In his End this Depression Now!, Paul Krugman argues that the best way to get the U.S. economy out of its current slump is for the federal government to provide direct support to the states to stop the loss of public workers. Krugman and others have pointed out that while there has been an increase in private sector employment, there are about two million public sectors workers who have lost their jobs or about to lose their jobs. These job losses not only depress consumer demand, but they also hurt state revenues.
In the case of California, Governor Brown’s latest revised austerity budget calls for an additional reduction of the UC budget of $38 million with another $250 million cut if his tax initiative does not pass in November. In the best case scenario, the UC will receive $2.5 billion in state funds, and if the tax initiative does not pass, the figure goes down to $2.2 billion, which means we are down $1 billion from the funding level of 2007-8.
While some may say that we have faced bigger cuts in the past, what few people understand is that a lot of the past state reductions were replaced by federal stimulus money, which is now all gone. As I pointed out a couple of years ago, when the UC administration called for furloughs and layoffs, it often failed to mention that the state reductions were being replaced by federal dollars; however, now, the UC is really struggling with increased costs and decreased revenue, and tuition increases and out-of-state students can only fill part of the hole.
Recently, I have shown how we could fund free public higher education, and while this is a long-term goal, we have to also think about the short-term and the medium term. Right now, we are pushing to increase UC funding to stop tuition increases, but we will have to make our arguments during a time when the poor and the needy are facing tremendous cuts. One possible solution is for the UC to lend the state a large amount of money on the condition that the state increases UC funding. Another medium-term solution is to either push for a new initiative guaranteeing higher ed funding, like the one that that exists for K-14, or to tie a reduction of prison spending to an increase in higher ed funding (if we got rid of the three strike rule and we decriminalized drugs, we could free up money to be spent on our universities and colleges).
What should be clear is that the current political class is not proposing any comprehensive solutions, and instead, we are suffering from a thousand cuts. What we need to do is to organize around a set of propositions that would modernize our tax system and replace spending on incarceration with funding for instruction while controlling healthcare costs and improving the quality of public services. In short, we have to formulate a workable program that will inspire people to counter the agenda of the ruling class.