WEBLOG: The Budget
Cut That OTHER Spending!
June 11, 2008
For decades people have been hearing that government "spends too much." They have been hearing that it's spending cuts that we need, not tax increases. They've been hearing that most of the government's money is spent on "waste, fraud and abuse." They've been hearing that it mostly goes to welfare, for people who won't work and sit around all day. They've been hearing that taxes are too high, the highest in the world, the liberals who run the world only want to tax and spend, etc. And no one has been reaching the public with the facts.
And after decades of this here is a surprise: people think the government spends too much, that we need spending cuts not taxes, that the money goes to waste, fraud and abuse -- and welfare and stuff like that. Who would have thought?
But ask for specifics like, "What specifically would you cut and by how much?" and you'll get a blank stare. Try that question on a conservative politician some time and you'll get the same blank stare. (Usually accompanied by an exercise commonly known as "the run-around.")
OK, occasionally when an elected official is faced with no choice but to cut or raise taxes you'll get an answer. We saw this recently when the Governor spelled out drastic cuts in schools and other government services -- the actual stuff that our taxes pay for. The public didn't like that one bit. They want that "other" spending to be cut instead. (Of course, the Governor also came up with that weird scheme to borrow from next year's lottery revenue. So what happens next year when we have to pay the bills and don't even have the lottery revenue because that went to this year's budget??? What do we borrow on then?)
Things might be changing. The public might slowly be coming around to understanding that taxes really do need to be raised -- at least as far as a temporary sales tax increase. The Public Policy Institute of California recently released the results of a survey titled Californians and Their Government. (The full PDF is here.) According to the summary,
Solid majorities of residents (58%) and likely voters (62%) oppose the governor’s plan to raise revenue by borrowing from future lottery earnings, but majorities of residents (54%) and likely voters (57%) favor a temporary increase in the state sales tax if the lottery plan fails.And, according to the press release,
The potential temporary sales tax increase is the only tax increase included in the governor’s revised budget. Asked whether they believe tax increases should be part of his plan, residents are split (48% yes, 46% no), although the percentage favoring tax increases has risen sharply since December (30%). [emphasis added]Of course, this doesn't get the budget solved. It's a start but as for real-world solutions today, the public still isn't ready to face facts. This may be because no one has dared explain that there isn't really some "other" spending yet to be cut. Also from the press release:
Californians fail budget math quiz — Page 12Let me leave you with a few suggestions for helping solve the budget mess:
When asked which area gets the biggest share of state spending, only 20 percent of residents correctly identified K-12 education. Asked where the biggest chunk of revenue comes from, only 32 percent give the correct answer: personal income tax.
Proposition 13, an initiative that was sold as keeping little old ladies on fixed incomes in their homes, cut both residential and commercial property taxes. How about bringing commercial property taxes back to market rates?
Oil companies don't pay a "severance fee" when they pump our oil out of the ground to sell back to us. How about they pay for the oil before they sell it back to us?
How about we ask the wealthy to pay sales taxes - the same sales taxes that the rest of us have to pay - when they buy yachts and airplanes? And how about we ask the wealthy to pay their fair share of other taxes as well?
If you are talking to friends and family about the budget, point out that when Governor Schwarzenegger -- who solved previous budget problems by borrowing -- tried to balance the budget without raising any taxes he had to cut schools, health care, parks and much more, and still find ways to borrow. He is a Republican, not a "tax and spend" liberal, so if there were ways to cut "other" spending he would have done that.
There is no other spending to cut because it takes money to rin a government and provide the services we want and need. "The line at the DMV" is an example because if you cut DMV spending the line you hate just gets longer.
Take a look at the Next 10 site and consider how you would revise the budget.
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Budget Analyst Rips Lottery Borrowing Scheme
May 20, 2008
Yesterday I wrote that the Governor's plan to borrow from future lottery revenues is a risky gamble -- yet another scheme to put off the need to ask corporations and the wealthy to pay their fair share of taxes.
The Legislature's budget analyst doesn't like the scheme either. From Monday's Sacramento Bee, Governor's lottery plan could hurt school funding, analyst says,
The Legislature's budget analyst on Monday called Gov. Arnold Schwarzenegger's lottery proposal "flawed" and warned lawmakers that money for public schools could fall short of current levels under the plan.Back to the drawing board.... Currently, lottery profits benefit public schools, from kindergarten to community colleges. Hill wrote that the Schwarzenegger administration made "overly optimistic" assumptions about the potential growth in lottery sales. She warned that public education funding "would fall well short of their current levels -- perhaps by $5 billion over the next 12 years combined."
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Gambling On Budget - What If We Lose?
May 19, 2008
The headline article in Sunday's San Jose Mercury News: A winning bet on lottery money for Schwarzenegger?
FOR GOVERNOR'S BUDGET PLAN TO WORK, TICKET PROFITS MUST DOUBLE
The article discusses ways to increase lottery sales so the Governor can borrow from future revenue to pay today's bills. (And we get to pay huge investment bank fees for the privilege of borrowing our money from our future.)
The article does not discuss the consequences of the possible failure of this wild plan to base the state's financial future on gambling revenue. If it fails we will still owe a huge amount of money to the big Wall Street firms, but will have even less revenue coming in to pay the additional interest and principal. We're talking about the possibility of bankruptcy here, folks.
The article does not discuss the consequences of using marketing methods to push gambling to California's low income citizens. We already know there is a gambling problem just from the amount of advertising that is being done today. Now lottery-pushers are talking about online betting, allowing use of credit cards so people can go into debt, and increased advertising. This can only lead to terrible victimization of people who are susceptible to gambling addiction.
Mostly, though, this Sunday headline article does not discuss realistic ideas for raising revenue to pay for the state's schools, roads, police, firefighters, courts, health care facilities, DMV workers, environmental oversight and the rest of the absolutely necessary things that our state government does for us. These ideas include asking the wealthy to pay the same sales taxes when they buy yachts and jets that the rest of us pay when we buy clothing and cars and necessities, or asking the big corporations to pay realistic property taxes on commercial real estate, or asking the oil companies to pay something when they pump our oil out of the ground and sell it back to us, or closing some of the loopholes that allow big corporations and wealthy to escape paying their share of taxes.
Nope, instead of looking at realistic revenue ideas we're all being distracted by this silly lottery scheme.
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A Short Comment On The Governor's Lottery Borrowing Plan
May 15, 2008
The Governor wants to borrow future lottery revenue to help pay this years bills.
If we pay this years bills with next year's revenue, then there is that much less revenue next year to pay next year's bills.
It's time to realize that borrowing to pay future bills doesn't work. This governor's past borrowing is a big part of why we are in the mess we are in today. Now we owe the money we borrowed and the interest.
There are ways to solve this but they simply are going to have to involve asking the wealthy and corporations to pay their fair share. There is no way around it anymore.
Borrowing isn't an answer, it's just a way to cover the problem.
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Solving California's Budget Problems Without Taxes
May 05, 2008
Over at the blog Calitics, Paul Rosenberg has some "thinking outsides the box" ideas for ways that we can solve California's budget problems without asking corporations and the wealthy to contribute their fair share of taxes. These really are worth looking at.
Since it is obviously important that the burden of financing the state be kept off of the corporations and wealthy, and instead fall on seniors, students and the sick, Rosenberg lays out several ideas, including:
1) Forcing students to donate blood weekly.
2) Forcing children to work,
However, if we've learned anything from the last few years of budget woes, it's that we need to diversify our sources of revenue. Translated into policy terms this means that instead of relying entirely on children's blood, we should rely on their sweat and tears as well. In a word: child labor.3) Using a lottery to choose who we can force to donate organs.
Go read. Paul comes up with some good ideas for how we can increase the burden on our poorest so that the wealthy and corporations continue to be spared from having to pay their fair share.
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The Middle Class Squeeze Is A Result Of LOW Taxes
April 25, 2008
It is a popular misconception that taxes add to the squeeze on the middle class. But it isn't tax increases that have squeezed the middle class, it's tax cuts. It may be hard to believe (after so many years of constant anti-tax rhetoric) but here is why.
The middle class IS squeezed these days. There are pressures and long hours at work, long commutes, health insurance costs, housing costs, food and gas prices rising, and wages are not keeping up -- they haven't been for a long time. But it is not a coincidence that the middle-class squeeze began at the same time as the corporate-funded anti-government, tax-cutting fervor. In fact a good case can be made that many of the reasons the middle class feels squeezed are the result of pressures brought about almost entirely FROM the effects of tax CUTS and cutbacks in government services, regulations and enforcement that went along with the tax cuts.
There are direct and indirect relationships. One example of a direct relationship is the dramatic rise in the cost of a college education. Sending kids to college has become extremely expensive. And this places a very hard squeeze on parents who want their children to get a degree. But here in California tuition was very, very low before Proposition 13. Tax cuts directly led to this squeeze on the middle class. (And remember, most of the property taxes that were cut were on business property.)
Indirect results include rising energy prices from cutbacks in government R&D and subsidies for oil alternatives as well as longer commutes as the government cuts back on transit solutions like buses, trains and roadbuilding or improvements. Health care costs continue to rise because of government inaction and deregulation -- the result of the anti-government sentiment encouraged as part of the the anti-tax campaign. And insurance costs rise while coverage is reduced or even denied as the government cuts back on regulation and enforcement. (My wife is the one who brings in the health insurance for our family. Every year she gets a raise, but every year the amount taken out of her check to cover her portion of the health insurance payment goes up by more than her raise, and her take-home pay is lower. So more squeeze.)
Other areas where the anti-government, anti-tax campaign has increased pressure on the average person is at work. Anyone that works for a corporation is feeling the extra pressures there. As government of, by and for the people declines corporate power fills the vacuum.
And there are so many more areas where we are squeezed by this increasing dominance of corporations in our lives. As government -- the power of We, the People -- diminishes, the corporations swoop in to pick us clean. How many examples of corporate power coming to dominate over people power can you think of?
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Tax Cuts Make Us Poor
April 17, 2008
Some years ago the corporate-funded anti-tax, anti-government advocates paid their way to become the dominant voice in our civil discourse. They said there was a magic, simple formula that would lead to shared prosperity. All we had to do was cut taxes, and everyone would have more money.
Everyone wants to have more money so this sounded wonderful. It is always a seductive argument to tell people that you have a magic formula that can make things better for them. One example is machines that create as much energy as they use -- or more. A common myth is that doctors are conspiring to hide the cure for cancer because it would put them out of business. Another is that there is a formula that turns water into gasoline -- or lead into gold.
"Just cut taxes, and we will all have more money." "Taxes take money out of the economy." "It's your money and you should decide how to spend it."
"But," some people asked, "where will the money come from to pay for our roads and schools and all the things that have made us so prosperous?" The seductive response from the tax-cutters was that government is an anonymous, incompetent, inefficient "them" that spends too much money that we could all have in our pockets, and if we just cut out waste everything would be all right. Just cut the waste.
The thing was, whenever one tried to pin them down on specifics of this waste they would never really explain where all that fat really was that they were going to cut -- at least not in quantities sufficient to match their tax cuts. Don't worry, put us in power, cut the taxes, and it will all sort itself out.
So eventually we fell for it and cut taxes and put the anti-government people in power. When we noticed that their tax cuts went mostly for corporations and the very rich, they said don’t worry, the money would trickle down to the rest of us. So we quieted down and waited for the magic to happen. When we noticed that the corporations and wealthy were getting richer and richer while we were losing our pensions and health insurance and jobs, they said don't worry, tax cuts make us richer. We still didn't understand that you and I and the regular people of California were not part of their "us" that would get richer.
The fact is the public officials that We, the People had elected had done competent jobs and there just wasn’t really much waste to cut. Why would there be? The people that we had elected had been good managers of our money. Democracy and accountability require open, transparent processes that the corporate anti-government, anti-tax advocates labeled as "inefficient bureaucracy." That was the waste they had been talking about - the oversight and transparency of good government! Our elected officials had put these systems in place and they had made sure there was no waste -- it was a myth.
Our government had been humming along, paving the roads, educating our children and investing in projects that led to modern wonders like the Internet. And we had been enjoying the resulting prosperity. California had the best public schools, colleges and universities in the country. We had the best roads, courts, parks, libraries, health care system, water projects and most innovative and open government and this investment had led to a thriving economic ecosystem.
So instead of cutting imaginary waste we started cutting out this engine of prosperity. We cut the schools and the road maintenance and everything else. The education system started getting worse and the roads and other infrastructure started deteriorating. California fell from first to near the bottom on many scales. Companies started leaving the state because of the deteriorating infrastructure and lower education levels.
Then when cutting our own services wasn't enough we borrowed money to cover those tax cuts and pay for what government was left. We borrowed and borrowed and borrowed. We were just like the homeowner who refinanced every year as prices went up it seemed like the gravy train would run forever.
Today the borrowing is catching up with us. As so many homeowners are learning to their dismay: borrowing means payments. And borrowing more means larger payments. In California the payments on our borrowing just happen to be pretty close to the amount of our budget shortfall. The same is true of the federal government.
Now we approach a day of reckoning for our tax cuts. The bill has to be paid, and the people who received the big tax cuts are pointing the finger at you and me. We can continue to cut out government and lay people off. We can continue to cram more and more children into classrooms with fewer and fewer teachers. We can have longer and longer lines at the DMV. We can close parks. We can have fewer police patrols and fire stations and ambulances and health and safety inspectors. We can just get poorer and poorer.
Or, we can start to close loopholes like the one that lets wealthy people avoid sales taxes on yachts and private jets while the rest of us pay sales taxes on everything we purchase. We can start to close loopholes like the one that lets oil companies pump our oil out of the ground without paying us and then sell our oil to us. We can start to raise taxes on the wealthy and corporations who prosper because of the roads and financial and legal system we built, and whose taxes were cut leading to this mess. They need to stop simply taking and start paying their fair share. We can do these things and start to restore the thriving economic ecosystem we once had.
Posted by Dave Johnson - Comments (0) - TrackBack (0)
Tax Internet Sales -- Just Like Local Stores
April 15, 2008
Have you ever bought something online, had a problem, and tried to reach the company's customer support line? Could you even find a phone number to call? If there was a phone number to call did you reach a phone tree or a person? Were you on hold for a long time? If you ever did reach a human, was the person in the United States or did they at least speak English (or Spanish) clearly enough to be able to help you?
A local store employs people in your town, boosting the local economy. The local store either owns or pays rent for their space, which means they pay local taxes to support police and fire services and schools, etc. The local store has people who can help you when you have a problem.
But buying something from your local store usually costs a bit more. This is because they pay to have actual employees to help you, pay rent, pay to maintain a building, etc. And, finally, the goods cost a bit more because you have to pay sales taxes when you shop at your local store.
The state of California, in its wisdom, has chosen to provide a huge tax subsidy to anonymous internet businesses, at the expense of your local retailers. You pay sales taxes locally, but not online.
Shouldn't it be the other way around? Shouldn't the state want to promote local stores, local employment, local police and fire services, local schools and a prosperous local economy? Shouldn't the state be promoting a thriving local economic ecosystem? Instead the state provides a huge competitive advantage to anonymous internet businesses.
With a huge budget deficit, with the Governor calling for 10% across-the-board cuts in your children's schools, police patrols, fire protection, parks, and all the other things our state government does for us, the state still hands the anonymous internet businesses a huge competitive advantage over our local retailers by letting them no charge sales taxes.
You owe it to yourself and your local community to find out if YOUR Assemblymember or Senator supports a requirement that internet companies charge the same sales taxes as your local businesses charge.
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Hating On We, the People
April 10, 2008
At Speak Out California, we have been writing quite a bit about democracy and about the meaning of the words "We, the People."
Decades of conservative/corporate marketing has convinced too many of us to think of ourselves as passive consumers rather than participatory citizens. This thinking has brought with it numerous negative consequences. But if we work to restore our understanding that WE are "the government" we can start to see our state and country the way the founders intended. We can see that we are in control and can make decisions that increase the benefits we receive as citizens.
In a recent post, The Power of the Words "We, the People", I wrote,
As an experiment, try substituting the words, "We, the People" every time you read or use the word "government." Or use the word "our" instead of "the" when you say "the government." Our government, us, we, the people.Later in that post I wrote,
Conservatives have worked hard to make "government" a bad word. They complain about "big government." They complain about "government schools." But what happens when we substitute a form of "We, the People" into their slogans? The whole meaning seems to change.
With that in mind, lets take a look at an opinion column in April 2's Orange County Register by Howard Jarvis Taxpayers Association President Jon Coupal: California Focus: No tax loopholes merit closing. The column is your standard conservative anti-government screed, arguing against closing tax loopholes that benefit corporations and the very wealthy to solve the state's budget problems. It begins,
In recent weeks, Gov. Schwarzenegger, legislative leaders and the Legislative Analyst's Office have called for eliminating what they term "tax loopholes" to help close California's staggering $16 billion budget deficit.The specific tax loopholes under discussion include one that allows the very rich to avoid paying sales tax on new yachts and private jets, while the rest of us have to pay. Another lets oil companies pump our oil out of the ground without paying the state, and then sell it back to us. Another lets sales over the internet go untaxed, giving them a competitive advantage over local businesses that pay rent for a storefront, employ sales clerks, etc.But one person's loophole is another person's legitimate advancement of public policy. This is especially true with those tax credits or deductions that are both broad-based – benefiting large segments of society – and which result in a significant societal benefit.
MORE »
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Oil Tax Defeated, School Budget To Be Cut -- What You Can Do
March 13, 2008
Tuesday's post began,
In Dubai, people get free housing, free medical care, AND $5,000 per month. The people of Dubai share in the country's oil wealth.But in California the big oil companies get to pump our oil from the ground for free, and then sell it back to us. Right now these oil companies are reaping the highest profits of any industry ever in history, making a few people immensely wealthy, and are not giving back any of this wealth to We, the People of California!In Alaska, people not only do not pay state taxes, the state government writes every state resident a check every year. The people of the state of Alaska share in the state's oil wealth.
Our state's budget reflects our priorities and our values. So I wrote that We, the People of California should ask big oil companies to give back some of the immense wealth they are generating for themselves with our oil, so we can fully fund our California schools. I honestly did not know that Assembly Speaker Fabian Núñez was about to introduce a bill to do just that. Well, he did, along with a windfall oil profits tax, and this is what happened:
The bill, which required a two-thirds vote to pass, was defeated on the Assembly floor after Republicans refused to vote for the new taxes.These are choices, and the people of California need to understand that a choice was made yesterday to continue to be the only state that allows oil companies to pump our oil and not pay anything for it. And instead of asking the rich oil companies to give back a bit they want to cut the school budget by another 10%.
Republicans said the bill was a publicity stunt, saying Democrats know that no taxes can pass as long as there is a rule allowing just a few Republicans to block the will of the vast majority. They mocked the effort as an "oil drill."
"I think this truly is a political drill on the eve of the layoff notices that will go out all across the state and on the eve of (the legislative) spring break when we will be at home in our districts talking to our constituents," Assemblyman Chuck DeVore, R-Irvine, said during the Assembly floor debate that lasted about three hours.But do the people of California understand this? Do they realize that just a few votes can allow oil companies to get their oil free, while their children face ever-worsening schools? We need more "publicity stunts" to help them understand the different values and priorities that are being reflected. Politics and life are all about our priorities, not just our choices. What is more important to our people: rich oil companies or well-educated kids?
A choice is being made here, priorities and values are being expressed: cut our schools by 10% rather than ask rich oil companies to give back just a bit. Say it over and over, and then do something about it. Write to your legislators and demand they ask the wealthiest to start giving back a bit.
And remember, this is an election year. This is the time when citizens can do something about it when their legislators are not responding. This is the time that you can remove legislators who give wealthy oil companies tax breaks while cutting school budgets. You can volunteer to work in election campaigns, and go from door to door in their districts, letting voters know that their legislator made a choice and voted to cut school budgets while giving tax breaks to oil companies.
Help spread the word!
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Choices on Taking and Giving Back
March 11, 2008
In Dubai, people get free housing, free medical care, AND $5,000 per month. The people of Dubai share in the country's oil wealth.
In Alaska, people not only do not pay state taxes, the state government writes every state resident a check every year. The people of the state of Alaska share in the state's oil wealth.
Approx. 12 percent of America's oil production comes from California. As I write this oil sells for $108.14 per barrel. In 2005 the oil companies were pumping oil out of our state at a rate of approx 230 million barrels each year. Oil company revenues and profits are the highest ever from any companies in the history of the world, ever. Did I mention "highest" and "ever"?
But the people of our state, in our wisdom, have decided that instead of asking the oil companies to give back a bit, we will instead give them our oil. Give them. And then we buy it back to put in our cars, etc. Yes, we, the people of the state of California have made the choice to give away our oil to greatly enrich a select few. (And this post is not even a discussion of the dozens of other ways that we have made the choice to allow the few wealthiest among us to avoid giving back by paying taxes.)
Today in California we are facing a budget shortfall. And instead of asking oil companies and others to give back a bit we are on the verge of deciding instead to cut our school budget. Again. This time by 10%. We are on the verge of deciding to cut health care. Again. And courts, police, and every other state service by 10%, again, rather than ask oil companies and others to give back from what they take from the state.
The way we solve this budget shortfall is a choice we make. Our choice. Our choices reflect our values and priorities. And we all make these choices whether we think we do or not. If you don't vote, you are choosing. If you vote for someone because you would like to have a beer with him or her, you are choosing. If you choose to vote for candidates who tell you there is "waste, fraud and abuse" and then after they have been in office for decades, continue to claim there is "waste, fraud and abuse," you are choosing. If you choose to let your government borrow and borrow, you are choosing. You will have to pay that back with interest later, of course, but you are choosing.
And if you choose to let your state give our oil away to wealthy corporations so they can sell it to you and get even wealthier you are choosing to make up that potential tax revenue yourself, through cuts in your children's education and health care and law enforcement, or maybe through increased taxes in the future, but one way or another you are choosing.
What are our priorities? Further tax relief to the wealthiest corporations, or educate our children? Here you are on the verge of choosing to cut your schools by another 10%. Is that the choice you want to make?
There is something else you can choose to do today. You can choose to write to your legislators and let them know what your choice really is. You can choose to talk to your family and friends and explain these choices and ask them to write to their legislators as well.
Click here to find out how to contact your California legislators. If you so choose.
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A Line In The Sand -- Stop Cutting School Budgets
March 05, 2008
Governor Schwarzenegger has declared a "fiscal emergency" and is asking the legislature to solve the problem entirely with budget cuts. He has asked for 10% "across-the-board" cuts which at first glance seems to sound fair, but really means avoiding decisions about what budget items are the most important. It means cutting schools 10%. And law enforcement. And medical care. (Of course, they can't cut the interest owed on Governor Schwarzenegger's past borrowing.)
And more than that -- much, much more than that -- it is a trick that leaves out the fact that the state is not collecting needed tax revenue because of loopholes that let big corporations and the wealthy off the hook while the rest of us make up the difference.
It's time to draw a line in the sand and demand that our state government not cut the budget for our children's education any more.
Isn't there a lot of "fat" in the budget, just waiting to be cut? Most people think so. But think about this -- every time the state has a shortfall they cut spending, saying they are cutting out the "fat." As a result, in the decades since Proposition 13 passed they have trimmed and trimmed and trimmed, and we now are long past the point where there is anything left to cut. In fact, today California schools have the lowest number of administrators per student of any state. Our schools have squeezed and squeezed and dropped programs and forgone pay raises and they can't operate any more efficiently.
I was listening to a radio show the other night, someone from the San Francisco schools said this budget cut could mean they have to have 61 students per classroom.
But the Republicans in the legislature won't let us talk about taxes -- not even the yacht tax loophole. You and I have to pay sales taxes but people who buy yachts and private jets do not. They keep California as the only state that won't tax the oil companies for the oil they pump out from our state. They won't find a way to make commercial property owners pay market-rate property taxes.
The Governor and a Republican minority in the Assembly and Senate are still willing to block all alternatives to cutting teachers and health care and roads and parks and those things that We, the People call our government.
So it is time to draw a line in the sand. No more cuts. It is time to ask the corporations and wealthy to start giving back some of the incredible wealth they have made off of the physical, legal and financial infrastructure that We, the People of California put in place that enabled their gains in the first place.
Here are steps you can take to help fight back:
First, join us. Click this link and join Speak Out California. This way we can keep you up to date on our activities, including our activities to help keep our schools funded.
Next, start Speaking Out yourself, writing letters to the editor and contacting your legislators, demanding that the state enact alternatives to budget cuts, like closing tax loopholes and making wealthy people pay the same sales taxes that the rest of us pay.
The California Teachers Association provides a web page that helps you find the correct contact information for your state legislators. Please write to your legislators.
The Education Coalition has a website with facts to help you make your points. Give them a visit, too.
And finally, this is Speak Out California's fundraising month. Help us out so we can continue the work we are doing. Help us keep the progressive voice alive.
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Tax And Budget Priorities: Schools No, Yachts Yes
February 19, 2008
Do you know about the California yacht tax loophole? Here is how it works: Regular people like you and me have to pay sales taxes on the things we buy, even on big items like cars. We even have to pay these taxes if we buy outside of the state. (Technically that is called a "use" tax.)
But California has a special tax loophole just for the things rich people buy. That's right, if you buy a big yacht, airplane or "luxury recreation vehicle," you don't have to pay sales tax. The way this loophole works is, you buy it outside the state, hold it there for three months, and then you have a sales-tax-free yacht.
Summary: Regular people pay sales taxes, rich people don't have to.
Last week there was a budget battle in Sacramento that resulted in a number of cuts that will have a big impact on regular Californians. But the Republicans held firm and blocked attempts to do away with the tax loophole that lets rich people get out of paying the taxes that the rest of us have to pay.
At California Progress Report, Frank Russo explains, "The California Senate passed a repeal of a loophole that allows the multimillionaire purchasers of yachts and private planes from paying a sales or use tax." But the Assembly failed to pass this because of "the opposition of most elected Republicans."
Just to short-circuit the usual arguments about taxes, Frank Russo notes that the Legislative Analyst's Office looked into this and found no change in yacht and plane sales from times when the tax is collected to times when it is not.
As Russo explains, the fight over closing this loophole occurred just after "… medical, dental services, and other programs for children were cut and cost of living increases delayed for the blind, aged, and disabled poor who qualify for Social Security."
Here is what I want to know: Why in the world are the Republicans so confident that they can get away with this?
It is generally understood that the average citizen has been fed enough unanswered anti-tax and anti-government propaganda that they reflexively oppose taxes. (The operative word there is "unanswered.") But this is a very different thing. This is a special exclusion, just for rich people, that one way or another has to be made up for by the rest of us! Why aren't the people of California more upset about this?
The only conclusion I can reach is that the Republicans understand that regular people are not going to find out about this! And they may well be correct. Yes, the story was in a few newspapers, but really, who reads newspapers? This is not how large numbers of regular people get their information about politics in California. They get some of it from TV news, but I really fear that most people in California get their information about the issues facing the state from ads that run during prime-time television shows. And I think that conservatives understand this, while progressives/liberals do not quite "get it."
For example, if regular people were accurately informed about California issue, then people would understand that most of the factors that were used as justifications for recalling Governor Gray Davis are today almost the same with Governor Schwarzenegger. One big difference I see is that the energy companies are not running an ad campaign blaming Governor Schwarzenegger for anything, they way they ran ads blaming Governor Davis for the energy-company-created energy shortage back then.
So, in summary, again, this is about regular people having to pay sales taxes that rich people don't have to. And it is about Republicans being confident that the public isn't going to find out.
What can we do about this? Leave a comment.
Posted by Dave Johnson - Comments (1) - TrackBack (1)
Political Suicide
February 12, 2008
Conventional wisdom considers it political suicide for a candidate to talk about the need to raise taxes so the state can pay its bills -- especially if it involves reforming Proposition 13.
Much of the public thinks that government "spends too much" and that much of the state's budget goes to "waste, fraud and abuse."
Much of the pubic also thinks that the primary beneficiaries of Prop. 13 were little old ladies who otherwise would lose their homes to increasing property taxes.
Reality, rarely consulted, understands things very differently.
California faces another budget crisis. The Governor proposes solving the problem with budget cuts.
California's budget pays teachers, fights crime, maintains roads and bridges and other necessary activities. There simply is no room for cuts to balance the budget. In fact, budget cuts just make following year shortfalls worse. If you lay off teachers they aren't paying taxes. If you don't fix roads the economy gets worse. In the long term, if you don't educate kids employers move jobs to states and countries that do. And, of course, it is always a really bad idea to cut back on police and courts -- especially after years and years of cuts in education.
Budget cuts don't work, so how about the modern solution to budget problems? I mean, of course, just borrowing the needed money. But Governor Schwarzenegger proved that the state can't borrow its way out of budget crunches: A major reason for this year's budget problems is the interest owed on Schwarzenegger's past easy fixes of issuing bonds.
The reality is that the budget cannot be fixed with budget cuts or more borrowing. We need to increase taxes. We need to start by reforming Proposition 13, raising corporate taxes, closing tax loopholes and taxing oil that is pumped from the ground. If we decide to do these things we might find that we not only fix California's budget problems for good, we might even be able to lower income taxes.
Reality also shows that the major beneficiaries of Proposition 13 were not little old ladies but large commercial real estate holders. It would be so easy to put a "little old lady" exception into property tax rules so they are not forced from their homes. But it would be political suicide to even discuss reforming Proposition 13 because of the power of the large commercial real estate owners. They want their tax break and don't care if the whole state goes broke and everyone else suffers. They are able to put a lot more money into the election process than regular people. That is why it is political suicide to talk about raising property taxes.
Why is it political suicide for a candidate to propose ways to fix problems, but not political suicide to cause them or make them worse?
A lot of people say they want a candidate who tells it like it is. But really, that would be political suicide.
Posted by Dave Johnson - Comments (0) - TrackBack (1)
Exactly The Wrong Time For Spending Cuts
January 22, 2008
The country's economy may be experiencing another stock market crash, and the housing bubble has been bursting, causing a housing market crash. And this is all happening before the expected recession hits and causes unemployment to increase. This is grim news indeed for state government budgets.
In particular California just experienced a sharp rise in unemployment. Saturday's San Francisco Chronicle reports, California's jobless rate up sharply,
California's employment market took a sharp turn for the worse in December, the strongest sign to date that the state's economy might be falling into recession.
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Posted by Dave Johnson - Comments (0)
It Is Time to Undo Past Tax Cuts
January 18, 2008
California faces a large budget deficit, and the Governor has declared an emergency. The Governor has proposed "across-the-board" spending cuts -- which means cutting all state services by an equal amount.
This inability to prioritize the importance of any particular spending cuts should be taken as a de facto declaration that there is no waste or unimportant spending left to cut -- that all spending is equally crucial. Driving home this point, the Governor is asking for the release onto the streets of prisoners.
If we don't want prisoners released onto our streets the legislature must raise revenue.
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Posted by Dave Johnson - Comments (0)
A Budget Shock Attack
January 15, 2008
California is said to be having a budget "crisis." Last week the Governor signed an emergency proclamation forcing the legislature to meet and act on the budget within forty-five days.
"Crisis" and "emergency" are serious words, and the public is upset about hearing them. This is, of course, the intent of those using the words -- to get the public upset and demanding action. When people are shocked and worried they will accept solutions that might not be what they would accept if they had time to think, consider all reasonable alternatives and weigh all the consequences. In an "emergency" the public just wants the problem solved. (This is a "Shock Doctrine" approach.)
So having created a crisis atmosphere the Governor is asking for "across the board" cuts in state government spending. This is a tactic that let's him avoid specifying any particular cuts. The reason the Governor does not want to specify any particular spending cuts is because people will realize that such cuts are not a good idea.
Asking for cuts "across the board" sounds so fair. But not specifying also means not prioritizing. By setting no priorities for spending cuts the Governor is saying that one area of spending matters to him no more than another.
Let's be clear about what the Governor is doing. He is cutting police and other law enforcement and public safety. He is cutting schools -- when California already is 43rd in spending per pupil. He is letting prisoners out onto the streets. He is cutting disaster assistance. He is letting roads and bridges deteriorate. That is what government spending is -- and we are who it is for.
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Posted by Dave Johnson - Comments (1) - TrackBack (2)
"We can't afford Proposition 13 anymore"
January 11, 2008
I'd like to bring everyone's attention to a column in Wednesday's LA Times: We can't afford Proposition 13 anymore. Excerpt:
... I know I'm asking for it by even suggesting that Proposition 13 is doing more harm than good. But this topic resurfaces from time to time, and this should be one of those times.Please go read the rest.Schwarzenegger is expected to declare a state of fiscal emergency this week to deal with the budget mess. He proposed a constitutional amendment in Tuesday's State of the State address to give him more power over California's finances.
It's pretty simple, though. Either we spend less money or we raise revenue, or both.
I'll be the first to say that Prop 13 did a good deed by helping elderly people stay in their homes. A fixed-income retired person should not face ever-higher tax payments because the houses in the neighborhood are rising in value. Any changes to address the problems created by Prop 13 must take this into account.
But there is no justification for the present situation where people buying a new house can pay as much as ten times what long-time residents next door are paying. And certainly commercial real estate - shopping centers, hotels, office buildings, etc. - should not get a huge tax break! The reason that our legal system grants limited liability and other benefits to businesses is because businesses are supposed to serve the public good. Paying taxes that help us build the roads that transport the products that businesses sell and building schools that educate the employees are part of that public good.
As we address this budget "emergency" I think the very first thing the state should look at is fixing the tax system, recalling Prop 13, closing loopholes, increasing taxes on profitable corporations, taxing oil companies as they pump our oil out of the ground, restoring the vehicle license fee and imposing a surcharge on the wealthiest.
There is more on this over at Calitics where Robert in Monterey write,
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Posted by Dave Johnson - Comments (1)
Do Taxes Drive California's Economy?
January 08, 2008
Do taxes drive California's economy? An analysis by the Institute for the Renewal of the California Dream's Senior Fellow Dave Johnson:
The governor says California is in a budget crisis. He says we need to cut the state's spending "across-the-board," and the Republicans insist that tax increases and other alternatives are off the table. The media largely seem to be going along with taking discussion of alternatives off the table, and consequently Democrats are too intimidated to bring them up.
But what they are missing is that taxes drive the economy.
Tax-cut proponents say that increasing taxes on the wealthy "takes money out of the economy." I wonder where they think the money goes? Do they think it just goes up into the air and disappears?
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Posted by Dave Johnson - Comments (0)
Will California's leader lead in 2008?
January 01, 2008
As the post-mortems continue to characterize the year just past and prognosticators speculate on what will be the year to come, it is clear that California is in for a bumpy ride over the next several months, if not years. With a projected $14 Billion short-fall (with many estimating the number may reach much higher), there is no question that the times call for some courageous leadership. But in today's political world, where cynics and superficial pundits abound, it is difficult for real leadership to emerge and be given the space to articulate and implement that necessary vision, courage and know-how to make the necessary changes we desperately seek and need.
Commentators proclaim that little was accomplished in the year past---no major health care reform, no real water policy emerged to deal with our state's chronic but moving toward acute problem, little real movement to develop a massive but necessary investment in transportation infrastructure, including our roads, bridges, ports or public transit, sewer systems, schools, etc. The bottom line is: we haven't seriously or effectively addressed these needs. Our massive prison system is crumbling under its own weight, while federal judges determine whether we are complying with basic legal and human rights while we warehouse more and more people and spend greater and more scarce resources in doing so.
There are many who study our state's political institutions and systems and declare the state ungovernable, observing that we are too dependent on special interests who fund campaigns; suffer from public initiatives generated from out-of-state business or ideological interests who are using our state as a guinea-pig; a tax system that is arcane and heavily-weighted in one direction or another. Also factored in is simply the massiveness of our state, with one out of every eight Americans living within our borders. So where is the leadership to deal with all this?
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Posted by Hannah-Beth Jackson - Comments (0)
Fighting An "Emergency" With One Hand Tied Behind Our Backs
December 18, 2007
Our ongoing series on the California budget is interrupted by an "emergency." With California state budget deficit projections rising from $10 billion to $14 billion the Governor plans to declare a budget "emergency," saying he might propose "slashing" the state's budget by 10% "across the board."
But doesn't a budget involve spending and revenues? Why is the Governor tying one hand behind our backs? Why is the Governor only proposing that the people who are in a position to really need our government's help be the ones who must sacrifice in this "emergency?"
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Posted by Dave Johnson - Comments (0)
The Line at the DMV
December 11, 2007
Two previous posts explored the outline of the California state budget, and the process by which the budget is developed and passed into law. But these overviews don't directly touch most Californians in their daily lives. To begin to connect the budget and the budget process with the concerns of regular Californians let's look at one department that almost every adult in California encounters regularly: the dreaded Department of Motor Vehicles, commonly known as the DMV.
According to the DMV website, the department:
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Posted by Dave Johnson - Comments (0)
How Does California Develop The State's Budget?
December 04, 2007
Last week I began to explore California's budget, and wrote,
Our budget reflects our values. So where do we spend our money? How many Californians even know? I didn't know so I decided to find out.That post outlined this year's budget, with an overview of the departments and amounts.
This week I take a look at how we in California put together our budget. By understanding the process more of us can begin to get involved and work to ensure that the budget really does reflect our values.
As you consider the budget process and its limitations and constraints, compare it to how your own home budget operates. What do you do if you need a new car, or need to fix up your house -- or just repair the roof -- or provide a good education for your kids, put healthy foods on the table, and things like that. The state isn't really different, just bigger.
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Posted by Dave Johnson - Comments (0)
Exploring California's Budget
November 27, 2007
Our budget reflects our values. So where do we spend our money? How many Californians even know? I didn't know so I decided to find out.I quickly discovered that learning about the California budget is not an easy process. It is complicated, with General Funds, Special Funds and Bond Funds. And there are the Governor's Proposed Budget, the Governor's Revised Budget and the Budget as Enacted.
So for the next few Tuesdays I am going to explore California's budget. Following is a table summarizing the state's enacted 2007-2008 budget:
2008 Update This information was taken off the web, so the links are changed to point to the Governor's proposed budget. The items in the chart are still the 2007 enacted numbers.
The following table presents enacted fiscal year positions and expenditures for each agency area. These totals are comprised of State funds which include General Fund, special funds, and selected bond funds. These totals do not include federal funds, other non-governmental cost funds, or reimbursements.
| State Agencies | 2007-08 | |||||
|---|---|---|---|---|---|---|
Positions |
General Fund* |
Special Funds* |
Bond Funds* |
Total State Funds* |
||
| K thru 12 Education | 2,919.7 | $41,341,014 | $93,003 | $3,989,977 | $45,423,994 | |
| Higher Education | 120,419.1 | 11,979,841 | 42,065 | 2,956,637 | 14,978,543 | |
| Health and Human Services | 32,955.5 | 29,718,647 | 8,129,655 | 158,377 | 38,006,679 | |
| Corrections and Rehabilitation | 66,627.4 | 9,836,311 | 22,091 | - | 9,858,402 | |
| Business, Transportation & Housing | 44,224.0 | 1,567,294 | 8,639,757 | 3,078,326 | 13,285,377 | |
| Resources | 16,557.0 | 1,674,007 | 2,060,448 | 1,789,017 | 5,523,472 | |
| Environmental Protection | 4,812.0 | 90,449 | 1,045,855 | 695,993 | 1,832,297 | |
| State and Consumer Services | 16,019.6 | 576,862 | 806,178 | 23,886 | 1,406,926 | |
| Labor and Workforce Development | 11,492.5 | 103,375 | 320,840 | - | 424,215 | |
| General Government | 13,343.0 | 1,578,892 | 6,008,163 | 952,337 | 8,539,392 | |
| Legislative, Judicial, and Executive | 16,396.9 | 3,791,501 | 2,045,002 | 427,275 | 6,263,778 | |
| TOTALS | 345,766.7 | $102,258,193 | $29,213,057 | $14,071,825 | $145,543,075 | |
* Dollars in thousands
However arrived at (and I'm sure we'll get to that) the current budget priorities of the people of California (our values) break down in broad categories in the following priority: (dollars in thousands)
1) K-12 Education $45,423,994
2) Health and Human Services $38,006,679
3) Higher Education $14,978,543
4) Business, Transportation & Housing $13,285,377
5) Corrections and Rehabilitation $9,858,402
6) General Government $8,539,392
7) Legislative, Judicial, and Executive $6,263,778
8) Resources $5,523,472
9) Environmental Protection $1,832,297
10) State and Consumer Services $1,406,926
11) Labor and Workforce Development $424,215
You can click on each category i the chart to see how it breaks down. For example, Health and Human Services breaks down into:
Health & Human Services Agency, Secy
State Council-Developmental Disabilities
Emergency Medical Services Authority
Statewide Health Planning & Development
Department of Aging
Commission on Aging
California Senior Legislature
Department of Alcohol & Drug Programs
Children & Families Commission
Department of Health Care Services
Department of Public Health
California Medical Assistance Commission
Managed Risk Medical Insurance Board
Department of Developmental Services
Department of Mental Health
Dept of Community Services & Development
Department of Rehabilitation
State Independent Living Council
Department of Child Support Services
Department of Social Services
State-Local Realignment
General Obligation Bonds-H&HS
Next week we'll begin exploring some of the mysteries of Bond Funds, Special Funds, and my personal big question - how much of our tax money is spend paying interest on the borrowing that has been taking place.
Posted by Dave Johnson - Comments (0)
The ever-busted state budget
November 08, 2007
With the national economy set to go in the toilet (if Wall Street is a good indicator), the state of California once again faces a budget crisis in the billions of dollars. But this time we won't be hearing the naysayers blame Governor Schwarzenegger, as they did Gray Davis, when the national economy hit the skids back then.
This time we do recognize that the problem doesn't fall just at the feet of one person--it is the failed policies of an administration that insists on privatizing everything it can and letting the profiteers take as much as they can get their hands on until they're caught.
In this case, though, the fault lies with a variety of folks---starting with the Friends of Dick Cheney, the oilees who continue to jack up the price of gas at the pump so their profits can remain in the stratosphere as working famillies have less and less disposable income as a result.
Or take the housing boom. If there was ever a house of cards, this was it: Encouraging people to borrow, borrow, borrow---either for their downpayments, mortgages, or second mortgages on property at interest rates that fluctuate. And how they've fluctuated. Now, people who bought homes they couldn't afford, or who were propping up this fragile economy by borrowing against their homes, see it all coming home to roost--complete with foreclosure documents and pink slips.
And the prognosticators are warning that California is in for a big hit because of it all: the failing housing market, bad credit consequences, job instability and just a good old but hearty down-turn in the American market because of ridiculous economic policies advanced by the Bush Administration.
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Posted by Hannah-Beth Jackson - Comments (0)
Obstinance or principle?
August 10, 2007
I still remember, as though it were yesterday, the defining moment in my early political awakening. I was no more than 12 years old, sitting in a podiatrist's chair, gamely enduring treatment for a youthful plantars wart that had lodged itself deep in my foot. The doctor looked like a marine drill sargent, with close-cropped prematurely graying hair. In the midst of the procedure, we embarked on a discussion about politics. I'm not exactly sure what precipitated the first of many intense but respectful political debates Although clearly in the weaker position (he was digging into my foot with some pretty ugly looking instruments) the debate centered on the role of government in America. He posited that the business of government was business. I responded by insisting that the business of government is people.
What government should be doing is a fundamental issue confronting us in this post-Reagan and soon-to-be post Bush era. Our right-wing friends in Sacramento have demonstrated not only an opinion that business is the focus of government, but an ideological obstinance that extends far beyond respectful disagreement to ideological intractability. They have taken the notion that business is their motivator to a new low. Fortunately, their extremist views represents a minority position and in the nature of a democracy, it is the majority who rule. At least that is what we were taught in Civics class at school.
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Posted by Hannah-Beth Jackson - Comments (0)
The Governor's Birthday present--with love from his Party
July 30, 2007
Much has been made of the fact that today, July 30th is Governor Arnold Schwarzenegger's 60th birthday and wouldn't it be a great present if the Reps. would come together, sing Happy Birthday and Kumbaya and give the state a budget and move on with the other important business at hand.
Such thinking is sweet, but as far from reality as one can get in Sacramento, where reality is usually cast by political consultants and clever media-spinners. No, the Gov. can't rely on his flock for support---or likely even a birthday card. So much for the much ballyhooed smoking tent, late night schnaps and heavily testosteroned bantering in the beautiful outdoors of the "horseshoe" in the Capitol. Must be pretty quiet these days as former Senate Democratic leader and first-buddy to the Gov.John Burton is long gone and any sense of Republican comraderie with the Gov. has taken a similar route.
Nope, there's no fun today in Mudville for this Governor. Of course, he doesn't much mind. After all, he's had his mug all over national and international newspapers and magazines, been meeting with the heads of state, the UN leadership and NYC's own number one honcho, possible presidential candidate Mayor Michael Bloomberg. He's also been seen at the Capitol gym while budget negotiations have been taking place, photographed down in Miami raising over $1.5 Million last week on a jaunt to that city a couple thousand miles away from our shores. This and several other long-distance photo-ops have demonstrated a less than a total commitment to getting a budget passed here in the place Schwarzenegger is actually authorized to oversee and govern.
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Posted by Hannah-Beth Jackson - Comments (0)
GOP Budget for California Found In President Bush's Colonoscopy
July 26, 2007
Over the weekend, California Republican Senators were given some homework – since they couldn’t stop voting “No” on a compromise budget plan approved by Democrats and Republicans in the Assembly, the Senate Republicans had to come up with their own budget plan. In a lucky coincidence, President Bush had a colonoscopy on Monday, and doctors apparently found the Republican budget plan lodged somewhere in the First Colon.
How else can we explain where this GOP budget came from? The Republican proposal would leave tens of thousands of poor people to die, would end several environmental protection laws (??), and would close down several University of California institutes. And that’s just what they made public. Apparently there’s even more draconian and unnecessary spending cuts they’re holding back for some reason. Maybe the rest of the spending cuts are still stuck up Bush’s… colon.
OK, all kidding aside -- I don’t want to be accused of just slinging mud, so let’s take a closer look at the main parts of the GOP budget proposal.
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Posted by Erik Love - Comments (0)
Budget Crunch Time-Who is asking the tough questions?
July 24, 2007
All eyes will be on the California Senate Wednesday as they are back from a few days hiatus while the Republicans have been challenged to put up a budget of their own. With a put-up-or-shut-up challenge by President Pro Tem of the Senate, Don Perata, the Reps were sent back to the drawing board to propose their own budget after they refused, en masse, to approve the deal the Assembly had passed with bipartisan support, and lobbed over to the Senior Chamber last week.
So what can we expect will happen? The deal that was struck by both sides in the Assembly has been narrowed down as follows: (For other Speak Out California stories on this, scroll down to the Budget section under "Archives" part-way down on the left-hand side of the page)
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Posted by Hannah-Beth Jackson - Comments (0)
Budget stalemate--Week Two
July 11, 2007
We've been counting down(or should I say up) the days since the State's budget was due. It really doesn't matter whether you start from June 15th or July 1st because it rarely comes in on time, regardless of the date you pick. While it is always easiest for the public to focus on the simple fact that the budget is late rather than why, it's about time we looked at the why so maybe we can start fixing the fundamental problems that make this yearly exercise so exercising to the public.
Unlike the almost whimsical reports of spay/neuter issues that have aroused the extraordinary passions on both sides of that issue,(will Lassie or Bob Barker from the Price is Right prevail?) it's hard to get people to focus on the more mundane aspects of why we have this annual food-fight when it comes to getting our financial house in order. Let's start with the fundamental problem that exists in California and those two other large and complex states--Rhode Island and Alabama: It requires two-thirds of the legislature to approve a budget. Until one of the two parties in this state grows big enough to take over 2/3's of each of the legislative houses, this will continue to be the fundamental roadblock to an on-time budget.
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Posted by Hannah-Beth Jackson - Comments (0)
Back to the Bottom
June 10, 2007
Now that the flurry of bill activity is over for the moment, the Legislature will be turning its attention back to the Budget for the fiscal year starting July 1, 2007. With a continuing budget shortfall of some magnitude still facing the state (no one is quite sure of the amount since the Governor recently announced a $700 million dollar hole he hadn't seen before), it's time to revisit some of the key priorities of the state.
We've asked one of Speak Out California's newest Board members, Dyanne Cano, to post her thoughts in her capacity as an expert on service-learning and after-school programs in the LA area. In that realm she observes,
not surprisingly, that while California boasts of a huge creative industry supplying billions to our economy,our political leaders show a complete lack of vision when it comes to funding art programs in this state.
Here are her comments:
For the past 30 years, the California Arts Council's mission is "to advance California through the arts and creativity." However, CAC's funding has been cut dramatically over the last few years (from $ 32 million in 2001 to $1 million in 2004 at its lowest--a 97% budget cut in just three years). According to the National Assembly of State Arts Agencies, California now ranks the lowest among the 50 states in arts funding. Mississippi, the District of Columbia and Guam give more per person to the arts; California gives a mere three cents per person.
Why is increased funding for CAC important? In a 2006 op-ed piece for the San Fransico Chronicle, Alma Robinson, Executive Director of California Lawyers for the Arts, wrote, "Since 2003, when the state's General Fund allocation for the California Arts Council was reduced to $1.1 million, we lost most of the funding for arts education, artists' residencies and fellowships, the arts touring program and grants for the state's diverse arts organizations -- from the mini to the major. Many arts presenters, community arts programs, local arts councils and arts-service organizations are on life support."
To help increase CAC's budget from its current budget of $5.1 million and to protect it from further cuts, there are ways you can tell your representatives that the arts do matter.
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Posted by Hannah-Beth Jackson - Comments (0)
Making state dollars go farther
May 29, 2007
Sometimes in politics, the easiest solutions are the most elusive. That should not be the case with one part of the state budget discussions. When it comes to trying to leverage state tax dollars to maximize federal money at small state cost, there is no simpler discussion than putting in a meager $24 Million to increase the Medi-Cal reimbursement rates for our state's safety net health care providers like Planned Parenthood and Neighborhood Health Clinics.
These providers are requesting the state increase their reimbursements for the first time in 20 years, although their work and responsibilities have expanded greatly over time and the costs to them have increased substantially as the sheer costs of delivering health care services---from staffing to pharmaceuticals, have shot through the ceiling during the past two decades.
But the common sense of it all should be the deal maker alone. For less than 1/10th of 1% of the state's budget, we could see California get nine matching federal dollars for each state dollar spent, thus reducing the state's financial burden, our healthcare safety net's fraying edges and returning to Californians some of their hard-earned dollars. With Californians paying over $50 Billion more in taxes to the feds than we get back in services, this is one pretty inexpensive way to bring at least a few of those tax dollars home.
If you agree, it's time to act. We urge you to go to our site at: http://ga4.org/campaign/Fundingthehealthcaresafetynetnow and sign a letter to our state's leadership urging them to put these dollars to work. We've been working hard to get a $24 million dollar increase into the Medi-Cal reimbursement rate as part of the current budget negotiations. After 20 years of no increases at all, NOW IS THE TIME. We are at the critical point in these negotiations when we must TAKE ACTION and INSIST that our state leaders---from the Governor to the President Pro Tempore of the Senate, Don Perata and Speaker of the Assembly, Fabian Nunez,---listen to us and help the state's healthcare safety net providers care for the hundreds of thousands of people they serve---and have to turn away because they don't have the financial resources to provide clinical care to those seeking it.
This is a solution that works. It's time to bring those tax dollars back to California. The need is great and the opportunity is NOW. Easy solutions are hard to come by these days. Let's not let them drop the ball on this one.
Help us help them make it happen.
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Posted by Hannah-Beth Jackson - Comments (0)
Where is the governor's moral compass?
May 16, 2007
When I first arrived in Sacramento to begin my legislative career, I was told straight out that the most important votes I would cast each year would be on the budget.
I was reminded that the budget is the state's moral document; it reflects the priorities of the state to the neediest among us, to the future and to our vision of who we are as a people. It should be fair and responsible. It is a document that reflects our compassion, our sense of purpose and our values.
So here we are in 2007, with a budget that leaks red ink because of structural deficits (that means because we're required to spend certain amounts for various programs, etc. that cost more than we bring in). We've had these structural problems for years---as we load more and more requirements onto government but refuse to increase income to pay for them.
Our Governor says we should sell off some of these programs to bring in one-time dollars (and then let the private sector run amock without accountability or commitment to serving the public, just their profits). He also says we should pay back Wall Street instead of making sure that the kids on Main Street have food and shelter to help them grow and live with basic human dignity. He says we can't ask the wealthy for more, or close tax loopholes for bloated multi-national corporations that take our services but won't pay for them. Instead, we'll just ignore the blind, the elderly, the disabled and children of the poor and cut their already puny "aid". After all, why should those with so much be asked to share even a small amount with those who have so little? Why should corporations that make millions off of Californians and the freeways and infrastructure we've created for their use have to compensate the state for the benefits that come to them as a result?
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Posted by Hannah-Beth Jackson - Comments (2)
a project of the Institute for the Renewal of the California Dream
