Posts Tagged ‘poor cuts’

Why State Budget Cuts Always Screw Poor People

Saturday, May 30th, 2009

michaelcgenestCalbuzz sat in on a conference call with state Finance Director Mike Genest on Friday, in which he detailed the latest $3 billion of cuts Governor Arnold is proposing to close the Deficit That Ate Sacramento.

We’ll leave it to the indefatigable Weed Eaters of the Capitol press corps to explain the full, acronym-laden complexities of the newest whacks (bottom line: a 5% pay cut for 200K+ state employees, $680 million more from schools — total cut now = $6B — and a new $1.3 billion in misery for poor kids and folks who are old, sick or both).

The most salient, big picture point, however, came in Genest’s clear and direct response to a great question by Judy Lin of the AP, who asked why it was that all the pain of budget cuts seems to fall on the poor. Said Genest:

“If you look at what the government does, the government doesn’t provide services to rich people. We don’t provide many services even to the middle class. . .”

Amid the constant and confusing flurry of numbers in the ever worsening budget mess – this was the third revision in nine days of the budget plan approved three months ago — Genest reminded everyone of a few, basic facts that often get lost in the daily dizzying reports about California’s fiscal meltdown.

1. “The budget” that’s now being cut, re-cut and re-re-cut is the state’s General Fund. Financed by income, sales and other general taxes, it represents only about 70% of California’s total budget. The other 30% includes stuff like the DMV, CalTrans and various bond funds and is financed by earmarked money, or user fees like gas taxes or license registrations, and is doing fine.

2. The bulk of the General Fund budget for the current fiscal year, which totaled just over $100B when it was approved last September, pays for three big items in particular: public schools, health programs, and welfare benefits for the poor, aged, disabled and infirm.

3. That $100 billion has now been reduced, in real dollars, by 11 percent since September; with the latest reductions announced yesterday, it will be cut another $8 billion for the fiscal year that begins July 1, leaving $83.5 billion in general fund spending.

“You have to cut,” Genest said, “where the money is.”

FYI: That’s Willie Sutton, who, when asked why he robbed banks, famously said (or didn’t really), “Because that’s where the money is.”