Tomorrow morning around 7:40 AM I am going to be on Roy Ulrich’s Morning Review Friday on KPFK 90.7 FM to discuss the state’s structural revenue shortfall. One major element of that is the $2.7 billion in tax loopholes that LAO Elizabeth Hill identified. George Skelton reports in today’s LA Times that Arnold appears serious about closing these – but that much remains to be done:

Give him credit: Gov. Arnold Schwarzenegger is the first Republican in California’s Capitol to begin taking off the budget blinders.

He’s actually advocating tax increases, give or take some semantics….

It was clear to Schwarzenegger that, for political and practical reasons, the deficit hole could not be filled with spending cuts alone. He decided to support loophole closings. But advisors were surprised when the governor spontaneously popped out with the idea the next morning during an audience Q&A after addressing Town Hall Los Angeles.

“I’m a big believer,” he said, “that when we have a financial crisis like this that we all should chip in. And this is why I totally agree with the legislative analyst’s office when she says that we should look at tax loopholes….

Democratic leaders should consider it an invitation to offer Schwarzenegger a tax proposal. The governor finally agrees with them, it seems, that the state does have a revenue problem — not simply a spending problem.

This is a productive development, as it is becoming obvious that catastrophic education cuts are not the answer to our budget crisis. But even this welcome news has to be tempered by some political and fiscal realities.

First, there seems to be some disagreement among Sacramento Democrats on what to do about the budget. Skelton believes that the Arnold-Núñez vs. Perata dynamic is about to replay itself:

Senate President Pro Tem Don Perata (D-Oakland) wants to fashion a budget proposal through the traditional legislative process, with public hearings, and avoid closed-door negotiations between leaders and the governor. That’s fine. But this is ominous: He’s vowing “the fight of a lifetime,” threatening to block budget passage all summer if necessary to protect school funding, insisting loophole-closing isn’t enough and talking up a sales tax increase.

Assembly Speaker Fabian Nuñez (D-Los Angeles) is more attuned to Schwarzenegger.

“If other Democrats want to beat up the governor, I respect their views,” he says. “But I think the governor is a good man and doesn’t want to make cuts any more than I do. Now it’s up to us to show him a road map to a balanced budget.”

Nuñez isn’t ready to support a general tax increase, like on sales. That should be a “last resort,” he says. For now, he advocates closing business loopholes. For example, he’d impose an oil severance tax — California is the only state without one, he says — and raise $1 billion.

Núñez is simply wrong to believe that a general tax increase can be avoided. An oil severance tax has its place, but even with loophole closures, something like a sales tax increase – or sales tax modernization – or the restoration of the VLF is a necessity if we are to avoid crippling cuts. Tax loophole closure and an oil severance tax would bring in around $3.7 billion, but that leaves over $4 billion in cuts. The VLF sits as a fat target, with the potential to bring $6 billion a year into the state’s account. It would be nice if someone in Sacramento started talking more loudly about that.

Of course, it’s by no means clear what role Núñez, who has grown closer politically to Arnold over his term as speaker, will actually play in these negotiations. Whereas the Senate handover of power from Perata to Darrell Steinberg is scheduled for August 21, the transition from Núñez to Karen Bass is much less clearly defined. And we don’t yet seem to know where Speaker-elect Bass stands on the tax issue.

We do know where the Yacht Party stands. Capitol Alert reports today that Dick Ackerman and Mike Villines have both come out strongly against any new taxes. They’ve decided to stake their party’s future on the construction of an aristocracy in California, where low taxes are paid for by permanent inequality as our education, transportation, and health care services are destroyed and with it, the state’s economy.

A united front is going to be necessary to break the Republicans. Democrats need to work out their differences soon and present that unity, for the sake of Californians and the state’s future.

Today’s LA Times picks up where I left off on Sunday, showing how the proposed budget cuts are sending school districts scrambling to get layoff notices out by the March 15 deadline. Although these notices may not always lead to an actual firing, they do have a destructive effect on teacher morale. Already several of my family and friends who teach K-12 in Orange County have begun dusting off their resumes in anticipation of losing their jobs.

In my post  on Sunday I argued that the cuts, if allowed to happen, would have a reckless and destructive impact on California’s economy. The LA Times article points out that there is another potential catastrophe that these cuts might cause. If teachers are fired and class sizes increase, it is going to be more difficult than ever to meet the unreasonable mandates of the odious No Child Left Behind law.

Rialto Unified has made some recent academic gains, and its superintendent worries that deep cuts could stall progress. The district scored a 661 on California’s latest Academic Performance Index, below the state’s target of 800; the API measures schools and districts on student scores in math, English and other subjects.

While the state API is a different metric than NCLB, if a district is having trouble meeting the API target, it is likely to have trouble meeting the much more onerous NCLB targets. As most educators – and anyone who has been a student – knows, the larger the classes, the more difficult it becomes to learn and achieve.

Among the penalties for missing NCLB targets include “replacing staff” or a takeover by “a private education firm.” Either outcome involves less schools, less local control, less parental involvement, and an even deeper economic hit to thousands of working Californians.

Arnold’s proposed budget cuts could therefore touch off a cascade of events that delivers a crippling blow to our public education system. The always excellent California Budget Project has put together a detailed list of the impact of those cuts, including a district-by-district list of cuts. Most district will lose at minimum $500 per student, with some rural districts going well above $1,000 per student. Those are staggering numbers.

This was supposed to be the year of education. Perhaps it still can be – it can either be the year we saved education, or the year we destroyed it. Sometimes our choices really are that stark.

If every Californian paid an extra $150 a year in vehicle license fees, $6.1 billion would be raised eliminating the proposed budget cuts to health care, parks, and education. If we closed the tax loopholes that LAO Elizabeth Hill identified – as Arnold kinda sorta agreed we should – we would raise $2.5 billion, over half of the $4.4 billion cuts proposed in Arnold’s budget.

Or we could fire thousands of teachers. From today’s Orange County Register:

More than 1,590 teachers could lose their jobs.

Class sizes in hundreds of classrooms might increase from 20 to 30 students.

And one district may shutter a campus altogether.

The county’s 28 school districts are deep in efforts to develop plans to cut about $204 million, or 5 percent, from their operating budgets in the face of a mounting state budget crisis.

They’re preparing for the worst because school districts, which receive about 70 percent of their funding from the state, often have to approve staffing and much of their spending for the next school year long before Sacramento lawmakers finish wrangling over the state budget.

“These could be the most devastating cuts our schools have ever seen,” county Superintendent William Habermehl said. “I don’t know how some of our school districts will be able to survive this and provide the same quality of education.”

This being the OC Register we should not be surprised that the piece claims “locked-in teacher pay raises, restricted state and federal funds and other fixed expenditures” are a big part of the problem, but let’s look at the bigger picture here.

Restoring the VLF would cost an average of $150 per person per year. But the proposed teacher firings would cost nearly 40,000 Californians around $50,000 a year in income, health care, and other important benefits. That’s money that isn’t going to pay mortgages or rents. Money that isn’t keeping a small business afloat, or a big box store’s sales high enough to prevent mass layoffs. As California slides into recession, and with zero job growth to show for 2007, how on earth does it make any sense to deliver such a crippling blow to the state’s economy through firing all these teachers?

Surely it is more sensible to ask Californians to pay an extra $150 a year for the privilege of driving, and to keep the state’s economy afloat and its schools in session, than to privilege a wasteful and reckless tax cut at the expense of the economy.

Of course, there is also the long-term damage to the state through these crippling education cuts. Larger class sizes and fewer classrooms mean fewer students will learn. Fewer students will attend college, fewer will get good jobs or create new businesses and technologies. The state will be set back even further – California will become Mississippi.

All so that people can save $150 a year on their car registration. All so that a handful of wealthy yacht owners can get a tax break. We are constantly told that tax cuts are necessary to keep the state in business – but as the looming collapse of public education should suggest, this is just not so. California’s economy is still living off of the investments made in education in the 1960s and 1970s – but that is beginning to run out.

Even in Republican Orange County, in cities like San Juan Capistrano and Mission Viejo, voters want to ensure that their kids will get a decent education. Parents know full well that firing teachers means their children will not learn. Republicans are talking a hard line, claiming they’re not going to compromise an inch on the budget.

But I think we should ask the parents in south Orange County whether they agree with their Republican representatives that their child’s future is really worth $150 a year.

One of the most popular stories at SFGate today is about the Quaker who was fired from her job at CSU Hayward East Bay for changing the text of the required loyalty oath that all California public employees must sign as a condition of employment:

“I don’t think it was fair at all,” said Kearney-Brown. “All they care about is my name on an unaltered loyalty oath. They don’t care if I meant it, and it didn’t seem connected to the spirit of the oath. Nothing else mattered. My teaching didn’t matter. Nothing.”

A veteran public school math teacher who specializes in helping struggling students, Kearney-Brown, 50, had signed the oath before – but had modified it each time….

Each time, when asked to “swear (or affirm)” that she would “support and defend” the U.S. and state Constitutions “against all enemies, foreign and domestic,” Kearney-Brown inserted revisions: She wrote “nonviolently” in front of the word “support,” crossed out “swear,” and circled “affirm.” All were to conform with her Quaker beliefs, she said.

The school districts always accepted her modifications, Kearney-Brown said.

But Cal State East Bay wouldn’t, and she was fired on Thursday.

Unless we believe that Quakers are somehow America’s biggest threat, this should be seen as a totally ridiculous and anachronistic injustice. The loyalty oath – sometimes called the “Levering Oath” after the Republican legislator who rammed it through the state legislature in 1949-50 – was a particularly pernicious and pointless instance of McCarthyite hysteria. Republican Governor Earl Warren had initially opposed the oath, but when UC President Robert Sproul imposed the oath and fired 31 tenured professors who refused to sign it on grounds of academic freedom, Warren decided to support the oath to secure his 1950 reelection bid.

In short, the oath was created to further the political ambitions of Levering, Warren and Sproul. It did nothing to help California or the nation fight the Cold War, created deep and lasting divisions at UC, and is today seen as a rather silly piece of paper that folks sign as part of the usual fat packet of paper public workers have to sign upon accepting employment.

It’s been 59 years since the oath was created and 19 years since the Berlin Wall fell. Must we lose more qualified, dedicated, longtime teachers to this relic of the past? I know California legislators have better things to do, but if any of you politicians who are reading this site – and I know you’re out there – want to write a law to repeal this waste of paper, it would be welcome.

Much attention has been focused on the lovely town (I’m serious!) of Vallejo as it faces bankruptcy. In a harbinger of things to come for many California cities and counties, Vallejo’s general fund has been hit hard by the housing crash, leaving the city strapped for cash.

A city contemplating bankruptcy has many options. So it’s sad to see Vallejo – and smaller towns like Pacific Grove – blaming workers for their problems. In doing so, they repeat the same destructive policy espoused by Orange County Republicans – choosing to blame public employees and their unions for problems instead of supporting higher taxes, even at the cost of catastrophic disaster.

The first article on the Vallejo cash crunch in the Chronicle set up the dynamic, as city officials blamed workers for the problem:

[Councilwoman Stephanie] Gomes and others have blamed much of the city’s financial woes on police and fire contracts, which she says comprise 80 percent of the city’s $80 million budget.

The starting salary for a Vallejo firefighter is about $70,000 a year, among the highest in the state. Ten firefighters earned more than $200,000 each last year, including overtime, city officials said.

“Of course we value our police and firefighters and the risks they take, but their salaries are simply too high,” Gomes said. “They can afford to live in Marin and Napa, and it’s the very hard-working, blue-collar residents of Vallejo who are bearing the repercussions. It’s unfair.”

Ah, those greedy firefighters. How dare they ask for a middle-class income? What gives them the idea that they can extort such wages?

Firefighters say their earnings are high because the department is so short-staffed they’re forced to work huge amounts of overtime.

Since 2001, 30 firefighters have retired or left the department, and only three have been hired, said Vallejo fire Capt. Jon Riley, vice president of Fire Fighters Union Local 1186. And after rumors of bankruptcy began circulating, 14 more retired, fearing that their benefits and salaries would be cut, he said.

“We’re having to work an extraordinary amount of overtime,” he said. “We make great salaries, but if you’re not able to see your family, what good is it?”

Firefighters typically work 48-hour shifts with four days off between shifts. Many Vallejo firefighters are now forced to work 96-hour shifts with two days off, he said. Sleep deprivation, divorce and child-care complications are common, he said.

“I’d say morale has hit rock bottom,” he said. “But we’re still committed to providing the highest level of service to the citizens of Vallejo.”

Oh. They mean to tell us that firefighting is hard, grueling work, and that they should get fairly compensated for protecting the community?

To most of us, the firefighters’ stand is common sense. Fire protection is something you just don’t skimp on – unless you’re Orange County conservatives (more on them in a moment). And it’s not as if the firefighters are unwilling to help:

Firefighter union President Kurt Hanke told the council that the union reached an agreement late last week with city negotiators for wage cuts that would have reduced Vallejo’s deficit to zero. But he said Tanner on Monday vetoed the deal….Leaders of public safety unions say the salaries of police officers and firefighters are high because they must work large amounts of overtime because of staff shortages. The unions have offered to cut the employees’ pay if more officers and firefighters are hired.

Instead Vallejo’s leaders prefer to play hardball and blame public safety employees for the city’s crisis. And unsurprisingly, nobody in Vallejo seems to be discussing a tax increase to stave off these crippling cuts – which will not only compromise public safety, but further damage the city’s economy. Firing workers and cutting everyone else’s pay is not exactly going to help Vallejo’s restaurants and small businesses weather the storm.

Lest we think this is just a Vallejo problem, the blaming of public workers for city problems is something found statewide – a last-ditch, extremist strategy to avoid a tax increase. Here on the Monterey Peninsula, the small town of Pacific Grove has been facing a $2 million budget deficit, and recently responded by enacting drastic cuts to city services, including fire and police. Last fall the city proposed a modest tax hike to close the shortfall – which prompted users of a local discussion forum to denounce the workers in some rather absurd terms:

Why does our small town have so many firemen? I always see them parked somewhere or doing drills by the high school but not much else. Is there a reasonable explanation that I am not aware of?

How many fires does this tiny town have every year? How many tall buildings?

This town is so overstaffed by Bay Area standards (or other responsible standards) that it is truly disgusting. At least some layoffs are in the works, but the point is, PG should ALWAYS be run lean. There is not enought here to justify so many salaries.

It would not hurt to recruit people who actually have a real track record of successful leadership and money management. If you keep hiring inbred failures, you are going to continue to see a lot of red on the balance sheets.

That’s what I mean about our many firemen. I think they need to cut some of them loose. It’s silly when you go to the PG website and look at all the names for the fire dept. They are about as busy as the Maytag repairman!

In fact, a study of fire protection on the Peninsula showed that the city’s fire department is actually understaffed, but that wasn’t enough to convince folks to approve the tax – instead it was easier to blame supposedly lazy, greedy workers for the city’s crisis.

Where might all this lead? The cautionary tale is that of Orange County, where conservatives and Republicans high-fived each other in 2005 when they defeated a measure to shift already collected tax monies to help produce more fire coverage. As I explained it back in October:

Orange County Republicans campaigned hard against Measure D, a 2005 ballot proposal that would have diverted $80 million in surplus public safety funds from Proposition 172 to help properly staff Orange County fire departments. The failure of Measure D leads directly to the OCFA’s inability to quickly contain the Santiago Fire when it broke out Sunday evening….

To Steven Greenhut and the Register editorial board, the firefighters’ union is merely a greedy parasite on the public, using bureaucratic rules to claim they need more fire crews in a cynical ploy to line their own pockets.

Such is the natural outcome of an obsession with low taxes. In order to defend the untenable position that taxes must never go up no matter the need or the situation, anti-taxers have to lash out at anyone or anything that might undermine their position. If that includes public safety workers, so be it. If that means cutting back police and fire protection, so be it. To the anti-tax zealots, every man is an island unto himself.

Orange County’s experience last fall suggested otherwise. Let’s hope that Vallejo, Pacific Grove, and the rest of California learns the lesson and, like Salinas, looks to new revenue sources to provide for essential services.

It may be hard to remember, but last fall the state had not one but two special sessions. The first, on health care, ended with the rejection of the flawed mandate proposal ABX1 1. The second, on water, appeared to have also ended in acrimony, as Republicans insisted on $3 billion for new dams that Democrats were unwilling to support.

But even though the issue slipped below most of our radar screens, supporters of dams and canals have been hard at work promoting these obsolete 20th century technologies as some sort of “solution” to a 21st century crisis. The Planning and Conservation League reports on the California Chamber of Commerce’s efforts to enlist Arnold and DiFi to promote an $11 billion water bond – with $3 billion for dams:

PCL has recently gotten an Insider scoop that the California Chamber of Commerce is pressuring both U.S. Senator Dianne Feinstein and Governor Arnold Schwarzenegger to endorse its environmentally-devastating $11.69 billion water bond initiative.

The bond, which the Chamber hopes to place on the November 2008 ballot, is strongly opposed by environmental groups throughout California for its potential effects on the state’s natural resources. The bond would:

   –Include $3.5 billion explicitly for dam construction, plus billions more that could be used for dams on California rivers.

   –Establish a dangerous new “water commission” empowered to fund and build a peripheral canal and divert massive amounts of water from the Sacramento River around the imperiled California Bay-Delta Estuary for large-scale corporate agriculture in the San Joaquin Valley and sprawl development in Southern California. (Over-pumping of water from the Delta during the past eight years has already contributed to the collapse of the Delta ecosystem, including plummeting salmon and other fish populations.)

   –Eliminate public and legislative oversight and leave the fate of the Delta and Northern California rivers in the hands of politically appointed bureaucrats likely to have strong ties to special interests in the San Joaquin Valley and Southern California.

The Chamber’s push is seen by many as an end-run around the Governor’s own Delta Vision process, which has brought together stakeholders from the environmental, business, water, agricultural, and Delta communities.

That plan, which would eliminate badly needed oversight protections and saddle the state with $760 million a year in bond service costs, is bad enough. But over the weekend the PCL reported at the California Progress Report that bond supporters are now trying to do an end run around  voters, as the state Department of Water Resources is now arguing that it is not bound by the 1982 rejection of the Peripheral Canal by voters:

According to a recent budget change proposal submitted to the state Legislature, DWR intends to start preparing to build a new “Alternative Delta Conveyance” facility, which would divert water directly from the Sacramento River before it enters the Delta, sending it directly to the San Joaquin Valley and Southern California….

Under its proposal, DWR would revive studies and update construction plans that it abandoned in 1982 after voters overwhelmingly rejected its “Peripheral Canal” proposal in a statewide referendum due to fears that such a facility would result in more Northern California water exported to the ever-growing south state, and that the Delta would be left as a saltwater lake rather than a true estuary.

The budget request from DWR follows a recent letter sent to Assemblywoman Wolk (D-Davis) by DWR Director Lester Snow, stating that according to DWR’s analysis, DWR has the authority to build a peripheral canal without legislative or voter approval.

More analysis below…

As the PCL explained, the Peripheral Canal would be a catastrophe for the Delta. The main environmental threat to the Delta is increased salinity due to export of fresh water for farmers and residential users further south. The Peripheral Canal is designed to bypass the delta altogether – finishing off the Delta as a freshwater system. The result would be ruinous for water quality, fishing, and stressed levee systems. It would be sacrificing the Delta once and for all in order to continue allowing California users to overuse what they already have.

It’s worth reminding ourselves why dams and canals are such a bad idea. First, they simply are not necessary. The Planning and Conservation League has weighed in with its own plan that emphasizes conservation programs, watershed restoration, and groundwater retention (in other words, pumping the water back into aquifers to be stored underground, a more environmentally friendly and sustainable solution than dams). If properly funded, they note, several million acre feet of water could be produced through these more sustainable methods. One acre foot typically equals the annual water usage by a family of four. The state’s own water assessment plan shows that conservation can eliminate the “need” for these new dams.

Second, and perhaps more importantly, we face a changing climate that is likely to leave us with less water to go around – making these dams even more unnecessary, a waste of precious money that should go instead toward global warming appropriate solutions. California is a very drought-prone climate. Climate change in California is expected to produce a hotter and drier climate, with a reduced snowpack. Precipitation in the Sierra is expected to fall as rain more often than snow, forcing significant shifts in how water is stored.

But the problem isn’t just that the Sierra will see less snow and more rain, but that it will see less water, period. And the problem isn’t limited to the Sierra – as anyone who’s been to the Southwest recently knows, the whole region is suffering from reduced rainfall. Some experts suggest we may be on the verge of a 90 year drought in the US Southwest, and that Lakes Powell and Mead may never return to their previous levels.

Faced with the prospect of prolonged drought, it seems foolish for California to assume it can solve its problem merely through added storage – why build more storage for less rain?

Senator Feinstein should not agree to this reckless and unnecessary plan, and should instead use her considerable influence to help put a better, less expensive, more sustainable and environmentally sensible water bond on the ballot this November. Water is our most precious commodity, and it should not be left in the hands of far-right zealots who cannot bring themselves to admit the need to abandon the failed ways of the past and instead construct sensible solutions for a new climate.

If you tuned into my appearance on Wednesday’s “Which Way LA?” show, you heard me discuss a “structural revenue shortfall” – that since 1978 California has simply not generated enough money to pay for its basic services, from public education to transportation to water. I thought I would expand on that concept this morning, and explain in more detail exactly what I mean by it.

Arnold and the Republicans would have us believe that our budget deficit is caused by overspending in the “good times” that leaves us with huge shortfalls when the economy turns sour. But there isn’t $16 billion in “overspending” and Arnold knows it, as proved by his $4 billion cut for California public schools. Others claim that the problem is locked in and/or frivolous spending – but here again, that only accounts for a tiny fraction of the massive deficit total.

No, the real problem is that since 1978 this state has cut nearly $12 billion in taxes. This was done during economically prosperous periods, particularly the 1990s. And that lack of revenue has piled up over the years – the state has fallen further and further behind to the point now that our state’s governor is seriously proposing ending public education as we know it.

Details over the flip…

Most of the information in this examination comes from the California Budget Project – of whom I have become a huge fan – and specifically their report Two Steps Back: Should California Cut Its Way to a Balanced Budget, released earlier this month. The report is a devastating indictment of this state’s addiction to tax cuts, an addiction that now threatens our ability to function as a modern society.

We have a structural revenue shortfall – in other words, since 1978 we have not raised the money we need to keep our schools, parks, hospitals, and roads open and in good working order. We have instead preferred to waste our money on tax giveaways for a few people while middle- and working-class Californians get stuck with higher costs for lesser services. As we face new crises, such as climate change, the need for public investment is that much greater – and the structural revenue shortfall makes it even more difficult for us to adequately respond to these needs.

Let’s look at the specifics. When we talk of a structural revenue shortfall, most people immediately think of Prop 13. As we explained back in January, Prop 13 was a radical solution to a temporary problem. Conservatives ensured that the state would not have enough money to pay for its basic services by slashing property taxes and then severely limiting the ability to raise them (or any other tax).

But the structural revenue shortfall is not a product of just Prop 13. Since 1993 there have been various tax breaks, for corporations primarily, that cost us $12 billion this budget year alone. These rates were reduced during the “good times” of the 1990s economic boom, but they’re costing us dearly today. If corporations paid the same rate in 2005 that they did in 1981 we would be collecting $7.5 billion more each year in revenue. (These numbers are taken directly from the CBP report.)

Half of that $12 billion comes from the loss of the Vehicle License Fee revenue. As Mark Leno explained, this is the classic example of reckless tax cuts during the “good times” that come back to hurt us in the “bad times.” The CBP estimates that for this budget year (2007-08) we would have taken in $6.1 billion from the VLF had Arnold not killed it as his first act in office. That, as the CBP notes, is more than Arnold’s cuts to K-12 education, parks, and health care combined.

All so that California drivers can save a measly $150 a year. It is an unconscionable situation – the LAUSD is facing $460 million in cuts that would mean the closure of 22 high schools, the firing of 5700 employees, and an 8% pay cut for those that remain. Is this really worth a $150 savings for drivers?

The CBP report also shows that these tax cuts have gone disproportionately to the wealthiest among us. In fact, the poorest among us now bear the largest share of the tax burden. The lowest 20% income brackets pay 11.7% of their income in state and local taxes, whereas the top 4% pay only 7.1% of their income. The result is that  lower income Californians have a higher tax burden – but get less in return for those taxes.

Republicans, ignoring all of the above facts, instead argue that our problem is too much spending. It’s true that spending has risen, but why exactly has this increase happened? Natural population increase, as well as the rather significant inflation we’ve been facing this decade, is what makes the cost of government rise. The fastest growing segment of the population is, in fact, the elderly – not immigrants – which explains why the cost of social services is rising significantly.

So let’s sum up what we have here. In the flush years of the 1990s, California enacted tax cuts that now cost us some $12 billion a year. Spending is rising, but that’s what happens when you have both a growing and aging population, and that increase in spending is on core programs – health care and education – not on frivolities. Half of this tax cost – $6.1 billion – is due to the VLF alone. We are going to destroy public education just so drivers can save $150 a year.

Reversing these frivolous tax cuts would potentially eliminate the need to make crippling spending cuts. And the California Tax Reform Association has identified several more tax changes that could bring the revenue total to $17 billion.

Finally, let’s remember the big picture. Tax cuts do not create jobs – people create jobs. People who are educated, in good health, and who have a modern support system, from transportation to water infrastructure – they are the ones that create jobs. It’s no accident that California became a global leader in innovation and growth only after the 1960s, when we made the proper investments in public services. We’ve been living off of that investment for over 30 years now, and unsurprisingly, we’ve found we can no longer do it.

UPDATE by Brian: You can listen live to Which Way LA live here and then get the archives here or at iTunes. Robert’s going to be on iTunes! I’m excited to hear what Robert has to say.

I will be on Warren Olney’s show on KCRW 89.9 at 7pm tonight to discuss the latest news from the state budget front. The California Legislative Analyst, Elizabeth Hill, has announced that California now faces a $16 billion budget deficit. In her press conference, as reported by the Sacramento Bee, she sharply criticized Arnold Schwarzenegger’s approach to the budget:

In a critical look at Schwarzenegger’s spending proposal, Hill called his administration’s budget-balancing approach “flawed” because it fails to prioritize state programs.

“We recommend the Legislature reject the administration’s across-the-board (cutting) approach,” the report said.

The report lays out an alternative budget that proposes to eliminate nonessential state programs, shift programs to local control and reduce school funding by less than the $4.3 billion the governor suggested. It also recommends closing tax loopholes to add revenue in a “reasonable manner.”

As an impartial analyst, Hill cannot say what is obvious to us all – the bill for 30 years of frivolous tax cuts, such as giving wealthy yacht owners a tax break while threatening to close parks and fire teachers, has come due. Republicans insist on cutting core services of our government, preferring to make it difficult to get a decent education, kicking sick children off of health care coverage, and abandoning our natural heritage instead of making sure all Californians are paying their fair share.

As we enter what is likely to be a nasty recession, the last thing this state should be doing is destroying the kinds of public services essential to a modern society and a developed, robust economy. It is long past time for us to end the structural revenue deficit that has produced this recurring crisis, from the wasteful elimination of $5 billion in VLF revenue at the beginning of Arnold’s term to the various tax loopholes and favoritisms that have plagued us since 1978. California is at a crossroads – will we rise to the occasion, or stand by while Republicans destroy what remains of the California dream?