California's Budget Fiasco
by: Sasha Abramsky
The Guardian UK: 27 July 2009
California's new budget ends months of political gridlock, but the cuts
to state services are hardly cause for celebration.
Now, nearly a year after the fiscal collapse, get ready for structural
readjustment.
California, the richest state in America, finally passed an emergency
budget revision on Friday that bears shocking similarities to the budgets
foisted on third world countries by the World Bank and IMF in decades past.
Seeking to close a $26bn budget gap, legislators dithered for months, as
California's credit rating collapsed, as its finances sunk so low that it
had to start issuing IOUs to vendors, as its school funding withered. They
seemed to be waiting for a miracle (read: a Washington bailout), and when
the miracle didn't materialise, they seemed to hope they could run the clock
down with endless debates and little action. The Republican minority blocked
all tax increases, and the Democratic majority stood in the way of all
meaningful service cuts. As revenues collapsed, Sacramento's political
leadership gave new meaning to "gridlock".
Finally, they've had to act. And, as everyone knew it would be, it's
horribly ugly. The new budget, overwhelmingly, is about cuts rather than tax
and revenue increases, and, not surprisingly, an awful lot of vulnerable
people will be battered.
The highlights: billions of dollars in spending cuts to already
cash-strapped schools. A sharp contraction in welfare, healthcare and
in-home services to the poor and sick, with an estimated 40,000 Californians
immediately losing in-home aid. A wave of closures of state parks. A forced
borrowing of billions of dollars from cities and counties. An indefinite
three-day a month furlough (equivalent to a 14% pay cut) for all state
employees. And a huge, and likely irreversible, reduction in the state's
commitment to its once-vaunted public university and community college
system. Already, California State University faculty has voted to accept
furloughs. And, soon, pay cuts will be implemented throughout the University
of California system that range from 4% to 10% salary reductions.
Prisons, too, have been cut, but by less than other agencies. The
Republicans, with the backing of crime victims' groups, threatened to
torpedo the entire budget deal unless some of the deeper prison funding cuts
were withdrawn.
The only good news: the assembly prevented the state from raiding $1bn
in transportation funds controlled by local governments, and they also
blocked oil drilling off the beautiful Santa Barbara coast - a plan
Republicans argued would bring in hundreds of millions of dollars in leasing
revenues.
Exhausted state politicians, who had been working around the clock to
pass this budget, congratulated each other Friday afternoon as the last of
the many bills cleared the assembly. But, truth be told, this is a budget to
weep about rather than one to toast. While the cuts were unavoidable given
the utterly blinkered failure of Republicans to countenance tax increases,
it represents a catastrophic and shameful failure of governance.
It's a failure that has been expanding in fairly open view like an
infected boil for years now.
The ingredients of the failure: too many special interests feeding off
the public trough, at least in part through pushing spending proposals via
the initiative process. A public willing to mandate a generous array of
programmes into existence but unwilling to cough up tax revenues to fund it.
A political culture that follows public opinion rather than seeking to lead.
An initiative process that almost guarantees political incoherence. A
tax-and-budget process that guarantees annual political stalemate. And a
term-limits system, passed in the heyday of anti-government rhetoric in the
1990s, that discourages expertise and too often discourages high-calibre
personnel from seeking public office.
The past couple year's economic turmoil brought all of these crises to a
head. 24 July 2009 marks the day that the boil was lanced.
Will things get better now? Or will the lanced boil grow infected,
creating an evermore toxic political climate and an evermore brutal fight
for diminished spoils?
Already, cities are muttering about suing the state to prevent it from
forcibly "borrowing" their money. Already, the public service employees'
union, representing nearly 100,000 of the state's nearly quarter-million
workers, is talking about a strike ballot. Morale at every level of the
public sector in California has collapsed.
It reminds me of that old curse: "May you live in interesting times."
The Golden State's imploding. But, hell, the stock market's soaring, and the
big banks are posting profits again, so things must be going in the correct
direction again, right?
***
From: John Johnson
Community Rally Against California Budget Cuts
Protest Gov. Schwarzenegger!
Restore All Funding for People's Needs!
Today, Friday, July 31, 5-7pm (Press Conference at 6pm)
At the Governor's L.A. Office
300 S. Spring St., Los Angeles 90012
Join an ad-hoc coalition of community and service organizations at a
rally and speak out to denounce California's recently announced cuts
to social services and demand the full restoration to programs that
help people in need. The $15 billion in cuts will severely impact
much-needed programs, like health care for the poor, public
education, child welfare, HIV/AIDS services and so many more. Gov.
Schwarzenegger, a multi-millionaire, along with state lawmakers,
approved the cuts after refusing to increase taxes on the richest
banks, corporations and individuals in the state. This week,
Schwarzenegger announced another $500 million in cuts that will
affect the most vulnerable people in society:
-$80 million that pays for workers who help abused and neglected children;
-$50 million from Healthy Families, which provides healthcare to
children in low-income families;
-$50 million from services for developmentally delayed children under age 3;
-$16 million from domestic-violence programs;
-$6.3 million from services for the elderly; and
-$6.2 million more from parks, which could result in the closure of
100 California state parks.
It's time to fight back! Affected families, teachers, HIV/AIDS
services advocates, community organizers, attorneys and others will
protest the budget cuts this Friday. Be a part of this struggle to
win back what we need to survive!
Initiated by the ad-hoc coalition, Communities United for Justice.
Initial members include Latino Movement USA, Justice First, ANSWER
Coalition, Full Rights for Immigrants Coalition, Echo Park Community
Coalition, Students Against HIV Service Cuts and other non-profit
service organizations.
For more info call 213-251-1025 or email answerla@answerla.org.
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