California meltdown

A (bi-)weekly flyover of the state budget crisis

Does anyone know what to do with yet another state budget deficit, this one pegged at $20.7 billion? Some liberals say they do, but their solution is the T-word: taxes. Maybe it’s T-time.

Nov. 22: The San Francisco Chronicle reports that recent budget projects could compel California lawmakers to revisit earlier proposals to cut funding for Healthy Families and other state programs, such as HIV/AIDS services and coverage for dialysis, breast- and cervical-cancer services under Medi-Cal.

Nov. 24: The Sacramento Bee reports that debt service could consume as much as 10 percent of the state’s revenues, up from 6.7 percent this year. The percentage increase is due to earlier voter approval of bond measures and declining revenues.

Nov. 24: Calling the state’s colleges and universities “the driving force behind the California economy,” Assemblyman Albert Torrico, writing in the online California Progress Report, reveals that he has asked the Legislature to fast-track his bill, AB 656, that would raise more than $1.3 billion for higher education by enacting an oil and natural-gas severance fee.

Dec. 1: The Sacramento Bee reports, via its “State Worker” blog, that the California Faculty Association, which represents California State University teachers, has released a white paper blasting the system’s leadership for “a ‘restructuring’ of the CSU that goes far beyond ‘belt-tightening’ in hard times and is, in fact, a radical change in the mission of the system.” Specifically, the paper says, the changes “will have an especially negative impact on low-income people and people of color…”

Dec. 2: Sacramento Bee columnist Dan Walters reports that the liberal advocacy group California Tax Reform Association is proposing that the state solve its budget deficit by plucking the “low-hanging fruit” of tax changes. It lists 10 reforms that it says would raise $21.1 billion a year, including reinstating an 11 percent tax on the very rich (as existed when Pete Wilson was governor), an oil severance tax, increasing liquor and cigarette taxes, and closing new corporate tax loopholes created in February.

Dec. 3: The online California Progress Report publishes an article adapted from a recent policy brief put out by the Center for Responsible Lending forecasting that, contrary to recent news reports, the housing crisis in California “is far from over.” In particular, the report predicts, the state can expect to see “a second wave of foreclosures” in the Alt-A mortgage market, loans made to near-prime buyers.

Dec. 3: The San Jose Mercury News reports that low-income people with limited vision are feeling the impacts of the elimination of optical care and related services from Medi-Cal that went into effect July 1. The cut put vision care out of the reach of many of them, the article states, potentially making them more vulnerable to accidents and injuries.

Dec. 7: State lawmakers’ and top elected officials’ pay is docked 18 percent effective today, as ordered in May by the state’s independent compensation commission. The cut applies to benefits, as well.

Dec. 7: The heads of California’s college and university systems gather in the State Capitol to make the case for updating the state’s visionary 1960 Master Plan for Higher Education. “We don’t want to partially privatize [UC] by raising fees. And yet that is the direction we seem to be heading,” Mark Yudof, president of the University of California, tells lawmakers, according to the Sacramento Bee.