Saturday, January 22, 2011
California Budget Crisis-Today
I just returned fro a Town Hall with Senator Darrell Steinberg held about the state budget crisis at the Belle Cooledge library in Sacramento. As you know, Senator Steinberg in the Senate Pro Tem ( Democratic Leader) of the Senate, thus he has one of the major inputs on the budget.
Senator Steinberg started with a general view of the budget and the political situation of the coming votes. Essentially Governor Brown and the Democrats are proposing 12.5 Billion in budget cuts and proposing passing a special initiative to extend the current ( temporary ) tax increases for 5 more years to recover 12.5 billion in revenue.
The room was packed to overflow with persons some of whom agreed with the Senators argument that these cuts were necessary and others who disagreed and argued that these cuts were destructive to life and opportunity. Advocates for the disabled, for child care workers, teachers, and others made their case.
California can continue the current process of cuts and reductions. The fiscal crises of the states – all the states- has caused major cut backs and retrenchment and made the economic crisis approach a depression. The state cut backs are greater than the federal stimulus producing a prolonging of the crisis for working people. The proposed state cuts will make the recession longer and deeper than is necessary. Continuing on the present direction produces protection of obscene profits for billionaires along with growing poverty and hardships for the majority.
The Brown- Democrats approach would follow the process of Ireland and Greece and dramatically cut services and impoverish the economy. Then, since the state is poorer and has less income you will need to raise more taxes and cut more services all in an effort to protect the excessive profits of bankers and bond holders. This produces a race to the bottom. The event was reported on Page 3 of the Sunday Bee.
Detailed copies of important budget documents are at the Legislative Analysts office http://www.lao.ca.gov/ including an overview, and at the California Budget Project http://www.cbp.org/
The current plan is to pass a budget, probably the Democrats budget by March 15. This budget would require that voters also pass an extension of the current (temporary) taxes for 5 years in a June election. This is similar to Propositions 73.74. & 75 two years ago. If the voters fail to pass the tax extensions the cuts would be extended to a second 12.5 billion of cuts ruining many of our current services. A task of the Sacramento Progressive Alliance is to decide if we want to support these tax extension plans. ( We lost this election last time).
Eric Vega raised an alternative approach which I was prepared to speak to, but was prevented from speaking due to the many other speakers some on task, some ridiculous. This is the argument of taking a high road to creating jobs. Manny Gale made an impassioned statement that the budget cuts were an issue of values, who is to be valued. Nell Ranta was assertive in wanting to know why corporations were not paying their fair share of taxes. She and others pointed out that over 50% of corporations in California pay no taxes at all.
Budget cutting to balance the budget will not get us out of this hole. Look at Ireland, Greece, or Spain. Budget cuts only start a downward spiral of pain. We can not simply cut our way out of the crisis, budget cuts and lay offs make the recession worse.
The current dominant themes with the political elite of both parties and in the media are that cuts are necessary, public employee unions should give up more, and taxes should not be raised. We need to contest against these basic themes.
At least half of the current state budget crisis was caused by the national economic crisis. This crisis was created by finance capital and banking, mostly on Wall Street ,ie. Chase Banks, Bank of America, Washington Mutual, AIG, and others. Finance capital produced a $ 2 trillion bailout of the financial industry, the doubling of the unemployment rate and the loss of 2 million manufacturing jobs in 2008. 15 Millions are out of work. You and I, and did not create this crisis.
While their will be cuts, we on the left should explain an alternative, an expansion of public jobs and fiscal stimulus. The money for such as stimulus is available. Government must protect and empower our citizens. To foster prosperity it must prepare the young for civic participation. Protection includes health care, social security, safe food, environmental protection, safe streets, job protection, etc.
Our economy needs roads, bridges, telephone lines, communications systems, energy and quality education. These services make freedom and prosperity possible. Conservative tax cut fever ignore the economies need for infrastructure.
We need to build the promise of California. The promise is an opportunity for a good job. That promise is a good job for all and the opportunity to have of a good career. The budget cut- tax cut mania does not promote good jobs and careers. It is not true that budget cuts are the only option.
We need to invest in the future. There are funds available to do this. A list is here
Electoral Chair. Progressive Alliance