Tag Archives: Jean Ross

Jean Ross Explains Why California Is Too Big To Fail

Jean Ross of the California Budget Project is something of a hero around these parts. The work of the CBP in speaking up for the lower tiers of our economic strata has been nothing short of life-saving.

Today, she makes the argument in the San Diego U-T to their question of whether the federal government should bail out California. As Robert mentioned earlier, “bailout” isn’t really a great term, descriptively or framing-wise. Nonetheless, the question was out there, and Jean did a great job answering why California really is too big to fail.

Many states are reeling from fiscal problems, but California has itself to blame for its dysfunction, much of which has been brought about through voter-approved initiatives dating back to the passage of Proposition 13 in 1978.

Yet the rest of the country cannot afford to stand by idly as the Golden State drowns in red ink. In the same way that the federal government has deemed Chrysler, General Motors and the nation’s largest banks and financial corporations too big to fail, California – the world’s eighth largest economy – is too big and too important to the nation for failure to be an option. Since World War II, the state has been an economic driver of the country. A fiscal meltdown in California would have reverberations throughout the country and the world.

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What form might that assistance take? A direct infusion of cash, of course, would be desirable. However, if federal officials don’t trust California to spend wisely – and there are plenty of reasons to be doubtful – Washington could further increase its investment in health programs such as Medi-Cal and the Healthy Families Program, where the federal government already pays the majority of costs.

To leave California to flounder would hinder not only the future of the state’s economy, but the national and potentially even the global economies as well. California is and will be the economic engine of the nation’s future – a hotbed of innovation and a 38 million-strong market whose purchasing power will be needed to turn recession into expansion.  

The thing about the Governor’s May revise is that it is as much for the feds as it is for our legislature.  He’s trying to reposition the gun that the Republicans have been holding at the head of the Democrats and the state in general and aim it directly at President Obama.  

Take CalWORKS, for instance.  Quite frankly, I really doubt that even Arnold Schwarzenegger is so short sighted as to refuse a program that pulls down roughly triple what it costs in federal dollars and provides the backbone of the social safety net. Now, I’m sure many of the Yacht Party stalwarts are all about that.  But, Arnold, no, I think this all comes back to the issue of getting the federal government to waive state spending requirements.  So, perhaps Arnold is playing some strange game of chicken with the feds in an effort to steal some federal dollars.

Essentially Arnold is just using the old hostage ploy. In many ways, California has the future of the American economy in its future.  The fact is that the rest of the nation needs a strong California. If California fails, the rest of the nation better get ready for some pretty austere days to come. Perhaps I’m giving Arnold too much credit here, but this is some serious fire that he’s playing with now whether he’s bluffing or not.

Now, Schwarzenegger knows all this, Speaker Pelosi knows this, and frankly, so does President Obama. It’s just unclear as to who is going to blink first.

Podcast with California Budget Project’s Jean Ross

(Come on the radio with us in just a half an hour! – promoted by David Dayen)

A quick notice of an opportunity to have a conversation with Jean Ross of the California Budget Project at 11 AM today.  We will be focusing on Prop 1A and its impact on the general budget mess. The call will be recorded and aired as the next Calitics Podcast as well. It’s something of an experiment with the podcast.

UPDATE: For those of you who missed the call, we’ll be playing it on the Calitics Radio Show at 2 pm today. You can catch that at our BlogTalkRadio channel right here.

We want our cake, and kinda want eat a small slice over in the corner

Robert mentioned the drastic cuts facing higher education earlier this morning, but this PPIC poll on Californians and Higher Ed is worthy of its own post.  Basically, the California dichotomy, which I suppose isn’t all really unique to California, of wanting everything but not wanting to pay for it is still with us.

First, the good news: Californians want a quality education system from top to bottom:

Nearly all Californians across regional, political, and demographic groups say that higher education is very or somewhat important to the state’s future economic vitality and quality of life. Latinos (80%) and blacks (74%) are the most likely to say it is very important. (PPIC

And they think we have a pretty good one now:

Californians give high grades to all three branches of the higher education system: community college (51% good, 15% excellent), California State University (52% good, 10% excellent), University of California (50% good, 15% excellent).(PPIC

Unsurprisingly, cost is labeled as the top concern, with a huge majority (84%) saying it’s a problem. And large majorities favor specific programs to make education cheaper, such as a sliding scale and work-study programs. Furthermore, it seems that there is a lack of education about financial aid opportunities, especially in where it’s needed most, families with low household incomes.

The bad news: While there is clearly a lot of work to be done, but apparently higher education is a bit lower down the line, behind K-12 education and human services, anyway.  It’s true that K-12 needs a lot of attention, we must not grow complacent about higher ed. The more concerning part is something more global: the budget and taxes.  Namely, we’re still a little unsure about the whole raising. It’s classic, “And a Pony” thinking.

Today, most Californians (83%) are concerned that the budget crisis will lead to significant cuts in funding for higher education, and more than half (54%) say spending for public colleges and universities should be a high or very high priority. Yet more than half (52%) are unwilling to pay higher taxes or to increase student fees (62%) in order to avoid such cuts. However, about half (53%) favor spending more state government money to avoid increasing tuition and fees – even if it means less money for other state programs.

Part of the discrepancy has to be in the way you ask these questions.  Because you can’t really, over the phone, lay out the entirety of the budget system and ask people where the money should go. So instead we get a series of questions that goes something like this: Do you want to spend more money for a strong higher ed system? Yes. Do you want to spend more money on better K-12 education? Yes. Do you want to pay taxes for them? No.

Well, I simplify somewhat, but nonetheless this is tough to poll. So, I think the “And A Pony” thinking is somewhat overblown, but not entirely mythical.  It certainly exists, but other recent polling shows that Californians are now willing to pay increased taxes. Back in September, Field reported (PDF) that over 60% of Californians favored some sort of tax increases to help balance the budget.

There is a will, we just need to make sure that everybody up and down the line understands that.  As Jean Ross & the Budget Project point out in a new report (PDF), now is exactly the right time to invest in the future. We shouldn’t be cutting back, but investing so that California will be the first to recover.