March 13, 2009

Commentary:

Misplaced Priorities in California State Budget Saga (Again)

By Willie L. Pelote, Sr.

A new study by the Pew Center on the States has found that a record-high seven million Americans is either in prison or on probation or parole. That’s one out of every thirty-one adults. This finding highlights how our society has been dramatically transformed over the last twenty-five years, as prison spending has surpassed funding for public education, transportation, and social services. When these facts are seen within the context of the various state budget crises that have wracked California over the same time period, it is easy to see that the root of our budget problems in the Golden State comes down to a misplaced sense of priorities as well as a lack of revenue.

The state budget is a moral document, setting the tone and direction for social policy in the Golden State through the programmatic spending decisions that are given priority each year.

There is nothing remotely honorable or responsible about the budget that Arnold Schwarzenegger signed on February 20.

Our schools and hospitals will continue to fall into disrepair and despondency. Tuition rates will spiral at public universities, and quality of life in the Golden State will deteriorate at the same rate as the tax burden of Californians who have to work for a living increases.

This, despite $8 billion worth of federal stimulus money from the Obama administration and $12 billion worth of new revenues from sales and income taxes and a higher vehicle license fee (VLF).

In fact, part of the budget deal is based on pushing California taxpayers further into debt.

On May 19, a special election will be held in which voters will be asked to approve a controversial ballot measure (Proposition 1C) authorizing the state to borrow an additional $5.4 billion against future lottery revenues.

Because the measure would allow for unlimited future borrowing, it squarely contradicts Schwarzenegger’s and the Republicans’ calls for less state spending.

Another proposed measure (Proposition 1A) on the same May ballot would lock in state spending at unrealistic levels and is fiscally irresponsible and intellectually dishonest.

Again, our budget problems in California are due to a lack of revenue and misplaced priorities.

California has a structural deficit that is directly related to an unwillingness by both Democrats and Republicans to raise revenues over the short term and to create new sources of revenue over the long term.

Additionally, because California requires a two-thirds majority vote to pass a state budget, the Republican minority has the power to hold the entire state to ransom to satisfy their ideological requirements.

This point is illustrated by the fact that after Republican State Senator Dave Cogdill voted in favor of the new state budget, the Republican caucus ousted him as senate minority leader, replacing him with Dennis Hollingsworth from Murrieta, who has since asked to renegotiate the budget to strip out the recently approved sales and income taxes.

Some have called for a constitutional convention to change the two-thirds requirement for approval of a state budget to a majority vote.

This alone will not fix our problems.

This is because California is the only state in the union that requires a two-thirds vote to pass a budget and to raise taxes.

It makes no sense to lower one threshold without lowering the other.

Unfortunately, while Republican posturing over revenue increases has become an annual event at the state capitol, the temerity of the Democratic majority in the face of said opposition has been shameful.

The California Budget Project (CBP) reports that in order to gain the three Republican votes that were needed to pass the latest state budget, Democratic leaders capitulated to Republican demands to permanently reduce the income taxes of multinational corporations operating in California.

This will cost California almost $3 billion in revenues over the next five years.

Similar measures enacted since 1993 to win over Republicans intent on obstructing passage of previous state budgets have cost the state an estimated $12 billion this year.

We have been giving away future revenues in order to get political agreement on budgets that are devastating the very institutions that are designed to protect us in the worst of times.

And this has been going on for 30 years.

Taxes are the price we pay for a civilized society.

Legislators who claim commitment to advancing the common good through public service must surely recognize that the network of social structures constructed by California taxpayers over the last 30 years is the basis for our economic and political progress.

Just as they must surely recognize that enacting budget cuts in conjunction with irresponsible tax giveaways undercuts California’s position as the world’s sixth largest economy.

It’s time to break the pattern of stifling new revenue solutions while enacting tax policies that allow the wealthy few to shirk their fiscal responsibilities.

First, we need to vote down each and every one of the ballot measures in the May 19 special election.

Then we need to end tax giveaways to the wealthy few, dramatically reduce corrections spending as Kentucky, New York, Virginia and Wisconsin are doing, and get big business to pay its fair share.

Anything less would be uncivilized.

Willie L. Pelote, Sr. is an Assistant Director of the American Federation of State, County and Municipal Employees (AFSCME), AFL-CIO.

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