In yesterday’s news conference, California Governor Jerry Brown pointed to schools around the state as being the targets to take a fiscal hit if voters don’t grant him the tax increases he asked for and are needed to close an unexpected $16 billion California Budget shortfall.
What’s interesting is that Governor Brown failed to mention prisons as targets for budget reductions in his talk on May 14th. Moreover, this budget actually ads more reductions to the $16 billion made for the 2011-2012 fiscal year. As Brown wrote in his adress to present the new budget
“The stark truth is that without some newtaxes, damaging cuts to schools, universities, public safety and our courts will only increase. That is why I will ask the voters to approve a temporary tax increase on the wealthy, a modest and temporary increase in the sales tax and to guarantee that the new revenues be spent only on education. I am also asking that the voters guarantee ongoing funding for local public safety programs. This ballot measure will not solve all of our fiscal problems, but it will stop further cuts to education and public safety and halt the trend of double‑digit tuition increases.”
The sad fact is that decades of California population growth have not been matched by necessary increases in tax revenues due to not just the passage of, but the failure to repeal or even challenge Proposition 13. It was “Prop 13,” passed in 1978, that erased a $3 billion California Budget surplus, and created the climate of seemingly constant annual deficits starting in 1998.
Indeed, the elimination of the California Redevelopment program was necessary to allow the State of California to claim property tax revenue it does not currently directly collect. (California’s primary source of revenue is the Personal Income Tax.) But that action will not result in a difference of any kind until 2013, and I contend it was robbing Peter to Pay Paul, as cities that had balanced their budgets with the help of Redevelopment, were suddenly plunged into deficits because of Brown’s actions in getting rid of it.
Now, in the wake of the largest American economic downturn since the Great Depression, California lacks the fiscal system required to gain money to meet budget obligations, hence Governor Brown’s presentation of yet another austerity plan.
The problem is structural: education spending makes up roughly 50 percent of all spending by California Government; it’s almost impossible to avoid some reduction in monies from that area – the problem is we’re already cut to the bone; any more reductions will make the state’s living conditions almost unbearable for many residents. This, really, is where another giant economic stimulus package would do wonders for the State’s recovery.
Have a look at the California Budget summary charts for yourself here:
http://www.ebudget.ca.gov/pdf/BudgetSummary/SummaryCharts.pdf
Stay tuned.
Bill Carroll