Thursday, November 11, 2010

Budget Crisis to damage schools- again

The state  has a budget crisis again this year- the third year in a row.  As a result, the schools will again have a budget crisis.
California faces chronic challenges – an outdated tax system and a two-thirds vote requirement for passing  any tax increase Recent tax cuts  result in  that the state  not  bringing  in enough revenue to support its schools, universities and other public services.

The  current economic crisis that began in 2007 has made matters worse. This crisis was created by finance capital and banking, mostly on Wall Street ie. Chase Banks, Bank of America, AIG, and others.   Finance capital produced a $ 2 trillion bailout of the financial industry, the doubling of U.S. unemployment rate and the loss of 2 million manufacturing jobs in 2008. The crisis took over 12 Trillion $ from the economy.   Fifteen million people are out of work.  You and I, and college students did not create this crisis.  Finance capital stole the future of many young people.

Falling home prices and lagging earnings have pushed revenues down while, at the same time, an increase in need for  public services – including food stamps,  Healthy Families and more. As prison costs took more and more of the state budget, the state has increased its tuition for students in the CSU by over 240 % in the last eight years and a parallel amount in the U.C.s - far beyond inflation.

Passage of Proposition 25 on the November ballot made it easier to pass a budget by removing the 2/3 requirement for passing the budget, but it did not effect the 2/3 requirement to raise taxes.
Proposition 22 prevents the state from borrowing transportation funds for the general fund, as was done to balance prior budgets.  The failure of  Proposition 24 leaves untouched a series of large corporate tax breaks passed in 2008 to gain a budget passage vote that year.  Proposition 26 reverses the earlier practice of  taking money from the fuel tax to assist the state budget.
Prior budgets were passed with the significant assistance of federal stimulus money under the ARRAct.  These funds provided money to hire teaches, nurses, police and firefighters and helped to fund the state Medical system.  The victory of conservative Republicans in much of the nation- but not in California- means that federal stimulus money is unlikely in the next couple of years.  This lack of stimulus will cost more jobs at the state and local levels- including at least 15,000 teachers.
The legislature and the governor are entering a mean season.

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