February 27, 2009

Commentary:

California’s Budget: A Tough but Necessary Choice

By Assemblymember Mary Salas

California had an unprecedented $41 billion budget deficit. The deficit was larger than the total budget of most states! California was at the edge of bankruptcy.

The budget package that was just approved—a mix of budget cuts, tax increases and borrowing—stops the danger of fiscal insolvency for the state. Let me be very clear: the economic consequences facing the state for doing nothing would have been monumental.

The budget just approved will result in $14.8 billion in spending cuts, $12.5 billion in new revenues, and $5.4 billion in borrowing from future state lottery proceeds. The only way to solve a crisis of this size is through balancing spending cuts with new revenues.

Just think of some of the disastrous consequences that would have occurred without this compromise deal: Deep cuts to law enforcement, K-12 schools, public universities and an overcrowded prison system. The Department of Finance was prepared to halt work on approximately 374 construction projects valued at $5.58 billion. Just for shutting down and restarting these projects would cost the state an additional $392 million, plus paying penalties and damages to contractors. And more than 90,000 jobs private sector jobs could have been lost without a budget compromise placing more of our families at risk of bankruptcy or losing their homes.

By passing this difficult budget with a combination of cuts and revenues we allow infrastructure projects to move forward, allow our teachers to continue teaching, allow small businesses to keep getting paid, allow taxpayers to get the tax refunds they are due and allow California to be eligible for the billions of federal stimulus dollars that will now be forthcoming.

Could the budget have been balanced through cuts alone? The answer is a resounding NO unless we destroy the state as we know it. You could fire all 205,000 state workers under the governor’s authority and that still wouldn’t close the $41 billion deficit. Without any state workers there would be no environmental protections, no transportation workers, no individuals to assist with state unemployment insurance, no consumer protection oversight, no one to make sure that our food supplies are safe and free of harmful pesticides, no state firefighters to battle wildfires.

In addition, all 160,000 prisoners would have to be released because there would no longer be a Department of Corrections with its guards and wardens. All of the state parks would also be closed because there would be no state parks service. Hospital emergency services would also need to be eliminated because the hospitals depend on state monies to keep their doors open.

All state funding to the University of California, the California State University system and the California Community College system would be stopped. Our entire higher education system would literally come to a crash.

That’s not to say that voting for this budget was an easy decision. It wasn’t. Billions of dollars of cuts were necessary and it will hurt real people and institutions. But the alternative would have been much worse. California deserves a budget that reflects its values and its priorities. This budget, while imperfect, saves the state from fiscal insolvency and keeps people employed.

Assemblywoman Salas represents the 79th Assembly District

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