Here in the dog days of April, as the state awaits the governor’s May Revise, frustration seems to be setting in over the budget. The real political battles will begin in earnest after the May Revise, but the jockeying for position has been going on for some time, including in the state’s media. Unsurprisingly, the media wants to spin the budget crisis as a failure of all Sacramento politicians, when in fact the current impasse is the responsibility of one group alone: the Republicans.
As an article in today’s Sac Bee would have us believe, there is “scant support for budget changes.” But a deeper look shows that while Democrats have already proposed budget fixes, such as closing the yacht loophole and creating an oil severance tax (as exists in nearly every other state), it is the Republicans alone that have blocked meaningful budget action.
And why have they done so? Republicans want us to believe that any revenue solution is economically damaging:
However, Sen. Dave Cogdill of Modesto, the GOP’s incoming leader, said the state should not take away credits at a time when the economy is struggling.
Other ideas that have yet to gain traction would raise income taxes on high-wage earners or amend Proposition 13 to assess businesses in the same way as residential property. The latter, known as “split-roll” property tax, would require that commercial and industrial properties be reassessed more regularly, bringing the state an estimated $3 billion annually.
Cogdill dismissed all as non-starters.
“We should help the general fund by stimulating the economy and be a more beneficial partner with industry, rather than stifling them,” Cogdill said.
But whose economy is stimulated by revenue cuts? Who actually sees this so-called economic growth? And who suffers from the spending cuts that are forced by the revenue cuts? A closer look at the overall situation shows that the Republicans’ claims are nonsense. Tax cuts provide economic growth for a wealthy few, but cause economic distress for pretty much everyone else – especially when those tax cuts come at the expense of education. More below.
Earlier this week I discussed Steve Lopez’ extraordinary column in the LA Times about how his daughter’s school has asked parents to fundraise to keep teachers on salary. The column sparked a dramatic reader response, which Lopez discusses in today’s column:
Tokofsky said he warned district leaders there should have been a parcel tax on the ballot this year to cover massive slashing by Sacramento — Gov. Arnold Schwarzenegger has proposed a $4.8-billion fleecing of the state’s children — but no one had “the guts” to tell the public the truth.
And what is that truth?
The truth is that political leaders love lying to us about what a civil society costs. They’re even willing to trade our children’s futures for their political futures, and California is now plummeting toward the bottom tiers in funding per pupil in the United States.
Though it might be hard for Sacramento’s pols to understand, sometimes you’ve got to find the courage to tell yacht owners you’re closing their tax loopholes, tell drivers there’s a stiff price to pay for a break on the car tax, or do what Reagan and Wilson did, and raise taxes temporarily to avoid draconian cuts.
Darrin James, a teacher in Santa Ana, said teachers could be laid off by the hundreds in his district.
How exactly is laying off 20,000 teachers – for starters – going to produce economic growth? As we enter a recession, that’s 20,000 fewer people paying a mortgage, eating out at a restaurant, shopping at a mall.
More importantly, the long-term economic damage of these education cuts is incalculable. California businesses need educated workers if they are to survive. If they can’t find those workers here they’ll relocate to a state where education funding is taken seriously, or they’ll leave the country.
If middle-class parents have to dip into their own pockets to pay for teachers, that’s less money they have available to spend and keep the economy afloat. If lower-income parents must do the same, and find their health care benefits cut out of existence, then the economy will suffer as well.
The only people who benefit from these tax and spending cuts are those who are already so wealthy that they are insulated from its effects – those who can afford to send their kids to private school, or who can afford to live in a school district with a high property tax base like Carmel, or Beverly Hills, or Woodside.
It is THOSE folks whose economic growth is being protected by the Republicans. Education and health care cuts make California less competitive and leave fewer dollars in most Californians’ pockets, but they enrich those already wealthy.
This isn’t a speculative argument. All we need to do is look around us. Since California’s tax cut mania began in 1978 we have witnessed a generation of inequality, characterized by a growing divide between low-income and high-income earners and the evaporation of the middle-income strata. Here in the 2000s California has slashed taxes even further, and yet the state’s working families are further behind than ever before. 30 years of tax cuts have produced economic growth for those at the top, and produced slow but steady immiseration for everybody else.
As the legacy of California’s 20th century liberalism fades, this will become even worse. The only thing that has allowed any semblance of economic growth in the state for the last 30 years has been Pat Brown’s legacy of massive investment in public education and public infrastructure. The companies that employed Californians over the last 30 years benefited not from 1980s and 1990s tax cuts but 1960s spending on colleges, which produced the entrepreneurs and workers that kept those companies at the forefront of the American economy. They relied on 1960s-era infrastructure, from freeways to aqueducts to BART, to operate. Without renewed investment in schools and infrastructure, and now health care as well, California’s economy will sputter. And we have new issues, such as a climate and energy crisis, to contend with.
Steve Lopez was absolutely right to say that “political leaders love lying to us about what a civil society costs. They’re even willing to trade our children’s futures for their political futures.” But he should have been specific. It is Republicans who are lying to us about these things. It is Republicans who are asking us to trade our children’s future for their immediate political future.
What Republicans are ultimately asking us to do is trade our economic future for aristocracy. To open our wallets so that the wealthy don’t have to open theirs.
The only way that this situation will change is if the public steps up and forces the Republicans to climb down. That activism is already starting to emerge. But it is going to need our support and assistance. The stakes are enormous, but with public mobilization, we can win this fight and provide a viable economic future for this state. And without that mobilization, we will lose that fight, and become a state defined by aristocracy.