It just gets worse.
Letting a few days pass to let the dust settle on the budget approved by legislators last week and then signed into law by Gov. Jerry Brown hasn't cleared the air. If anything, the budget just raises more questions and will require significant changes.
Let us count the ways:
The spending plan contained a trailing bill that seems to have been written by teachers' unions. The bill essentially tells local school districts they have to relinquish control of their own finances by forbidding them to enact any more teacher layoffs or from cutting any programs.
Nobody wants to lay off more teachers or cut more school programs. But Assembly Bill 114 is built on a false premise and represents a shocking reversal of Brown's earlier pledge to return decision-making authority to local districts.
The "rosy scenario" budget adopted last week counts on revenues that have little chance of materializing, according to financial experts. If they don't, in January, districts will be faced with massive funding cuts. And the only way they'll be able to survive these, since they won't be able to lay off teachers or cut spending now, will be to reduce the school calendar by seven days.
It goes almost without saying that public employee unions are among the biggest financial backers for Democrats and Brown.
Brown and his fellow Democrats balanced the budget largely by hoping California's general fund will collect about $12 billion more in tax revenue than the state previously believed. If the money doesn't arrive, that will trigger spending cuts that would shorten the number of days public schools are in session.
Economists are saying it's a good thing Brown and Democratic legislators built in the automatic spending cuts, since California is likely to remain in recessionary doldrums for the short-term future. Unemployment remains high, the housing bust continues to drive down spending and net worth, and the recent uptick in income tax revenues may not be sustainable.
California has long been dependent on income taxes paid by its wealthiest residents -- which has contributed to financial volatility as the economy changes.
With the economy stuck in neutral, at best, it's exceedingly optimistic to believe the wealthiest Californians will continue to see their incomes growing.
But the wealthy probably aren't that worried. That leaves the rest of us. Families trying to send their kids to college are already hearing that both UC and CSU will have to raise tuition. Again. That's because both will have to pare another $250 million from their budgets -- on top of $500 million in cuts both systems have already been dealing with. And the "trigger" also could be pulled against higher education if the revenues don't come in as the governor and legislators are hoping, leading to even higher tuition hikes.
Community colleges have already pushed up per unit costs to $36 starting this fall after budget cuts. The cost of going to a community college -- traditionally the higher-ed choice of the less well-off -- was already up 77 percent between 1999 and 2009, while median family incomes rose only 5 percent. The trigger could be squeezed against community colleges as well in six months -- and costs could go up to $46 a unit.
The budget assumes the state will be able to divert money from local redevelopment agencies, which are essentially out of business under legislation signed last week. But redevelopment groups are vying to take their case to the highest courts, because, they say, the money grab is usurping local control in violation of state law.
The budget also assumes online retailers such as Amazon.com will start collecting sales taxes. But on Day One, they didn't. Instead, the Internet companies cut ties with in-state affiliates, which they believe exempts them from collecting from California consumers.
Of course, since Brown was unable to negotiate a deal with Republicans to extend existing hikes in sales and car taxes, consumers will save money under the budget plan. Both went down Friday.
Truth is, however, people will be paying for this budget deal in countless other ways.
0 comments:
Post a Comment