The ‘Swollen State’
California’s budget deficit ‘bulk’s up’
California has suffered an additional $2.5 billion blow to its already staggering budget deficit, pushing the official total up to $17 billion. Speculation as to what exactly impacted the budget varies throughout the senate, but Assembly Speaker Karen Bass believes that the collapse in the housing market is definitely one key culprit.
In response to California’s financial woe’s, Governor Arnold Schwarzenegger has submitted a revised 2008-09 budget to the legislature. His effort includes a combination of reductions across most state programs, an increased stream of revenue and issuing additional bonds in order to pay future government expenses.
In addition, the budget fully funds education under Proposition 98—increasing funding to grades K-14 (including community college), over the current year budget by almost $200 million.
Bass agree’s with Schwarzenegger’s preservation of Proposition 98, but feels that a greater financial effort must be given in order to afford the economic support needed. In a recent telepress conference she had this to say:
“The governor kept the funding to Proposition 98, but in order to fully fund education you need $4 billion above Proposition 98 because of costs of living and the increase of expenses.”
Schwarzenegger’s revision also saves state parks, does not raise taxes, and establishes a rainy day fund from the assets of a proposed modernized state lottery. This will allow the state to raise cash up-front by selling future lottery revenues at no risk. Schwarzenegger’s budgets estimates this will add about $5 billion to state coffers in 2008-09 and $15 billion overall through 2011.
“As everyone knows, we are facing an extremely difficult budget year. With the subprime mortgage crisis, fewer capital gains and the stalled national economy, our revenues have flattened out. Due to our dysfunctional budget system, state spending goes up no matter what. On top of that, we don’t have a rainy-day fund to soften the blow in suffering years like this one,” said Gov. Schwarzenegger
Schwarzenegger’s plan of action comes complete with critics, one of them being California’s chief budget analyst, Elizabeth G. Hill, who says that the governor’s proposal for closing the deficit is so flawed that her office took the rare step of drafting an alternative state spending plan for the legislators to consider. The plan offered by Hill, calls for lawmakers to raise taxes by at least $2.7 billion, and urges them to reject Schwarzenegger’s plans for a 10 percent across-the-board reduction in state spending.
Hill’s proposal suggests that the governor’s approach is short sighted. She says lawmakers should target a slew of tax breaks which she claims are ripe for modification or elimination, including tax credits that individuals can claim for dependent children and seniors, and those that companies can claim for research and development as well as for hiring low-income workers. Democrats embraced Hill’s ideas, but the Governor and Republican lawmakers said they would continue to block any tax increases.
Assembly Speaker Bass recently outlined a Democratic budget proposal to close the deficit, similar to that of Schwarzenegger’s proposed expanded lottery. Like the governor’s, Bass’ approach would use future profits from a healthier lottery to obtain essentially an up-front loan generating $15 billion over a three year span.
In addition, Bass wants to bring an additional $6 billion in tax revenue by closing various loop holes and imposing new taxes. “We have 60 different examples of taxes we could propose,” said Bass in her telepress conference. The money will be used for a small year-to-year funding boost for education and to help avoid deep cuts in health and social service programs that aid the destitute, foster care, welfare grants, and wage support for residential caretakers of the elderly.
Bass declined to disclose what the specific taxes might be, but Democrats have proposed increasing the sales tax on items such as adult films, malt liquor, iTunes downloads, and plastic bags at supermarkets.
The Speaker said they are also looking at imposing a tax on oil companies. “We have through the years let oil companies off the hook. California is the only oil producing state that doesn’t charge oil companies a fee to extract oil from the land or ocean. Eleven other states require a two to 14 percent fee. We are proposing a six percent fee to oil companies. This would bring in $1.2 billion to be used for education which is our top priority.”
According to the Census Bureau, the poverty rate has escalated from 13.2 percent in 2008 to 14.3 percent in 2009. Last year, 43.6 million Americans lived in poverty; that figure increased nearly 4 million, compared to 2008.
“This is the largest number of officially impoverished Americans in the 51 years the government has kept track of poverty levels, and the highest percentage since 1994,” wrote Joseph Shaman, a senior correspondent for AOL news.
A committee created by Governor Arnold Schwarzenegger two years ago to evaluate and make recommendations about the kindergarten to grade 12 education in the state is on the road talking to teachers, administrators, parents, and students about its recommendations outlined in the “Report Student’s First, Renewing Hope for California’s Future.”
Los Angeles was the first in the series of comunity dialogues, and just shy of 50 people turned out on an election evening at Los Angeles Trade Technical College to listen, pose questions, and offer input.
Los Angeles, CA -- The Los Angeles County Coalition for Death Penalty Alternatives presents “Costs & Consequences: Can We Afford the Death Penalty?” on Sunday, May 31 from 3-5 p.m. at Fame Renaissance Center of First AME Church (FAME).
The forum is co-hosted by Professor Charles Ogletree, director of the Charles Hamilton Houston Institute for Race and Justice at Harvard Law School and Congresswoman Maxine Waters, representative for California’s 35th congressional district.
LAUSD Superintendent Ramon Cortines minced no words at the education forum sponsored by the Los Angeles Urban Policy Roundtable on Saturday, March 28. He said that the cuts the LAUSD will make to patch up a $718-million budget deficit will be big, painful and draconian.
Parents, teachers and students will be the big losers. But the biggest losers of all will be the District’s African American students.
They make up about 11% of the students in the sprawling district. They are the most underserved and underperforming of all students.
A ruling by the California Court of Appeal that parents who teach their children at home must have credentials has prompted Governor Arnold Schwarzenegger to promise to push through legislation to “protect the rights of parents,” if higher courts don’t reverse the edict.