Category Archives: Budget

Budget, Jerry Brown

Brown’s New Budget Slashes Deeper, Tells Awful Truth

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Cuts would deal with triggered cuts and $13B 18 month deficit

by Brian Leubitz

What some are calling a “ransom note” others call the terrible truth.  Jerry Brown’s budget proposal sets a dark scenario for the state.  And yet, somehow we have gotten to the point that a dystopic future with three less school weeks is somehow optimistic.

Gov. Jerry Brown unveiled his new budget plan, calling for a painful $4.8-billion cut in public school funds if voters reject a proposed tax hike that he hopes to put on the ballot in November.

Despite the possible reduction – the equivalent of slashing three weeks from the school year – the spending blueprint Brown released Thursday is a relatively optimistic document. It assumes he will have to close a $9.2-billion deficit, a vast improvement over last year’s $26-billion gap.

Half of the deficit would be wiped out through the temporary half-cent sales-tax hike and increased levies on the wealthy that Brown wants voters to approve – or by the schools cuts. The remainder would be eliminated with reductions in welfare, Medi-Cal and other programs. (LA Times)

The plan calls for cutting three thousand state workers at a time when jobs are already scarce.  It calls for additional Medi-Cal cuts, which frankly, I didn’t think possible and might end up in court. And at this point our welfare system is essentially dead.  So, optimism abounds.

Over [in Bloomberg, Dan Schnur http://www.bloomberg.com/news/… a Republican and former FPPC chair, has this to say about it:

“It’s the most expensive ransom note in California political history,” Dan Schnur, a former aide to Republican Governor Pete Wilson and now director of the Jesse M. Unruh Institute of Politics at the University of Southern California in Los Angeles, said yesterday in a telephone interview.

Which is really rather rather funny because how often legislative Republicans have played the ransom game.  Try doing a search on Calitics for ransom note, you get lots of results.  Like this one from March with their 57 requests. Or this one from 2009, where Sen. Hollingsworth wanted to do Intuit’s bidding and get rid of a tax simplification tool. The hits just keep on coming.

But here’s the thing, education is 40% of the budget, and we can’t pretend that we can keep making cuts forever without touching education. Call it whatever you want, but unless we get revenues, it ain’t going to be pretty.  Telling voters the truth isn’t a ransom note.

Budget, Jerry Brown

A New Year, Anything New?

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3 Areas to Watch

by Brian Leubitz

If you care to look, it seems that the Sacramento press corps (all three to five of the hardy souls) have just written either a wrap up of 2011 or a preview of 2012.  You basically get a few points with slightly different order depending on the writer(s), but here are a few points worth noting:

1) Jerry Brown is just Jerry Brown

That isn’t to say he’s any worse than any other governor that we could have ended up with, but that he’s not some super hero who can ride in to save the day.  Even with all of his experience, he can’t magically do Jedi Mind Tricks on the Republicans to somehow be reasonable. I think there was a lot of hope this time last year that Jerry Brown, with all of his experience a generation ago, would be the adult in the room for the bunch of children in the legislature.  But I suppose sometimes the delinquents win.

2) 2012 will be a make or break year for Brown and California generally. Or not.



This is sort of a funny one. Because, really, the same thing has been said about our situation for the last four years or so. Really, ever since the worst of the budget mess began, we have been playing with fire. So, in that sense, yes, every year is really important, but somehow we’ve been able to find some way to make the cuts, cuts, cuts and more cuts into our budget to avoid any real decision-making. Yes, those cuts are a real decision, but more in the passive sense.  We have left the decisions for a few whims of whomever gets the last word at the dais of the respective budget committees, or whomever manages to catch the leaders at an opportune moment.  

They say that budgets are a statement of our priorities. But I hope, for all of our sakes, that isn’t true of the past five years.  Is it really our priority to make the school year shorter? Or to abandon our sick and elderly? Or to cut fire protection services? It is hardly any robust statement of priority when there is a gun at your head.  Our system is so skewed towards one particular priority, taxes, that we have lost all sense of everything else.

Perhaps this is the year that changes that, but from the statements of Sen. Steinberg and Spkr Perez, I wouldn’t expect much from the Legislature. They seem content to wait back for the Novemeber election and to satisfy the budget deficit ($13B-ish) with cuts alone until then.  

“My view is you always have an open door and outstretched hand, but I don’t think we do anything as our main strategy that requires a two-thirds vote,” Steinberg said. “We’re gone down that path far too many times.”(SacBee)

So, perhaps we’ll see a fairly standard legislative year. Maybe something happens with pensions, but more likely, we are in a holding pattern until something is determined at the ballot box with a revenue measure of some sort in November.

3) New Districts and Top 2 Will Bring Changes to Composition of Legislature



At the very least, we will see something new here.  There will, most certainly, be several Dem-on-Dem elections in November. Laura Richardson and Janice Hahn, Howard Berman and Brad Sherman seem destined for some expensive races.  There may be a few Rep-on-Rep, but the numbers and costs will likely be far fewer.  The thing is that there is usually enough Democratic support to get one Dem in a deep Red district top 2, but that isn’t always the case in some of the Bluest seats. Or to flip that, the Deepest Blue is darker than the deepest red.

Now, as to the districts, well, there is still the question of the Senate district referendum.  There is still no word as to whether it will qualify (but expect some sort of word within a few weeks as to whether they will need a full count verification). But, with the signatures out there, the sponsors of the referendum (GOP Senators for the most part) are trying to get some other map more to their liking. The Supreme Court will likely decide on that fairly soon as the SoS needs to prepare for the elections.

There is a very real chance that the Democrats get 2/3 in the Senate (and take away whatever power the Senate GOP caucus had), but it is extremely unlikely that the Assembly Dems are able to do the same. (Cali_girl_in_texas has the over/under at 50).  I’m skeptical that situation would really bring all that much change. Democrats would just be paying more attention to the Assembly. Just a few different, slightly more radical, people in the position of blocking action.

Well, it’s about time to get rolling into a new Legislative year, should be fun!

Budget, Jerry Brown

Revised Budget is Bad, Just Not as Bad as Originally Thought

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Brown’s revised budget decreases hit to K-12

by Brian Leubitz

Another round of cuts is hardly worth celebrating, but Brown seems to have at least saved the 175 day school year.

K-12 school districts were at risk of losing as much $1.5 billion – the equivalent of seven instructional days – under the budget Brown and lawmakers enacted earlier this year. But they will face a smaller $79.6 million reduction in general funding. That should avert massive reductions in the school calendar or other drastic measures for most districts.

“It turns out the cuts are far less than they would have been,” Brown said.

Districts will still face a $248 million elimination of school bus funding, however. Jill Wynns, president of the California School Boards Association, said districts will cut somewhere other than buses because they are mandated by federal law to provide transportation for students with disabilities.(SacBee)

Also getting big cuts? Higher education. UC, CSU, and the community college system all lose $100 million.  Community College Chancellor Jack Scott has indicated that will mean a $10/unit fee increase for community colleges, and UC and CSU will likely see another round of fee hikes.

You can check out a more exhaustive list of the cuts here.  

Budget, Jerry Brown

Pulling the Trigger on California’s Future?

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Director of Finance to hold meeting at noon regarding the “trigger cuts”

by Brian Leubitz

Today’s the day. If you remember back to the disaster that was last year’s budget there was a $4B mystery source of revenue that was basically a cross your fingers and hope real hard kind of thing.  The legislature then asked the Controller (John Chiang), the Legislative Analyst (Mac Taylor) and the Director of Finance (Ana Matosantos) to track how much revenue was coming in, and then if that $4B did not come in, “pull the trigger” on cuts of up to that amount that were already determined.

Well, today is that day, and Matosantos, Brown (and formerly Schwarzenegger’s) Director of Finance has to decide how much will be cut for the 2012 part of the current fiscal year.  Don’t expect much good news, as the Controller’s office already released data indicating that we weren’t going to hit that target.  Oh…and we spent more than we projected.

After accounting for November revenues, total year-to-date general fund revenues are now behind the budget’s estimates by $1 billion, but expenditures for the year are over projections by $1.95 billion.  It turns out that during a bad economic period, people need more services, but in the current climate in Sacramento, getting the legislature to approve the revenues for those services is an impossible feat even for somebody with the experience of Jerry Brown.

And so we go to the people, I suppose.  According to a new PPIC poll, Californians are not particularly interested in a cuts only budget.

A new poll shows 60 percent of California voters, weary of state spending cuts and unsettled by the prospect of more, are ready to support Gov. Jerry Brown’s plan to raise taxes. … When asked about those automatic spending reductions, part of the budget package signed last summer, a plurality of likely voters – 45 percent – say they would prefer a mix of spending cuts and tax increases to address the shortfall, according to the poll.

Brown, a Democrat, is seeking to raise the statewide sales tax a half-cent and increase income taxes on people who make $250,000 or more a year. He opened a campaign committee last week, and his political adviser, Steve Glazer, has started fundraising for the effort.(SacBee)

There is a long time between now and November 2012, and a lot of painful cuts remain no matter what happens at the ballot box.  But as we continue this slow motion take-down of the California Dream, we’ll need to consider what our values really are.  Perhaps we really are a state that is only concerned about our present day self-interest, but I have higher expectations for Californians. We can, and will, break out of this viscous cycle of cuts.

Budget, Jerry Brown

Gov. Brown Releases Open Letter with Revenue Plan, Maintains Approval Rating

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

    Budget

    Legislators Must Make Office Budgets Public

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    Court rules that Assembly Must Turn Over Records

    by Brian Leubitz

    Asm. Anthony Portantino has had his run-ins with Assembly leadership. Many of them, some of which resulted in getting tossed in one of the so-called “doghouses” and getting his office budget cut.  The spat got really nasty when the Rules Committee demanded a rather large cut from his office and accused him of overspending.  Portantino then took it upon himself to release his budget records and demanded that the rest of the Assembly do the same.

    That was a few months back, and since then the Senate has released most of their records but the Assembly is holding back. Perhaps it is part of the Portantino feud, or perhaps it is just to be consistent with years past.  Nonetheless, a Sacramento judge issued a tentative ruling yesterday ordering the Assembly to release the records.

    Earlier this year, Assembly administrators had claimed that the records were confidential under provisions in the Legislature Open Records Act that exempt “preliminary drafts, notes or legislative memoranda” and “correspondence of and to individual members of the Legislature and their staff.”

    On Thursday, Frawley said the Assembly “improperly withheld” the records and chided the lower-house for its “somewhat ironic” view of the open-records law, with legislative lawyers arguing for “a narrow interpretation that significantly restricts the public’s right to inspect legislative records.”

    “The records requested by the news organizations indisputably contain information relating to the conduct of the public’s business,” Frawley wrote. “The records all reflect how Assembly money is budgeted and spent, which is critical to an understanding of the Legislature’s operations.”

    The judge strongly rejected the Assembly’s argument that the records qualified as confidential “correspondence” under the open-records law.(LA Times)

    Tentative rulings are rarely changed, and the Assembly has apparently seen that it really isn’t worth the PR hit to continue this fight, at least for now.  Yesterday they announced that they won’t be protesting the ruling at the hearing with the Judge.  However, they can still appeal, but again that is hardly without risks.  The longer this goes on, the more (negative) attention it gets.  And with an approval rating hovering around 10%, that’s really the last thing the Legislature needs.

    While we might not get the records right away, expect to see them fairly soon. Heck, who knows, maybe some interesting information is hiding out in those budgets.

    Budget, Jerry Brown

    Coming Soon to a Ballot Near You: Brown’s Tax Plan

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    Governor aims to increase highest tax bracket and sales tax for a limited time

    by Brian Leubitz

    If nothing else, Gov. Brown is ambitious this go-round.  While his pension plan is slowly simmering in the Legislature, he knows that we really can’t continue to function with cuts-only budgets.  With the impending decision by Director of Finance Ana Matosantos on whether to pull the triggers in the last budget deal, we are looking at billions more of holes in the budget to fill. (And at this point, the only question that is out there is how much of the triggers will be pulled.)

    Brown has mentioned that he will be bringing something to the ballot in terms of revenue, but it seems that there is serious movement on it now.  He’s been meeting with labor and his supporters too work on a plan that they can agree to get on the November ballot.

    In the latest proposed fix for California’s fiscal crisis, Gov. Jerry Brown is expected to announce a multibillion-dollar tax initiative in the coming days, asking voters to raise levies on upper-income earners and increase the state’s sales tax by half a cent.

    The levies would expire at the end of 2016, said sources with direct knowledge of the plan. The governor’s office has been fine-tuning the tax measure for weeks with its labor allies. It hopes to file language with the attorney general’s office as early as Friday so it can start gathering the signatures needed to place the measure on the November 2012 ballot.(LA Times)

    The plan would buy four-five years of time in order to both reset the budget and hope that the economy recovers.  Over the past six months there have been a raft of proposals being discussed from various organizations, and the most sure way to losing on all of them is having more than one tax measure on the ballot.  If this does hit the streets fairly soon as anticipated, other potential measures will probably die quietly.

    Until we see the details on this measure, I’ll reserve full judgment.  I do not like the inclusion of sales taxes, one of the most regressive taxes, but they do seem to be the most likely to pass.  Other than taxing the 1% that is.  Expect further details by next week at the latest.

    Budget

    Billionaire Wants To Shift Tax Burden to Middle Class

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    If you look up “tone deaf” in the dictionary right now, you might find a photo of Nicholas Berggruen. He’s the billionaire investor who founded the “Think Long Committee for California” last fall to revive corporate friendly “reform” policies. In news that should shock nobody at all, their tax proposals involve shifting the burden away from the rich and corporations and onto what’s left of the middle class. From Capitol Alert:

    A coalition backed by some of the biggest names in California politics and a billionaire financier is readying for the ballot a sweeping overhaul of the Golden State’s tax system….

    Californians would pay sales tax on all services except health care and education starting in July 2013.

    The tax hike would boost state revenues by about 11 percent starting in 2013-14. The money would help retire debt in the first year and later go toward K-12 schools, higher education and local governments.

    The state would also simplify the personal income tax system in 2014, charging no tax on income up to $45,000 for joint filers; 2 percent on income between $45,000 and $95,000; and 7.5 percent on income above $95,000.

    The state would eliminate all personal income tax deductions except those on mortgage interest, property taxes, charitable donations and research and development. The sales tax rate on goods would drop by half a percentage point.

    On average, taxpayers at every income level would pay more due to the new service tax. Households with adjusted income below $20,000 would pay $71 more annually, though they may be eligible for a sales tax rebate.

    The plan lowers the corporate tax rate from 8.84 percent to 7 percent. It also raises taxes on out-of-state firms by requiring them to pay based on their share of sales in California.

    In short: corporate taxes go down, income taxes go down for everyone but especially for the rich, and the sales tax goes up (in fact if not in rate). The middle class – what’s left of it, at least – would shoulder the burden of taxation in California even more than they already do.

    The article itself is strangely written, as if Torey Van Oot and Kevin Yamamura agreed to obscure the true nature of the proposal by not describing how the personal tax rates change from the present day. Here’s the current personal income tax rates for joint filers:

    $96,058 and up: 9.3% (with a 1% surcharge for incomes over $1 million)

    $76,008 to $96,058: 8%

    $54,754 to $76,008: 6%

    $34,692 to $54,754: 4%

    $14,632 to $34,692: 2%

    $14,632 and under: 0%

    Under the Think Long plan, all the rates would go down, but the rich would see a big drop from 9.3% to 7.5%. And yet as the article notes, with the sales tax changes the overall impact would mean that everyone else pays more. Because the income tax would only kick in at $45,000 for joint filers, it’s the middle class that gets hit hardest.

    It should come as no surprise that a billionaire’s proposal for California is to give himself and his wealthy friends a huge tax cut and screw everybody else in the process. I am not at all opposed to asking the middle-class to pay more, everyone is going to have to pay a bit more to reverse California’s slide into the abyss. But that should be a progressive solution that includes asking the rich to pay a LOT more than they currently do, not asking them to pay less.

    It’s also rather stunning to see this proposal come out as Californians have begun taking to the streets to protest policies exactly like this that favor the 1% at the expense of the 99%. Berggruen and the members of the Think Long Committee that are giving him cover have either not paid any attention to the Occupy movement or do not think it has much influence.

    Still, it is difficult to see how this proposal stands a chance of passage. Voters aren’t stupid – they might like the income tax cuts, but will revolt at paying more sales tax, especially as they see the rich and corporations getting a big tax cut.

    The proposal takes California in the wrong direction. There’s no doubt the state is in crisis. College is becoming unaffordable. K-12 schools may have to cut a week off of the school year. Millions are without guaranteed health care. Unemployment is at 11.7%. To solve those crises, government needs to step in and rebuild the middle class by providing free college, by massively investing in K-12 schools, by providing free and universal health care to everyone, by directly hiring people who need work, and by building out a 21st century infrastructure that will save money by reducing dependence on oil.

    Making that happen requires going after the wealth currently controlled by the 1%. Income tax rates on them need to go up – way up. Higher tax rates on the rich and on corporations will actually spur economic growth by rebuilding the middle class, giving people the space and support they need to innovate, create jobs, and repair their balance sheets.

    If Berggruen wanted to actually do something to help California, he would take the $20 million he is pledging to spend on this shockingly regressive proposal and instead invest it in an initiative to raise taxes on the rich, on corporations, and to fix the state’s unfair property tax system. Instead he’s using it to help himself and his friends get even richer.

    This proposal is worse than a joke – it’s an insult. It should be denounced early and often.

    Budget, Jerry Brown

    The Dystopic Present: $13B Deficit

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    State faces another looming budget crisis

    by Brian Leubitz

    UPDATE: I’ve included video of Taylor’s press conference from John Myers’ twitter feed. Thanks John!  You can get the full press conference from the CalChannel here.



    I’ve been a little quiet around here, as I was more than a bit busy with the election and then trying to recover from said election.  And Sacramento was hardly hopping either, just a few press conferences here and there.  However, Leg Analyst Mac Taylor (and sometimes Right-leaning Budget Warrior) has been on the grim watch on our state finances along with Finance Director Ana Matasantos.  And grim is really the best adjective for the situation:

    The report by the Legislative Analyst’s Office says the state faces a budget deficit in the current fiscal year largely because it will collect only $300 million of $4 billion that Gov. Jerry Brown and the Legislature added to the budget just days before it was approved in June. Critics had called the sudden infusion of projected revenue “phantom money” that was conjured to avoid deeper spending cuts.

    The report says California also faces a budget deficit in the 2012-13 fiscal year of $13 billion.(SF Chronicle)

    I’m not sure how bright I can highlight this situation, but we are steamrolling towards another budget crisis.  And guess what, there is so little left to cut, there will be no other choice to cut deeper into some already devestated state services.  Of course, much of that could be avoided with a bit of reasonableness from the other side of the aisle, but let’s be realistic here. Unless somehow four Republican legislators get a Dickensian like visit from beyond, do we really think that is going to happen?

    Now, the ultimate determination will be made by Matasantos by December 15, but given that relatively few of those $4Billion have come in, it is tough to imagine that she will have much choice. The $4 Billion will hit education particularly hard, with the possibility of eliminating 7 school days from the year. As David Dayen points out, the threat of a $13B series of cuts threatens to make ridiculously small the few parts of President Obama’s jobs package that can pass Congress. $1 Billion in veterans benefits will do little to combat the biggest of the 50 Little Hoovers here in California.

    It is hard to really blame Gov. Brown for much here, other than his rosy expectations. The Right will take the usual attack on Democrats of being too close to labor, but even if he totally decimated pensions and laid off huge portions of the state public employees, we still wouldn’t get near dealing with the situation.  But the fact remains that the $4 Billion that has failed to show was put in the budget because the cuts without them would have been unbearable.

    So California, meet the dystopic future, where cutting K-12 school days and rocketing higher education fees are the best option.

    Budget

    A Response to CA Controller Chiang’s Challenge from the HHS Network of CA

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    In an interview with the Sacramento Bee on Wednesday, California Controller John Chiang said lawmakers who fear the prospect of automatic mid-year budget cuts should find alternatives soon:  “I say if you don’t like the fact that we may have triggers, then you better offer an alternative, and you should offer that alternative pretty quickly.” Here at the Health and Human Services Network of California, we’ve been fighting the deep cuts to our social safety net and rolling out revenue solutions to the California budget crisis for quite a while now, so we were happy to hear Controller Chiang throw down the gauntlet. California legislators, here is our list of revenue alternatives to Trigger Cuts:

    •Treat oil companies the same as every other government in the world and tax their extraction of oil in California: California is the only oil producing state in the world that does not tax oil production. Furthermore, an oil severance fee is imposed on the process of extracting oil from the ground, and is not passed on to producers or consumers. An oil severance fee could bring an extra $1.2 billion dollars to our state.

    •Eliminate secret corporate tax loopholes:  End the corporate loopholes that let corporations avoid property tax reassessment when properties are sold, bringing $1.7 billion dollars to California. Currently, corporations and companies make liberal use of numerous loopholes that allow them to avoid property tax reassessment when properties are sold (i.e. bank mergers, private equity buy-outs). By splitting the property tax rolls, we can make commercial-industrial property owners pay their fair share to the state – California homeowners have grown to pay a far larger share of property tax in the state since Proposition 13, and we need to correct that imbalance.

    •Reinstate top income tax brackets to 11%:  25% of the income generated in California is distributed among the top 1% of the state’s wealthiest earners. At a time when unemployment levels are skyrocketing and the state is facing yet another multi-billion dollar budget deficit, reinstating the top income tax brackets to 11% would give the state’s economic recovery a powerful kick-start of about $4 billion dollars.

    •Smart savings from Corrections: California could save an additional $1 billion by implementing sustainable and common-sense reductions to the state’s corrections budget — without posing a threat to public safety. Options include releasing 1,500 of the sickest, non-violent offenders, halting additional prison construction, as well as others.

    •Apply jobs test to unsuccessful & costly corporate tax breaks: Enterprise zones and other corporate subsidies have demonstrated absolutely NO impact on job creation/retention in California. By eliminating widely discredited enterprise zones, favorable treatment for like-kind exchanges, water’s edge tax havens and other unjustified tax expenditures, California could generate an additional $1 billion in revenues.  

    •Mandatory Single Sales Factor: Modifying existing law that allows corporations in California to choose how their profits are taxed. Require corporations to use a “mandatory single sales factor” – based on the percentage of sales made within California.  This would bring in an additional $428 million to help fix our budget crisis.

    These are just a few of the many revenue solutions we have in California to protect our social safety net, help families weather this recession, and return the state to prosperity. Deep cuts to essential health and human service programs will no longer work. We have tried it for years and it’s a losing proposition for California’s families, schools, health, jobs, and economy. These trigger cuts will lead to more lay-offs, foreclosures, and reduced economic activity in California. Republican legislative leaders blocking reasonable tax alternatives are only furthering the economic downturn. It’s time to reinvest in California, revitalize our economy, and find those revenue solutions.

    The Health and Human Services Network of California is a broad coalition of organizations fighting on behalf of California’s families, seniors, people with disabilities and others for a California Family Recovery Budget – one that creates and maintains jobs, provides a strong safety net for where there are not jobs and brings in state and Federal funds for the relief of our struggling families.