It’s a question I find myself asking more often, as evidence mounts of his sheer incompetence at managing the state’s finances. Remember that Arnold’s very first act as governor was to blow a $6 billion hole in the budget by repealing the reinstatement of the VLF. Since then Arnold has slowly but steadily argued for budget cuts while holding the line on new spending. His solution to the 2003 budget crisis – massive borrowing – has led to annual costs of $3-$4 billion. The entire current budget deficit can be laid at his feet.

Now Arnold has gone and made it worse. As Matier and Ross explain in today’s column, Arnold’s high-profile “omg we need $7 billion to live” stunt has backfired dramatically. Arnold’s dire warnings have apparently convinced Wall Street that California isn’t a good credit risk:

What began with the governor’s call to arms over the national credit crunch – and fears about whether California would be able to secure a normally routine, $7 billion short-term loan so it could pay its bills – quickly escalated into something even bigger.

That happened when Schwarzenegger went public with California’s dismal money picture, followed by state Senate President Pro Tem Don Perata’s projection that the state’s finances could be more than $5 billion out of whack by the end of the year.

Suddenly, the state’s troubles got played up in the national press, and lenders got the jitters.

Although it’s worth asking why on earth Don Perata still has any role to play in the budget, the real blame here lies again with Arnold. His reckless disregard for California’s budget has now brought us to the brink of serious, crippling budget cuts. The specter of mid-year cuts, which will be especially devastating to education, is growing thanks to his incompetence.

Much of the California media still tries to let Arnold off the hook by painting the budget crisis as somehow the product of natural forces, or the economic downturn. Economic weakness doesn’t help matters, but the fact remains that Arnold’s polices are the direct cause of our state’s financial crisis.

I will be on KRXA 540 AM at 8 this morning to discuss this and other California politics topics.

George Skelton holds Arnold responsible for the worsening political climate in Sacramento in his column in today’s LA Times:

Overrides of any bills are humiliating and extremely rare — the last one was 29 years ago when Jerry Brown was governor — and generally are regarded as symptoms of gubernatorial weakness.

Schwarzenegger has vowed to retaliate by vetoing “hundreds of bills” passed by the Legislature in the closing days of its session, measures close to many lawmakers’ hearts.

At that point, the Capitol would be heading into nuclear winter.

But rather than write the easy column – blaming everyone for the crisis and calling for some moderate solution – Skelton digs deeper and takes Arnold to task for his posturing and particularly his tendency to increase his demands once the Legislature has given him what he wants:

And what’s this all about? Besides the governor trying to escape any blame for a bad budget and position himself standing up to an unpopular Legislature?

The state already has a rainy day fund. The Legislature agreed to increase it significantly and to transfer into the pot unexpected “April surprise” revenue exceeding 5%. The dispute is over when and how the money can be extracted from the fund. At least, that was the dispute.

Democrats agreed Wednesday to Schwarzenegger’s demand that the fund be tapped only when the state is collecting insufficient money to pay for current services, according to one source familiar with the negotiations. But then Schwarzenegger — seemingly itching for a fight — asked for more.

It’s clear to me what’s happening here. Arnold took one look at the Field Poll that showed 15% approval for the Legislature and decided now was the time to play hardball. Knowing that legislators would not be interested in prolonging budget fight that causes Californians suffering so close to an election, he is pushing hard, shock doctrine style, for his right-wing reforms.

The Legislature has its share of blame for this crisis – Republicans who used the 2/3 rule to hold the state hostage are the prime culprits here – but Skelton is right to refocus our attention on the role Arnold has played in helping break California’s government at a time when strong, decisive government action is needed to save us from the economic abyss.

Of course, the problems with our government are structural. Perhaps it’s time for more fundamental forms of change – changes to the way our state’s government operates. We can’t keep doing this any longer.

Sacramento Democrats have unveiled their core tax proposals, and they involve raising $9.7 billion in taxes from the wealthy and from corporations, according to the LA Times:

Most of the new revenue would come from an income tax hike.

A dependent-care credit currently available to all Californians also would be eliminated for families with an income of more than $150,000….

Income taxes on families earning more than $321,000 would go up by 7.5%. Joint filers earning more than $642,000 would see an 18% hike.

The proposal also includes an amnesty intended to entice tax cheats to pay up, the suspension of various tax breaks for corporations and the restoration of a franchise tax on businesses.

These are good moves to deal with the structural  revenue shortfall, especially the closure of tax giveaways that the wealthy do not deserve and do not need. Progressive taxation is exactly what Democrats must stand for and so this is a welcome proposal.

Of course the Yacht Party plans to fight this to death:

Assembly Budget Committee Vice Chairman Roger Niello (R-Fair Oaks) said Republicans are “categorically opposed” to the broad-based tax hikes and predicted they would be defeated in floor votes….

Schwarzenegger spokesman Aaron McLear said that although the governor is opposed to tax increases, he is pleased to see the budget process moving forward.

But this is very smart politics from Democrats. It matches the proposals of Barack Obama and Congressional Democrats, who both plan to raise taxes on the wealthy to pay for new spending and budget balancing, presenting a united front. It puts the Republicans back on their heels here in CA, especially in advance of the fall elections, where Democrats ought to beat Republicans over the head on the budget. “Republicans want to close schools to give the wealthy a tax break” – that is excellent framing given the public mood.

There are signs that Dems are beginning to be smarter about how they defend these proposals:

Democrats defended the tax increases as consistent with action the state has taken in the past.

They noted that raising the tax paid by high earners from the current top rate of 9.3% of income to as much as 11% is exactly what the state did during the budget crisis of the mid-1990s, when Pete Wilson was governor.

“These are really just rolling back tax cuts that have been made,” said Senate Budget Committee Chairwoman Denise Moreno Ducheny (D-San Diego).

Both points are right on. The tax solutions of the early 1990s not only helped close the budget deficit but helped California become poised for the broad economic growth we experienced in the 1990s. Contrary to Republican claims those taxes didn’t induce a flight of the wealthy or of jobs.

Ducheny is also smart to point out that these were tax giveaways – many of them made during the dot com boom when Republicans recklessly demanded wasteful spending, in the form of tax cuts, during a temporary spike in tax receipts.

It’s not clear where this plan is headed. Personally I think it took Dems a little too long to come out with these proposals, and I always worry that they’ll quickly abandon them in order to cut a bad deal with Republicans.

Democrats need to understand they are in the driver’s seat on the budget this year – the 2/3 rule certainly makes things extremely difficult, but on the politics alone, Democrats should have the edge. If they aggressively pursue this tax plan in public, as part of a broad strategy to undermine Republicans, they should reap the rewards.

Given all the buildup that came before Arnold Schwarzenegger’s May Revise, it may seem surprising that we have heard relatively little about the budget from the state’s media and politicians over the last few weeks. The June primary is partly responsible for this, as Sacramento’s attention is on the various primary contests in legislative districts around the state.

But an even bigger factor is that there does not actually seem to be any budget solution being actively discussed, and certainly none that would realistically solve the budget deficit. Arnold’s May Revise used as its cornerstone a questionable lottery borrowing plan, but as Evan Halper explains in today’s LA Times it is becoming difficult to take the plan seriously:

Californians find the governor’s lottery strategy so distasteful, a recent state poll suggests, that they would rather have their taxes raised. Meanwhile, lawmakers are denouncing the plan as a gimmick, and analysts say it could prove far costlier to the state than Schwarzenegger is letting on.

Voters would have to approve the governor’s proposal. But Mark Baldassare, president of the Public Policy Institute of California, said they meant it when they approved the lottery by ballot measure two decades ago to raise funds solely for schools.

“They don’t see it as money to move around and use for other purposes,” he said.

Administration officials are adamant that schools, the beneficiary of the lottery, would not lose money. Still, the institute released a poll Wednesday showing that only 30% of likely voters support the lottery borrowing (with 8% undecided), while 57% back the 1-cent sales tax increase that Schwarzenegger is grudgingly proposing as a backup if the lottery plan falters.

Although it’s not clear to me whether the 1-cent sales tax increase requires a 2/3 vote, Democrats should take note of that poll result. 57% is a pretty clear majority of Californians, suggesting that concerns voters won’t support higher taxes are overblown at best.

Halper wants to argue this is a sign that voters love their lottery, but the stats suggest otherwise:

California’s lottery is one of the more outdated in the country. And last month lottery officials reported that sales were $275 million below projections for the fiscal year ending this month.

So I don’t think it’s that voters have a strong connection to the lottery. What this instead suggests to me is that voters can see right through gimmicky proposals to provide yet another short-term budget fix, and are instead demanding long-term, permanent solutions.

Combine the lottery bonds’ low poll numbers, the dim prospects that the lottery would ever attain the sales levels necessary for the bond plan to succeed (as the article notes, lotteries need video terminals to achieve high sales figured and the tribal casinos would surely never let that happen), and the lack of enthusiasm around Sacramento for the plan and it seems that Arnold’s budget is DOA.

Unfortunately nobody has yet stepped up in Sacramento to offer an alternative plan. Arnold Schwarzenegger’s administration is a clear failure, but that doesn’t absolve Democrats of their responsibility to provide a coherent alternative. Californians are seeking real solutions, permanent budget fixes that will solve the structural revenue shortfall, protect core services, and position California for success in the 21st century economy. If we don’t solve this now, this state is going to fall permanently behind the rest of the globe, and more and more Californians are beginning to grasp this.

Now would be a good time for Democrats to step up and offer a coherent, long-term budget solution. Propose it before July 1 and start mobilizing public support for it as soon as possible. We know that Republicans will maintain a ridiculous “no new taxes” stance, but that seems to be politically untenable in this climate and is setting them up for big losses in the 2008 elections. Californians deserve a clear choice, and they deserve a budget that is sound, stable, and structurally secure.

Last fall I took the LA Times to task for framing the state budget crisis as a problem of “automatic” spending, and not being sufficiently attentive to the structural revenue shortfall that is the true cause of the budget problem.

While the LA Times has shown some improvement – George Skelton’s column today is mostly if not completely on target and the incomparable David Lazarus always has some good insights – the rest of the state’s media seems slower to follow.

Take, for example, Sunday’s SacBee column from Daniel Weintraub, California  Budget 101: What went wrong, when. Weintraub’s column purports to be a “a fuller explanation of the dimensions of the problem” – but winds up repeating the same discredited arguments, namely that this is primarily a spending problem:

But the economic issues only worsened a basic, structural problem in the state budget: Spending is programmed by law to grow each year at a rate that is generally faster than tax revenues can match. Current state law would push general fund spending to $113 billion next year if nothing is done to slow it, according to the Schwarzenegger administration. Revenues, meanwhile, are projected to decline further, to about $95 billion. The budget Schwarzenegger celebrated last summer would have bridged the gap for one year at best.

Weintraub then goes on to detail the education, health care, prisons and transportation spending that makes up that growth. But nowhere in his column would you see the following:

• Tom McClintock and Arnold Schwarzenegger’s $6 billion VLF cut
• Another $6 billion in tax cuts made to the state budget after 1993
• And of course, the start of the state’s budget problem: Prop 13.

In other words, Weintraub makes it sound like the state is in a budget crisis because it is overspending, instead of because it is undertaxing. This is especially important when we consider what the state has been spending on – education, health care, and transportation – the very things California needs to remain competitive in a globalized 21st century economy.

The aforementioned George Skelton column provides an excellent contrast, showing what a more accurate explanation of our budget problem would look like:

People, one place it [additional spending under Arnold’s administration] went was for Schwarzenegger’s car tax cut. Yes, that tax cut counts as spending — about $6 billion annually. It’s because revenue from the car tax — the vehicle license fee — had gone to local governments, not the state. The governor generously agreed to replace the locals’ lost revenue with money from the state general fund. But he never replaced the tax he grandiosely whacked. Big hole. Big mistake.

Even Dan Walters, the dean of California conservative columnists, has recognized the role tax cuts have played in the budget shortfall:

The 2000 decision to spend most of a one-time, $12 billion tax windfall on permanent spending and tax cuts that could not be sustained, leading to the state’s chronic budget deficits, is another [wrongheaded move].

And to his credit, Walters has argued for higher taxes, although as part of a holistic budget reform package that contains some problematic ideas.

The fact is that if we are to finally end 30 years of budget crisis, we have to find new revenues. The notion that any new taxes cripple economic growth is absurd – both California and the federal government hiked taxes between 1990 and 1993 and it didn’t prevent the 1990s economic boom. The investment in education and mass transit helps create more investment while saving commuters, students, and workers money; and universal health care (or even a modest expansion of government-provided care) creates significant savings for businesses and employees.

A focus on spending, however, blinds us to the structural revenue shortfall and leads Californians and their politicians to assume the only way out is to slash spending – which would make the cost of doing business in California, and the cost of living here, significantly higher.

Without solving the revenue problem, we will never cure this chronic budget crisis.

The ongoing state budget deficit is but one aspect of the crisis facing public services in California. Local governments in particular are still very dependent on property taxes, and when those revenues decline, it affects libraries, local parks, roads, and puts added pressure on local schools.

Which is why this LA Times article is so worrying to see:

The tumbling housing market has prompted county tax officials around Southern California to begin reducing the assessed value of many houses, resulting in lower tax bills for homeowners but less-than-expected revenue for already cash-strapped governments.

The values of more than 41,000 homes have been reassessed downward so far in Los Angeles County, resulting in an average tax saving of $660. Other counties have barely begun the reassessment process but promise to get the job done before property tax bills are mailed in October….

In Los Angeles County, the assessment rolls include 2.3 million parcels and about 300,000 pieces of business equipment, boats and airplanes. The county receives about a third of property tax revenue, cities get a quarter, school districts take 20% and community redevelopment areas and special districts combined receive 20%.

The process by which reassessment takes place is somewhat complicated, but the overall point is that as property values decline, so too will revenues.

And this is going to be a long decline. The “bottom” may not be reached for another 4 years. And as this recession is likely to be long and deep, it suggests that government finances in California, on the state and local level, are going to be stressed for the next few years.

In such a situation the previous approach of “gut and run” – slash the state budget and hope a quick recovery prevents further damage to services – will accomplish little more than creating more suffering.

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.

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.