Schwarzenegger Threatens to Shut Down the State

Democrats in the California state assembly employed a series of legal maneuvers to push through a proposal to balance the state's $24 billion budget deficit without any Republican votes over the weekend.

The plan, which includes $11 billion worth of cuts and $10 billion worth of accounting maneuvers, is now in the state senate.

California Governor Arnold Schwarzenegger has threatened to veto the plan on principle, should it reach his desk, because it contains $2 billion worth of revenue solutions consisting of an oil severance tax and a tax on cigarettes, measures that Schwarzenegger himself had previously proposed.

If Schwarzenegger believes that it is possible to balance the state budget without these revenue solutions, as paltry as they are, then he just doesn't understand economics.

Should he actually follow through on his threat to veto the Democratic plan, blame for shutting down the state would rest squarely on his shoulders.

While Schwarzenegger has been prone to using threats, coercion, and other ham-fisted approaches to realize the vision of a state with no capacity to provide social or educational services to the citizens of California, it is unclear whether he actually has the courage to take the blame for shutting down the state.

With California just a few days away from having to issue IOUs to pay its bills, the only way to win this game of budget chicken and avert the prospect of California taking its place among the Third World, an outcome that corporatists like Schwarzenegger and the Republicans have been planning for decades, is for Democrats to concede nothing and place a budget on Schwarzenegger's desk that includes new revenues.

This will put Schwarzenegger into a position where he will either have to make good on his threats or look like a complete hypocrite. If past performance is any indication, he will find an excuse to sign it.

State Budget Update: A Fair & Balanced Approach?

The state legislature's budget conference committee recently unveiled its plan to close California's $24 billion budget deficit, but Arnold Schwarzenegger has already threatened to veto this plan, because it includes $2 billion worth of taxes on oil companies and tobacco companies.

Although conference committee members have attempted to moderate many of the draconian cuts proposed by Arnold Schwarzenegger in May, which included the complete elimination of Healthy Families, CalWORKs, Cal Grants and In-Home Supportive Services (IHSS), the conference committee's budget proposal still relies heavily on spending cuts to balance the budget.

Specifically, the budget conference committee is proposing:

• $11 billion worth of cuts to education, health, social, and other programs
• $10 billion worth of accounting maneuvers
• $2 billion worth of revenue solutions consisting of an oil severance tax and a tax on cigarettes.

While Child Care Providers United (CCPUnited) of California applauds the budget committee's decision to reject many of Schwarzenegger's most damaging proposals, CCPUnited feels that the committee must be more courageous in its pursuit of a fair and balanced approach.

We understand that the two-thirds budget rule makes it nigh impossible for Democrats to pass a budget containing any tax increases without Republican votes. However, $2 billion worth of revenue solutions in comparison to $11 billion worth of cuts can hardly be called balanced.

That is why we must continue to press the legislature and the governor by taking the following actions:

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Child Care Providers United of California Responds to Schwarzenegger's Budget Challenge

Arnold Schwarzenegger has invited Californians to try their hand at balancing the state's 2009-2010 budget by using an online tool provided by the Los Angeles Times.

By submitting to the limitations of the L.A. Times's budget tool and accepting the small range of options it serves up, Californians who wish to balance the state budget fairly and equitably would, by default, have to accept many of the spending cuts Schwarzenegger has already proposed in order to arrive at a balanced budget.

Child Care Providers United (CCPUnited) of California categorically rejects any cuts to education, human service, and health programs whose loss would negatively impact children and families who work for a living such as CalWorks and Healthy Families. CCPUnited also categorically rejects any and all tax breaks, tax credits, and subsidies that favor the wealthy and politically connected.

Nevertheless, CCPUnited of California has decided to participate in this exercise in order to show that revenues and only revenues will be able to right California's fast sinking ship of state.  Between $13.2 billion worth of new revenue solutions that polls show a majority of California voters support and $2.8 billion in cuts that fall largely on the state prison system, which polls also show a majority of voters favor, CCPUnited has managed to reduce the state's $24 billion deficit to just under $8 billion.

At this point in the experiment, it is apparent that it will be necessary to employ options that do not appear in the L.A. Times's interactive budget tool such as a carbon tax ($7.5 billion) and restoring the vehicle license fee (VLF) to 2% ($2 billion) in order to bring the remaining $8 billion shortfall in line with progressive values.

Read on for more details of our experiment using the L.A. Times's interactive budget tool:

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California State Budget Shortchanges Education and Child Care Again

A new study by the Pew Center on the States has found that a record-high seven million Americans is either in prison or on probation or parole.  That’s one out of every thirty-one adults.  This finding highlights how our society has been dramatically transformed over the last twenty-five years, as prison spending has surpassed funding for public education, transportation, and social services like child care.

When these facts are seen within the context of the various state budget crises that have wracked California over the same time period, it's easy to see that the root of our budget problems in the Golden State comes down to a misplaced sense of priorities as well as a lack of revenue.

This article explores the issue in greater detail and incorporates a discussion of the May 19 special election.