December 19, 2008

Commentary:

State Budget Crisis Proves Painful to Latinos

By Vince Vasquez

New number crunching from state finance officials has revealed that California now faces a staggering $41.8 billion shortfall across this year and next year’s General Fund budget. Exactly how Sacramento lawmakers will close this massive gap is unclear, but a key opinion survey and new developments in the state capitol reveal that Latino residents should play closer attention to how the budget crisis will affect their families in the coming months.

According to results from a new statewide poll commissioned by the San Diego Institute for Policy Research, only 42% of Latinos are either “somewhat familiar” or “very familiar” with the budget deficit. This number contrasts sharply with the familiarity of Caucasians (73%), and Californians generally (64%). The reasons for this information gap are likely to be demographic – the state Latino population is younger, less likely to be registered to vote than the average Californian, and less likely to be following the traditional news cycle. The preferred news sources of Hispanics may also have an impact, as they don’t overlap entirely with most state residents. A 2004 survey from the Pew Hispanic Center found that 24% of Latinos nationwide receive all their news from Spanish-language media, and 44% prefer a mix of Spanish and English language sources. Thus, the mainstream media drum beat on the state budget crisis, which has raged for months, has reached relatively few Latino households, which has profound consequences for the community most at risk of extreme budget-balancing acts.

Earlier this week, the Republican Caucus proposed more than $15 billion in cuts to core government services, including $10.6 billion to K-12 public schools and community colleges, more than half a billion dollars in Medi-Cal cuts, and the elimination of $5 million in state grants to teach school children about the life of Cesar Chavez. Democrats have been critical of these cuts, saying they will hurt working families and those in need, but their plan will also have negative impacts on Californians. The Democrats have presented a budget package with cuts that total less than half the size of Republicans, which range from $4 billion in cuts for K-12 education, $312 million for transportation projects, and $750 million for local public safety programs. While Republican lawmakers adamantly refuse to raise taxes to fix the budget mess, particularly during this historic economic downturn, Democrat leaders are pushing a complex revenue plan that will raise more than $9 billion in state revenues by increasing the rates of income taxes and sales taxes, as well as creating a new oil tax, which is likely to be shifted to consumers at the gasoline pump. Both the Democrat and Republican plans make painful choices and will impact the lives of everyday Californians, but Latinos have strong opinions on their solutions.

Latinos have much at stake in budget deliberations – 47% of all students in the K-12 system and approximately half of Medi-Cal program recipients are of Hispanic background. Not surprisingly, opposition to health care and education cuts is high. 90% of Latino respondents in the opinion poll rejected cuts to education spending, 84% opposed higher education cutbacks, and 84% stood firm against cuts in health and human services. In fact, Latinos are more opposed to cuts in these programs than Caucasians and Californians generally. Opinions on tax hikes are however mixed. Latinos widely support raising taxes on households that make more than $250,000 every year (60% support) and taxes on cigarettes and other tobacco products (86% support), but they reject tax increases that impact broader society, such as sales tax hikes (70% opposed) and car registration fees (71% opposed).

What’s most frustrating for policy makers is that greater public awareness to the budget crisis appears to not create demand for a bipartisan consensus, as Democrats and Republicans who were surveyed and are well informed on the budget mess did not support reaching across the aisle for a solution. GOPers opposed solving the problem by raising taxes, and Democrats opposed broad-based budget cuts, reflecting the current partisan gridlock in Sacramento. Latino residents stand more squarely in the Democratic column throughout this crisis in terms of budget priorities, but the ¾% sales tax increase and 2.5% income tax increase the Democrat lawmakers are proposing may sour deeper support.

No matter how the state budget is balanced for Fiscal Years 2009 and 2010, lawmakers need to seek bipartisan structural reforms that will prevent multi-billion dollar gaps in the future. Proposals for new spending caps and tough budget transparency measures can help significantly reduce overspending, and fair changes to pension benefits for future state government employees must also be considered. Budget cuts must be human and responsible, and reflect the realities of the diverse needs of our California community. If residents are to retain their quality of life, it’s clear that Democrat and Republican politicians must emerge from their partisan trenches and build the consensus we ourselves lack.

Vince Vasquez is the senior policy analyst at the San Diego Institute for Policy Research.

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