The battle for California's future

[Hannah Bell]

James Illingworth explains how the budget crisis got so bad in California--and describes the development of a movement that is challenging the cuts.


How did things get so bad in California?

First, its economy was the most reliant on construction and financial services, two of the sectors hardest hit in this recession...

Second...key factor is the 1978 Proposition 13 ballot measure...For a decade, Republicans in Sacramento refused to raise taxes, forcing the majority Democrats to fund the state government through massive borrowing...

But the financial meltdown of late 2008 caused both a huge drop in state tax revenues and also the drying up of credit. Now, almost 5 percent of the state budget is dedicated to servicing California's massive debts... and it's projected to rise to more than $9 billion, or 6 percent of the budget, before the end of the 2010s.

From the beginning of the crisis, therefore, the state government consistently sought to make poor and working-class Californians pay the price...

****

Summary of some cuts & hikes imposed:

- July 2009: $15 billion in cuts...

- January 2010: another planned 5% cut for state workers, plus added 5% from checks toward pensions, plus privatization of those pensions...

- Schwartzenegger proposes to curtail seniority for teachers

- Targets Health & Human services for 8% cuts

- Proposes to eliminate in home care for elderly/disabled for 87% of recipients

- Proposes to eliminate public assistance for LEGAL immigrants

- Reduces the CalWORKS welfare payment e.g. from $723 for a two-parent family of three to $585

- $750 million cut to Medi-Cal (Medicaid)

- Raised university tuition 32% in November 2009

***

...the first sparks of a fightback appeared on university campuses...when the UC Regents met in November... to raise tuition by 32 percent... students and their allies occupied buildings at half a dozen schools across California.

THE SCALE of the November protests and the inspiration they gave to many rank-and-file workers in the public sector finally forced union leaderships to take the movement seriously...

One by one, during December and January, the teachers' unions endorsed the March 4 actions.... this development demonstrated the depth of anger among union members and showed how a radicalized and mobilized membership could shift the direction of labor officials...

In early January, Schwarzenegger...stated that California "can no longer afford to cut higher education." Hours later, the governor's chief of staff CALLED THE CAMPUS PROTESTS THE "TIPPING POINT" IN PRODUCING THIS PARTIAL REPRIEVE FOR SCHOOLS.

In mid-February, a California state legislature committee responded to student and worker anger about UC spending priorities by announcing an audit of the entire system.

But simply demanding more money from Sacramento isn't enough.

The movement is also calling for the democratization of education--an end to the system where political appointees and bureaucrats, many with an ideological predisposition to privatization, make decisions that affect millions of students, workers and teachers.

We need to stand up against charter schools and all other attempts to introduce market relations into our basic social services.

Meanwhile, activists' demands have gone on to focus on a radical change in the distribution of wealth in California:

Today, working-class Californians pay a higher share of their income in taxes than some of the wealthiest individuals and corporations in the state.

Many profitable companies actually pay no state taxes at all--overall, the share of state taxes paid by corporations in California has shrunk to about 7 percent.

Many activists are also demanding an end to regressive taxation and the repeal of Proposition 13.

The Obama administration's decision to call a three-year freeze on non-military spending is a signal of the austerity measures that lie in wait for students and workers everywhere.

No matter how inspiring they are, the March 4 Day of Action won't be enough to stop the cuts by itself. This is a long-term struggle, and the movement needs to prepare for that.

http://socialistworker.org/2010/02/26/battle-for-californias-future


There are 47 billionaires in the Bay area alone, & 101 in the state:

47 Bay Area billionaires on Forbes list

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/03/06/BUS1VEBPS.DTL


One is Larry Ellison:

Billionaire Larry Ellison raked in a fiscal 2008 pay package valued at $84.6 million for his work as Oracle Corp.'s chief executive officer and topped it off with nearly $544 million more from cashing in stock options that he has accumulated during his 31 years at the business-software maker.
= $628.6 million

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/08/21/BUA212F6M8.DTL


In 2008 he petitioned for & got a property tax break:

Larry Ellison, ranked 12th on the Forbes 500 list with a net worth of $25 billion, has bagged a $3 million tax break after arguing that his flamboyant Japanese-style estate in Woodside is functionally obsolete.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/03/27/MNUAVQUK2.DTL&type=business


Larry's only taking $1 in salary this year: that also reduces his taxes. The stock options he can cash in whenever the tax breaks & stock price make it convenient. i.e. he might not pay any income taxes in california this year. though he owns 1/4 of oracle.

http://news.cnet.com/8301-1001_3-10315648-92.html

[jody]

1. With the growing loss of high-tech jobs to the economy and out-sourcing when it recovers is it

likely that CA will ever recover to the economic highs it enjoyed in the last half of the 20th century?

The massive retiree debt to CA public employees led by high salaries in public safety in the $150k/year range and possible retirement at age 50 with 90% of salary as retirement seems like a very large burden on the private sector.

I know of two major restaurant chains that will not open in CA because of unfavorable business climate. Toyota is closing a plant in CA and opening a new one in MS.

Overall it seems unlikely that CA will recover anytime soon.

[Odin2005]

2. We need this in MN in order to get the idiots in St. Paul to override Timmy's veto.

[Johonny]

3. Both Rethugs are running on saving Prop 13

It's the backbone of California according to them.