Thursday, December 15, 2011

Trigger cuts are budget cuts

Governor Brown, pulled the budget "trigger" Tuesday on a series of "Tier 1" and some "Tier 2" cuts, for a total of around $1 billion additional cuts for the year.
The CSU and the U.C.  will  each be cut by an additional $100 million after state revenue’s failed to reach projections included in the June budget deal. The Trigger  cuts will cost $248 million additional in state aid for public school transportation, but avoided  more severe cuts to k-12 education including reduction in days of schooling.  
The trigger cuts also include $100 million in services to the developmentally disabled, and $100 million to home care, and $15 million in Medi-Cal provider rates.
Brown and  the  Democrats in the Legislature had hoped for a $4 billion increase in tax revenue through the current fiscal year. The budget they passed last summer, was based on a combination of spending cuts, fee hikes and optimistic revenue projections.  

Republicans opposed any efforts to raise taxes or other revenues and thus forced these  mid year cuts. In spite of their minority status in the legislature,  the Republicans won the budget battle of 2011.  They got a cut in the sales tax by 1 %, and a cut in the vehicle license fee.  The result were  further cuts in the Univ. of California, further cuts in the California State University system, and further cuts ( called deferrals) in the K-12 schools.  These cuts led  to a increase in tuition at the CSU and the U.C.
California is presently 47th. out of the 50 states in per pupil expenditures, we are among the very poorest  in funding our schools.  In prior years, as described by the California Budget project, “Lawmakers cut the overall annual funding level for K-12 public schools by $6.3 billion, from $50.3 billion in 2007-08 to $44.1 billion in 2009-10.3
Are we broke?  No.  What  we lack is the political will on the part of Congress and the Legislature to solve our deficit problem by taxing those who have wealth  rather than sacrificing the well being of those who have not.  That may be a kind of deficit but it is political, not financial.  See the report on Corporate Tax dodges by Citizens for Tax Justice in the post below.
These  additional cut to the CSU and the U.C.  comes on top of $650 million in cuts enacted earlier this year.
Following Tuesday’s announcement, CFA President Lillian Taiz issued the following statement:
“Today’s $100 million cut to the California State University system is just the latest in a long series of blows to our public colleges and universities and serves to further undermine the ability of CSU faculty and staff to deliver the quality higher education so crucial to our state's economic recovery and global competitiveness.
Our state’s economic problems have taken a terrible toll on all of the services that are critical to a healthy and prosperous state. We believe the time has come for an honest and fair effort to put the state’s fiscal house in order. That effort must include new revenue.
We welcome serious efforts finally to address our state’s problems with revenues; as a state we must pay for the institutions and programs that make California great.”
Rather than continue this cuts only budgets,  California needs to put teachers, firefighters, nurses, police back to work and stop cutting these jobs.  Then, they will buy groceries, gasoline, pay rent, buy houses, and create private sector jobs.  It is called demand.  You can’t cut your way out of the recession. Cutting jobs makes the recession worse. Just look at the current situation of Ireland, Greece, Italy  and Great Britain. You can see what a budget cut approach produces- stagnation.

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