By Jean Ross
Special to Calbuzz
It’s been a couple of weeks now since Gov. Schwarzenegger signed the budget agreement, and most of the mainstream media have long moved onto to the next election and the next crisis.
But those of us who look at the budget for a living are just getting started on the long task ahead: Understanding the impact of this and other recent agreements on the state. Though there’s much work to do, here are some initial observations about the state of the state’s budget and what it means for California’s future:
This budget agreement includes some “chewing gum and bailing wire” fixes – and that’s okay right now. There has been some criticism of the one-time “solutions” included in the recently signed budget agreement, what is commonly known as “smoke and mirrors” or “chewing gum and bailing wire.”
But without these one-time fixes, legislators and the governor would have had to cut spending even deeper, a move that experts tell us would only further harm an already wounded economy. California can’t deficit spend until a recovery kicks in, as the federal government can, and thus is forced to resort to costly and complicated alternatives, such as borrowing local governments’ property tax revenues.
But in the scope of things, as California faces its most serious economic crisis since the Great Depression, that’s not the worst thing policymakers could do right now.
Over the past decade, state spending on education is down, while spending on prisons is up. Despite California’s maddening two-thirds vote requirement to pass a budget or any tax increase, crafting a state budget is still ultimately about choices and values. Charts included in the Governor’s summary of the recent agreement paint a grim picture: a state that’s investing less over time in its children and youth, and more over time keeping prisoners behind bars.
Cutting spending for colleges while prison spending spirals out of control raises serious questions about our values and our ability to compete successfully in the world economy in the future.
This budget increases the urgency of national health reform. Taken together, legislated budget cuts and the Governor’s line-item veto pen endanger health coverage for well over half a million, and perhaps as many as 900,000, California children through the Healthy Families Program. The Governor’s veto pen zeroed out state support to safety net clinics and legislated budget cuts eliminating funding for immunization programs, ended dental care for most adults on Medi-Cal, and cut deeply into other basic health programs. The U.S. Census Bureau recently released data showing California has the dubious distinction of having the 6th highest percentage of children lacking health coverage among the 50 states. Never has a comprehensive national approach to health reform seemed more urgent or necessary.
Massive cuts were made to education, health care for children, and the safety net while legislators preserved corporate tax breaks that will cost the state upwards of $2.5 billion a year. Unbeknownst to many Californians, budget agreements passed by the Legislature last September and this February included massive new tax breaks for a very few, very large corporations. There are many reasons to repeal these tax breaks, reasons that we’ve outlined in an analysis and in a recent op-ed. Repeal them because of process: they were slipped into budget agreements behind closed doors, without public hearings. Repeal them because they will cost upwards of $2.5 billion a year when fully implemented, and carry a price tag California can’t afford. Repeal them because they will benefit only the state’s largest and most profitable corporations. Repeal them because there’s little evidence showing that the most costly of the tax cuts has any impact on job growth, contrary to proponents’ claims. Repeal them because if we do, that will mean more funding for programs that serve the common good: schools, universities, and health care for uninsured children.
The very things that were cut from this budget are exactly what California needs in this struggling economy. When times are tough, public dollars provide a steadying hand. Safety-net programs keep families afloat while bringing money into local communities; a strong educational system provides a second chance for workers to gain the skills to compete in a globalized economy. These are the very areas that were cut in the state budget. California’s recently enacted budgets aren’t just failing to plan; they’re failing their citizens right now. The California Budget Project joins the chorus of groups calling for budget reform: We need to reform the initiative process. We need an end to the two-thirds vote requirement for budgets and tax increases. We need to bring our tax system into the 21st century, so it provides sufficient revenues for the services and schools Californians expect.
Jean Ross is the executive director of the California Budget Project, a nonpartisan public policy research group. For more information, go to www.cbp.org
