Tuesday, June 28, 2011

Brown Delivers a Republican Budget without Republicans

In any other year, the new budget plan supported by Governor Brown and the Democrats in the legislature would have been considered a major victory for fiscal conservatives. Not only does the budget reduce vital services by billions of dollars, but it does virtually nothing to increase future revenues. In fact, in the great tradition of Californian governors, Brown can only make his plan seem balanced by projecting wildly optimistic tax returns, and if $4 billion new dollars don't come in, another round of budget cuts will be triggered.

What I do not understand is why the progressive caucus in the legislature did not try to block the deal and put on the table progressive solutions. Perhaps our only hope is that Brown will work with unions to put progressive taxes on a special election ballot. Brown has even hinted that he might support modifying Prop 13.

In terms of the UC, the news is mixed. We did not get the full $1 billion cut, but more reductions will occur if the rosy tax revenue predictions do not come to fruition. Of course, the total cut of $650 million will justify a new round of tuition increases and a faster slide towards privatization.

Tuesday, June 21, 2011

The State of the State: A Progressive Solution

The current California budget conflict is unlike any other; not only has the governor vetoed an entire state budget for the first time in history, but it is unclear whether his own party knew that he was going to reject their complicated budget proposal. I personally find it hard to believe that the Democratic leadership did not know that the governor was going to veto their plan. After all, I predicted that the legislators would come up with some plan just to make sure they could meet their June 15th deadline in order to get their paychecks. I also know that the governor is dead set on having citizens vote on tax extensions, and he believes that he can get the four Republican votes he needs to put the taxes on the ballot; however, everything has become complicated by the new voting districts, which give the Democrats the hope that they can win a super-majority in the legislature, and therefore they may not need the Republicans at all in the future.

As I have previously written, all of the plans being discussed are bad, and if Brown decides to use the unions to fund a petition-gathering effort, the unions should insist that the current tax extensions be discarded, and a whole new set of progressive taxes must be presented. Not only would it be easier to pass a tax on the wealthiest Californians, but it would be more just and fair. Moreover, a tax on oil extraction to increase funding for higher education would also be a popular tax, and it is even worth the effort to put a majority vote for new revenue on the ballot.

The best possible strategy would be for Brown to pass a modified version of the budget he has just vetoed and then work with the unions to place progressive taxes on a special election ballot. Brown could also use the new projected tax revenue to reduce the state cuts to higher education and other needed public services. If the unions work together and present a united front to the governor, we can push for a progressive solution to help all Californians.

Friday, June 10, 2011

Jerry Brown’s Bad Budget Deal

It looks very possible that Governor Brown will get enough Republican votes next week to pass a state budget and put tax extensions on a special election ballot for September. The remaining stumbling block is the extension of the current taxes, which are set to expire July 1, and Brown wants them to continue until the special election. Here is why I think the whole budget deal is very bad:

1. Brown has basically endorsed the conservative argument that our state and national fiscal problems are due to governmental over-spending. While he is calling for a vote on the tax extensions, his budget relies on deep cuts to needed social programs coupled with a scaling back of pensions and an elimination of several state offices. In other words, he is endorsing the conservative push for austerity during a time when we need increased support for jobs and benefits.

2. It is possible that the voters will reject the tax extensions, and then we move to an all-cuts budget, which only an extreme right-wing proponent of government and taxes could support. Once again, it has taken a Democrat to fulfill Republican promises.

3. In order to push for the tax extensions, which place most of the burden on struggling middle-class and lower-class workers, unions and Democratic politicians will have to spend huge sums of money fighting for a very bad deal.

4. Even if the tax extensions do pass, they serve as a temporary fix, and they do not address the fundamental revenue problem of the state. Moreover, if the budget comes with a spending cap, the horrible cuts to social programs will be locked in.

The only solution is for the Democrats to simply refuse to sign onto any budget deal and to turn their attention to a special election to support real progressive solutions like the end of the rule requiring a super majority vote on taxes in the legislature.