This State Budget is a Massive Corporate Boondoggle That Kicks California's Fiscal Future into a Ditch On The Side Of the Road
By Bill Lockyer
State of California
This budget doesn’t even kick the can down the road. Instead, it kicks California’s fiscal future into a ditch on the side of the road. It’s compromise in the worst sense: It compromises our ability to give our kids better schools, provide our families better health care and make our communities more livable. It’s the most irresponsible budget of the past half-century.
The plan contains several elements that constitute fiscal folly. But the most offensive provide multi-billion dollar handouts to big business in the form of permanent tax breaks. This giveaway makes the budget a massive corporate boondoggle that does nothing to fix our structural deficit and, in fact, will make it substantially worse.
The attempt to strengthen the rainy-day fund is commendable. But the reserve will be a mirage until the structural gap between revenues and expenditures is closed. This budget, by playing year-round Santa Claus to wealthy corporations, pushes that goal further into a dim future. There were alternative, more responsible ways to deal with taxes, ways that wouldn’t bust tomorrow’s budgets. The failure to pursue those options is disheartening and a disservice to the public.
The first tax break lets corporations, when they lose money in any given year, obtain refunds on taxes they paid in prior years. Businesses often suffer losses when the economy turns sour, just as California’s families do. When the economy’s bad, the resulting revenue decline also puts the State in a fiscal hole.
So under this budget, the State will be cutting refund checks for corporate behemoths while it’s cutting services for people. When fully implemented, this so-called “carry-back” provision – rejected many times by the Legislature – will cost the State more than $500 million, every year, forever.
From California Progress Report:
Today lawmakers are scheduled to vote on a "new deal" budget package that is just as disastrous for students, public schools, colleges, health care and other vital services as the “get out of town” budget they passed in the wee morning hours Tuesday.
Today's "new deal" budget package, like the earlier version, still does absolutely nothing to solve the state’s structural deficit, includes no ongoing revenues and puts everyone in California at risk. What's even worse is it still cuts $3 billion from public education and never restores those funds.
This "new deal" budget is still full of gimmicks that rely on borrowing from the lottery and future state revenues in order to close the $15 billion budget deficit, which sets our schools up for more funding shortfalls next year and undermines Prop. 98, the voter supported minimum school funding guarantee.
This "new deal" budget guarantees that the amount California spends on our students remains at the bottom nationwide.
Our students and schools deserve better.
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