudent to cut taxes and hope for the best. He says that the “hard-learned lesson” is that starving the beast just leads to bigger deficits.
So instead, he supports making the hard decisions first: cut spending now, which is much more politically difficult than cutting taxes. In fact, he’s laid out exactly what he wants to cut from the budget (more on that at The Next Right).
Campbell does say that after you cut spending, then you can cut taxes dollar for dollar later. Much later, perhaps: Campbell also favors saving the equivalent of a year’s budget over perhaps 10 years, so that the legislature spends only the money that they raised last year, instead of spending on the basis of ever-optimistic revenue projections.
It’s a message short on comforting assurances. Campbell is lighting the hard and narrow path back to fiscal responsibility, and his plan requires vigilance to stop the hungry legislature from raiding the treasury – either for spending or premature tax cuts.
I asked Campbell how he would translate electoral victory into enforcing such painful measures. His answer is to focus on one fundamental issue that’s finally resonating in California: “don’t spend more than we have.” Under that umbrella, he could pursue fiscally conservative solutions on a range of specific policies, and apply pressure directly to legislators in their districts if they failed to rein in their spending.
With all that has to be done, I asked Campbell if there’s time to save the state, “before the hurricane hits.” He says we’re at the brink, but not quite over the brink. And he agrees it’s a tough situation.
For all the cuts that Campbell proposes, he still manages to promise that he’ll protect funding for the largest expense in the state budget: education.
Campbell has said he wants to secure adequate funding for schools, and has been clear that he doesn’t want to slash teacher pay; in fact, on his website he says he’d like to increase funding per pupil, pay teachers better and cut class sizes. But in turn, he demands widespread reform of the public schools: merit pay, caps on administrative expenses, and more.
Early on, Campbell asked some basic questions about state-mandated bureaucracy. “We require by state law, for example, a county board of education in every county; why? Why not devolve power to the school districts?” And then, “We have a superintendent of public instruction elected directly, and we have a Department of Education with a Secretary who reports to the Governor; why?”
One of his proposals is particularly intriguing: providing scholarships for children in the poorest and worst-performing 1% of schools to attend private schools instead. I asked him where he saw that program going, and its prospects for success.
He said the model is the similar program in DC that was recently shut down by the Democrat-controlled Congress, a decision he says “was terrible. That was paying more attention to the organized labor than to the children who were benefiting from the scholarships.”
He stresses that since, “by definition, you’re only addressing the very worst schools,” then “you will be less likely to do harm to the public school system in general.” As Campbell, a long-time teacher, says it, it sounds like more than a political consideration to him.
But he says that
if this works for the lowest-performing 1% schools, then we can expand it. If it fails, we will have experimented with a small amount of money and tried to do good – nothing wrong with that. The key, in other words, is incremental. Only expand it if it works, but if it does work, expand it in such a way that the opposition cannot claim you’re undermining the public school system. You’re not: you’re giving chances to people and their children who otherwise wouldn’t have a chance.
Campbell is ambitious about reforming California’s health care policy. In the development of one of his policy centerpieces, he took a look at how much the federal and state governments spend on Californians who can’t get medical care on their own ($42 billion) and divided by the number of people they cover (7.8 million), which yields an average of $5,385 – roughly $1,000 more than an average individual policy, which itself is more expensive per person than a family policy.
In other words, without creating any new government structures, particularly those being proposed in Washington, if the people’s contributions through taxes were simply used to purchase what’s available on the private market, you’d save almost $1,000 per person.
When I asked about the federal waivers required to enact such a plan, he highlighted his substantial experience in all three branches of the federal government and said, “I think an effective governor is somebody who would know which waivers to ask and have a good chance of getting them.”
He also briefly remarked that, with a shift from government solutions to private markets, we must “obviously do all you can to improve competitiveness in the private market.”
WATER ISSUES AND INFRASTRUCTURE
Campbell sees a strong connection between California’s water issues and some key economic problems plaguing the state. “The economy of our state is very closely tied to agriculture,” he says. “The fundamental is that California’s biggest industry is agriculture to this day; that agriculture is dying in the Central Valley for lack of water; that we still see close to 12% of the entire available water that falls on the state running off to the Pacific Ocean.”
After rattling off the numbers on where the water that falls on the state ends up, he plumbs into specific issues. He talks about using mitigation strategies to prevent harm to wildlife, and he discusses the lasting damage to agriculture in the state.
His solution? “If you simply create more storage and more conveyance systems, you don’t do any harm to the environment, you don’t take water from any other use, but you make it available to those who otherwise are going to have to leave the state and the land is going to go fallow.” That also served as an answer to my question about how Northern Californians feel about the water that SoCal pulls downstate.
He assures that these infrastructure projects wouldn’t represent a permanent increase in the size of government – it’s purely project finance. And he says that “some of our greatest projects built were built by private industry: Bechtel Corporation, for example, on the Hoover Dam and on the Golden Gate Bridge.” To build more water storage and conveyance doesn’t require larger state government, he says, and “in fact, in most instances, it’s much wiser to contract with private industry to do it.”
One aspect of the water situation tied in once again with the feds: “The federal government has been asked by the governor to moderate its position regarding the water that is being held back, and the federal government has refused to do so.”
CALIFORNIA AND THE FEDERAL GOVERNMENT
It became increasingly clear that California has a lot riding on federal policy, and when I asked him if he was confident that the federal government as presently constituted would be willing to play ball with him. Apart from repeating that he has experience with the federal government, he said “it’s essential that we reach agreement with the federal government,” and if they “choose to say no, the people of California will suffer accordingly – higher cost and less quality service.”
He then noted, not archly, that we regularly get turnover in Congress and in the White House via elections.
Policy is Campbell’s wheelhouse. He has broad experience in both federal and state government, toward which he has applied his economic expertise and developed a sense of what’s politically practicable. And he’s clearly spent a great deal of time studying the issues facing California, leading to a detailed set of policy recommendations which he is willing to discuss candidly.
He’s not one to be glib about general economic conservatism. He doesn’t offer pat assurances that cutting taxes will balance the budget, or expect the words “free market” to end the debate. Instead, he tirelessly explains how bad policies make for bad consequences, making the state’s failures concrete for those affected, and he has specific proposals to address those failures. He counsels prudence when the state’s irresponsibility has created a crisis big enough to reach the public consciousness.
There’s a recognizable libertarian foundation here – including his social views, which I explore more at The Next Right. He clearly believes that freedom is good, and wants to expand individuals’ control over their lives. But unlike many libertarians, his politics are incrementalist (though accelerated by the economic crisis), and he doesn’t deviate from good-governance arguments in favor of easy ideological talking points; he’s in this to win and make policy.
To read how he plans on doing that, click here for Campbell’s take on new media, elections and governing. Also be sure to check out Campbell’s website, Campbell.org.