Instability looms with budget though
by Brian Leubitz
I was going to make this post about the Governor’s approval numbers, but he just made it a little bit more interesting by releasing an “Open Letter to the People of California.” Quite auspicious sounding, but what it really is his revenue plan. Here’s the meat of that plan:
My proposal is straightforward and fair. It proposes a temporary tax increase on the wealthy, a modest and temporary increase in the sales tax, and guarantees that the new revenues be spent only on education. Here are the details:
Millionaires and high-income earners will pay up to 2% higher income taxes for five years. No family making less than $500,000 a year will see their income taxes rise. In fact, fewer than 2% of California taxpayers will be affected by this increase. There will be a temporary ½ cent increase in the sales tax. Even with this temporary increase, sales taxes will still be lower than what they were less than six months ago. This initiative dedicates funding only to education and public safety–not on other programs that we simply cannot afford. This initiative will not solve all of our fiscal problems. But it will stop further cuts to education and public safety.
This is basically what we have heard in the past, a hike on the highest earners along with a sales tax, and all of it dedicated to education and public safety. Red meat for both parties, a little tough on crime with a little teaching. Or, in other words, this package seems built from the ground up to win on the ballot. Polling numbers show broad opposition to additional education cuts, and without revenues, those are simply inevitable. While this package probably isn’t exactly what we would draw up in a perfect world, the California system of government is anything but perfect. His language in this open letter is political-speak not intended for progressives. It is full of statements about how we can’t afford programs (see the quote above) and how awesome it is that are spending levels are at percentages not seen since the seventies.
We could pick at the email, his talking points, and the specifics of the proposal. But Brown and his partners are building something that they think can win at the ballot, represent good policy in the long term, and help us out of the current budget crisis in the short term. It’s not exactly an easy shot to wrap up those three objectives with a nice shiny ribbon.
And perhaps he has the juice to push the measure across the finish line. Today’s Field Poll shows the Governor’s approval ratings pretty much right at where he has been for most of his term, in the upper 40s. The current figure of 47% is down from 49% in September, but still within the margin of error of that survey. However, his disapprove numbers have continued to creep up as “undecideds” jump off the fence and create a 36% disapprove figure.
There are a number of reasons why Californians would begin to grow wary of the Governor, but the budget, as ever, looms large.
“The public is, I think, bracing itself for additional spending cuts, and that’s never a good situation, either for the governor or a state Legislature,” poll director Mark DiCamillo said.
With state revenue falling below projections, the Brown administration is expected this month to announce highly unpopular, automatic spending cuts in service areas including schools. Nearly two-thirds of Californians consider the trigger cuts, part of last summer’s budget package, a bad idea, including majorities of Democrats, Republicans and independents, the poll says.(SacBee)
The trigger cuts were a device of sorts to get a budget done, and from discussions in Sacramento, not a whole lot of people liked them there either. But they enabled the Legislature to get enough votes from the two Democratic caucuses to pass the odious budget. However, as the majority budget rules don’t include revenue, we are still faced with the same difficult situation as we had at the beginning of the year: convince a Republican to think beyond the four walls of his own career, or continued austerity. Both Democrat and Republican voters are far from excited on the triggers, but with revenues continuing to fall below projections, they are likely to be triggered early next year.
Brown’s revenue proposal will help fill in many of those cuts, but won’t kick in until the end of next year. It is far from ideal, but with a recalcitrant Republican caucus it is what we have. The measure is being submitted to the AG’s office today and will be circulating with plenty of time to get it on the November ballot.
Read the full “Open Letter to the People of California” over the flip.
Dear Friends,
When I became Governor again — 28 years after my last term ended in 1983 — California was facing a $26.6 billion budget deficit. It was the result of years of failing to match spending with tax revenues as budget gimmicks instead of honest budgeting became the norm.
In January, I proposed a budget that combined deep cuts with a temporary extension of some existing taxes. It was a balanced approach that would have finally closed our budget gap.
I asked the legislature to enact this plan and to allow you, the people of California, to vote on it. I believed that you had the right to weigh in on this important choice: should we decently fund our schools or lower our taxes? I don’t know how you would have voted, but we will never know. The Republicans refused to provide the four votes needed to put this measure on the ballot.
Forced to act alone, Democrats went ahead and enacted massive cuts and the first honest on-time budget in a decade. But without the tax extensions, it was simply not possible to eliminate the state’s structural deficit.
The good news is that our financial condition is much better than a year ago. We cut the ongoing budget deficit by more than half, reduced the state’s workforce by about 5500 positions and cut unnecessary expenses like cell phones and state cars. We actually cut state expenses by over $10 billion. Spending is now at levels not seen since the seventies. Our state’s credit rating has moved from “negative” to “stable,” laying the foundation for job creation and a stronger economic recovery.
Unfortunately, the deep cuts we made came at a huge cost. Schools have been hurt and state funding for our universities has been reduced by 25%. Support for the elderly and the disabled has fallen to where it was in 1983. Our courts suffered debilitating reductions.
The stark truth is that without new tax revenues, we will have no other choice but to make deeper and more damaging cuts to schools, universities, public safety and our courts.
That is why I am filing today an initiative with the Attorney General’s office that would generate nearly $7 billion in dedicated funding to protect education and public safety. I am going directly to the voters because I don’t want to get bogged down in partisan gridlock as happened this year. The stakes are too high.
My proposal is straightforward and fair. It proposes a temporary tax increase on the wealthy, a modest and temporary increase in the sales tax, and guarantees that the new revenues be spent only on education. Here are the details:
Millionaires and high-income earners will pay up to 2% higher income taxes for five years. No family making less than $500,000 a year will see their income taxes rise. In fact, fewer than 2% of California taxpayers will be affected by this increase.
There will be a temporary ½ cent increase in the sales tax. Even with this temporary increase, sales taxes will still be lower than what they were less than six months ago.
This initiative dedicates funding only to education and public safety–not on other programs that we simply cannot afford.
This initiative will not solve all of our fiscal problems. But it will stop further cuts to education and public safety.
I ask you to join with me to get our state back on track.
Jerry Brown