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Why 1 Green voted `No'

By Jan Arnold

My general approach is "tax and spend." Tax those with more money than others, and spend what we should to provide for health, education, welfare, the environment.

The package the Duopoly proposed was really terrible from the point of view of further cutting spending in areas where the spending has already been inadequate for years, failing to tax those who have plenty of money, and failing to start spending for future-focused environmental and energy needs.

A very useful source for ongoing analysis of the many issues is the California Budget Project. The gap between the business-as-usual expenditures and the business-as-usual revenue has been growing. (Currently the budget gap in California is the largest as a percentage of the General Fund of any state in the US.)

In recent years various one-time accounting tricks, pieces of luck, borrowing, deferring necessary work, and other such gimmicks have been used to stumble from one near-calamity to another.This failure of our elected leaders to tell the truth and deal with the real problems has been pointed out by many commentators.

Proposition 1A proposed a spending cap. This has been proposed and voted down in the past. If a spending cap had been enacted in 1995-96, we would have had to cut about $40 billion in spending in 2006-07, 2007-08, and 2008-09.

The official ballot summary said 1A "strictly limits state spending and mandates a bigger rainy day fund -- forcing politicians to save more in good years to prevent tax increases and cuts to schools, public safety and other vital services in bad years."

This statement gave the misleading impression that state revenue and state spending have been just fine except for this current crisis this year, and all we have to do is return to the good old days (of the dot-com bubble, the stock market bubble, or the housing bubble, all of which temporarily raised state tax revenues.

But there were many problems with the business-as-usual expenditures even before the current round of cuts. I'll start with the topic that is most valued by the average voter, K-14 education.

Voters approved Prop 98 in 1988 to assure the proportion of funds spent on the schools (40percent of the General Fund) stays at the same inadequate level it was then, rather than continuing to lose not only by comparison with what would be needed for a good school system, but in comparison to other budget items. Prop 1B proposes changes to Prop 98. (That's why Greens opposed 1B).

Another major part of the budget is welfare, including aid to the disabled, blind, and aged low-income people of California. The Federal SSI program has a built-in cost-of-living adjustment annually, as does Social Security. Many states, including California, supplement the Federal SSI grant with a "state supplement."

By failing to increase the SSP (that is, passing along the Federal increase but freezing the SSP), or even by reducing it so that the check received by the beneficiary does not go up (the reduction "swallows" the Federal increase), the earning power of this safety-net program decreases over time.

Using June 1990 as 100, the purchasing power of SSI/SSP in California has fallen to about 80, and the current proposals would reduce it still further. It bears repeating that all of this reduction is due to California's cuts over the years, as the Federal share has continued to rise. (source; CPB)

Aid to low-income families with children, now called Cal-Works, has declined in that same period to about 70 percent of its value in 1990, and the proposed cuts now will reduce that to 50 percent. (source: CPB)

Because the 1996 "welfare reform" law limits the time adults can remain on welfare, currently almost 80 percent of the people on Cal-Works are children. Another large item in the budget is health care. MediCal is the Federal/State program providing some health care for some, but not all low-income Californians.

As of December 2007, California spent $5695 per recipient on each MediCal enrollee, less than Mississippi, less than Georgia, less than Alabama, far less than the national average of $7534, and, although this is hard to believe, less than ANY OTHER STATE.

About ten states spent more than $10,000 per enrollee. (Source; CPB)

Then there are the prisons, currently overcrowded to the point where even the courts are demanding a reduction in the number of incarcerated people. We support reducing the prison budget and releasing enough of the currently imprisoned to relieve the overcrowding. (Of course we also insist on state funding for community support for the people released.)

Corrections (and rehabilitation) spending has grown at nearly four times the rate of General Fund spending as a whole since 1980-81. General fund spending is up by 381 percent and corrections and rehabilitation spending is up by 1491 percent (source; CPB) This cruel and disgraceful trend in California's history should be reversed.

So, what should the Green Party recommend regarding the "spending" part of the budget?(Our Platform has many excellent suggestions.) And where should the tax revenue come from to pay for all that?

Republican rhetoric about "everyone having to sacrifice" suggests that those who already are unable to afford adequate food, shelter, health care, and education should give up still more, such as dental care, so that millionaires and multi-millionaires don't have to pay more, although the rich can pay more with no actual deprivation resulting.

As (the late) Peter Camejo pointed out during his campaigns for Governor (2002, 2003, 2006), the lowest-income households pay the largest share of their income in state and local taxes.

"Corporate income taxes have declined over time as a share of General Fund revenues and as a share of corporate profits.

If corporations had paid the same share of their profits in corporate taxes in 2006 as they did in 1981, corporate tax collections would have been $8.4 billion higher."

The yield of the state's sales tax has declined over time, reflecting the shift in economic activity from goods to services and the rise of Internet and mail-order sales that escape taxation.

"If taxable purchases accounted for the same share of personal income in 2007-08 as they did in 1966-67, the state would have collected an additional $16.4 billion in sales tax revenue." (Source; CPB.)

While there are some states which require a "supermajority" (that is, more than a simple majority) to pass their budget, and some states that require a supermajority to raise any state taxes, California is the only state to require both. That situation allows the most parsimonious anti-tax legislators (that is, the Republicans) to dictate terms although they are in the minority in the Legislature.

Despite rhetoric about how everyone will have to sacrifice, everyone is not equally able to pay higher taxes while still being able to meet their basic needs.

During the period 1995 to 2006, the taxpayers in the top 15 percent of the state's income distribution have had their income double, while the bottom four-fifths saw their income increase between 8.55 and 10.8 percent.

The wealthiest 1 percent could easily afford to pay higher taxes while the vast majority would suffer far more hardship if they had to do so.

Measures 1B, 1C, 1D, and 1E are orders by those who think they are our leaders (the legislature) to drop our silly and childish opinions about what the holes are in the budget.

Therefore I recommended voting NO on those Propositions (on May 19).