Tuesday, July 21, 2009

Schwarzenegger's Budget Plan

California legislators have recently reached an agreement with Governor Arnold Schwarzenegger on a tentative plan to close the state's $26 billion budget gap. Schwarzenegger's massive financial overhaul contains no broad-based taxation, instead opting for extensive budget cuts for social services such as children's healthcare, local government, the welfare program, public education and universities. In total, the new budget contains $15.6 billion in cuts. Also included in the cuts are large cutbacks for the prison system, reducing the number of inmates and laying off prison guards.

When do we get to say enough is enough to fiscal conservatism? Can we really expect to have a fair and just society, when the burden of budget cuts fall squarely on those who need it most? Year after year, Schwarzenegger has consistently cut funding for education and just about every other public service, yet he has also been unwilling to raise taxes in any significant way. The reduction of prison spending, including the early release of some prisoners is probably a positive (given the absurd statistics of incarceration in California) but the facts of other crucial cuts in spending are still troubling, to say the least. If this plan gains enough support, it will cut billions in spending for public schools and healthcare and shut down over two dozen state parks.

Don't get me wrong. Balancing the budget is no easy feat, and $26 billion is a lot of money (try this). But there seems to be a fundamental problem with the theory that cutting social services will be economically beneficial to the state: it lacks foresight. A healthy state economy is built upon healthy infrastructure, including good schools, hospitals and transportation. Depriving people of their equal opportunity to the tools necessary for success only serves to preserve the current economic hierarchy, causing economy to stagnate instead of growing. Is it unreasonable to consider significant tax increases in place of drastic cuts that undermine our potential for economic growth and cause such widespread suffering? Just a thought. Read up on the buget plan here.


1 comment:

  1. The budget can almost be balanced by adding all the tax increases listed in the LA Times gadget that appears under your "try this" if you add in sales tax from legalized marijuana sales in the state - assuming a modest decline in marijuana prices and a slightly larger increase in sales volume. This also assumes that current marijuana imports into California (from Mexico and Hawaii, primarily) are not greater than exports from California. If retail sales exceed local production, more sales tax revenue could come in. Many counties, such as LA, San Francisco and Alameda (Oakland, Hayward, Berkeley) would also benefit, outside the state budget, from more sales tax support for mass transit and some health programs. Add in reductions in salaries for University heads, and reduction in the number of political appointee positions on state comissions and the number of state legislators to completely close the gap - without accounting magic tricks.