Thursday, February 19, 2009

California Has A Budget!

National attention may now turn to Obama's housing plan--more on that tomorrow--and The Stimulus. California's budget process is dysfunctional for one reason, the requirement that it be passed by a 2/3 majority. This means that the Democrats, who come very close to the 2/3, have to pick off a couple of Republicans to pass any budget that raises taxes. And California had to raise taxes (sorry, Krugman, the budget has to be balanced, at least to the limits of what we can borrow), as the dire economy has left the state with a $40 billion deficit. In fact, it may be even larger, as the continuing economic deterioration cuts tax income further.

But because the Democrats here are actually fairly wimpy (and a lot more centrist than the press admits), they didn't demand that the Republicans, if they really believed that the budget could be balanced without tax increases, present their budget proposal. The Republicans had all sorts of demands, including tax breaks, that they asserted would improve the business climate. The Democrats have acquiesced to these demands in the past, with no noticeable improvement in the business climate, so one would think that someone, somewhere, would ask for some evidence that they've worked in the past before allowing more business tax cuts. Alas, facts don't count for much when you need three votes.

What's interesting, of course, is that no one points out that the kinds of cuts agreed by the Democrats, since there wasn't much pork in the budget, are devastating the the poor, the sick, the elderly, the disabled. Those on SSI haven't received a cost of living increase for years, and aren't going to receive one at least until 2010. SSI barely pays enough to make the rent here, so I hope no one is surprised when homelessness among the disabled increases. California already pays doctors who take Medi-Cal (California's Medicaid program) less than any other state in the country, so the Legislature cut dental and optometric care for adult Medi-Cal recipients. Schools (which are largely funded at the state level since the California Supreme Court ruled that funding by local property taxes provided unequal education to lower-income communities) will take a major hit, as well.

California's biggest problem, aside from the 2/3 requirement for tax increases, is that it's the poster child for neoliberalism, with a relatively small percentage of high wage earners, and a sea of restaurant workers, nursing home aides, retail clerks and other workers with jobs that don't pay enough for people to meet their basic needs without government assistance. So the government has huge calls on its income, without the resources to meet the need. It's irritating that people who rattle on about the need for personal responsibility and accountability aren't willing to take responsibility for the economic system that they have promoted, and pay the costs of that system.

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