Can we all agree?
Unlikely town-hall panel finds accord on state budget crisis
For Jolene Francis, president and CEO of the Chico Chamber of Commerce, participating in a “town hall meeting” sponsored by a group of liberals is a bit outside her comfort zone. But there she was last Thursday afternoon (March 11), the lone representative of the business community on a panel of service professionals talking about the state budget crisis.
All the more reason to be there, she said during a follow-up phone interview Tuesday (March 16): “It’s important that all views be heard.”
Those views, besides her own, were offered by Evan LeVang, director of Independent Living Services of Northern California, a nonprofit that advocates for disabled people; Les Jauron, vice president for planning and information at Butte College; and Eileen Schnitger, director of public policy for Women’s Health Specialists, a well-woman and reproductive-services nonprofit.
The large audience in Chico City Council chambers was made up primarily of service-agency clients, progressive activists and other liberal types. Four City Council members, Mayor Ann Schwab, Andy Holcombe, Mary Flynn and Larry Wahl, also attended.
The forum was sponsored by the Northern California State Budget Alliance, a group that favors finding new sources of revenues as a way to help solve the state’s budget crisis.
In many ways the most remarkable thing about the forum was that participants and audience members really listened to each other. And they seemed to come away with the understanding that the various sectors—education, health care and community services as well as business—were interdependent and needed each other to succeed and prosper.
For Francis, that meant understanding that “Successful business is the most basic component of a healthy society.” Businesses pay taxes and provide jobs to people who pay taxes that go for services, she explained. But business owners are struggling in this down economy, burdened by myriad regulations, rising health-care costs and having to compete for employees with the public sector, which pays 59 percent better, on average. As a result, they’re laying off workers.
For LeVang, it meant realizing that state cutbacks in funding for in-home care could result in the loss of as many as 2,000 jobs in Butte County—and the possibility that many disabled people could end up in nursing homes, at far more cost to the state. “Many elected officials see community services as expendable,” he said, when in fact they’re “as vital as roads and bridges, disaster relief and the military.”
For Jauron, community colleges are a primary way people train to obtain jobs and higher standards of living. When colleges’ budgets are slashed, it means fewer classes and cuts in student services even as enrollment is going up as the unemployed seek further education.
And for Schnitger, it meant realizing that it was up to the various groups to respond creatively to the challenge. “We are the experts,” she said.
Then, when moderator Sue Hilderbrand, the director of the Chico Peace and Justice Center, asked the panelists how the sectors could work together, LeVang replied that he agreed with Francis about the importance of jobs. “The disability sector has made many improvements in recent years,” he said, “except in employment. We still have 70 percent unemployment. … We need the business sector to be thriving because we need jobs.”
By the same token, Francis said, people in the private sector need the kinds of services LeVang’s group provides, as well as health care and education. She said she was well aware that nonprofits create jobs, citing the Work Training Center as an example.
Later, speaking by phone, Francis noted how frustrated voters are by lawmakers’ ineffectuality. “Both sides are so busy bashing each other they’re not paying attention to what needs to be done. That’s another good reason to be involved in that forum last week.”
The forum also featured two informational presentations. One was an overview of the state’s fiscal problems given by Frederica Shockley, who chairs the Economics Department at Chico State University. The other was a look at possible sources of new revenues from Lenny Goldberg, director of the California Tax Reform Association, a group that wants the state to fix its structural deficit with a combination of spending cuts and new taxes.
To boil down Shockley’s succinct analysis even more: The state is up a $20-billion deficit creek, and Gov. Schwarzenegger has hung his budget proposal on three difficult propositions: one, that the federal government will give the state $8 billion in subsidies; two, that the Legislature can cut $8 billion in programs, and, three, that the state can “borrow” $4 billion directly from local governments.
The first, she said, is beyond unlikely; the second is highly problematical, will result in the loss of billions of dollars in federal matching funds, and will cost thousands of jobs; and the third, while doable, will devastate cities and counties.
So the choice becomes: cut an additional $16 billion from a skin-and-bones budget or find new sources of revenues.
Enter Goldberg, carrying a list of 10 policies that could generate $20 billion by picking the “low-hanging fruit in the tax system.” Some involved new taxes, some closing tax loopholes, some improving tax collection.
“I have a hard job,” he said, “talking about and lobbying for taxes. … In our situation taxes are going to hurt, and cuts are going to hurt.”
California has been a high-tax state in the past, when it built all those universities and freeways and water systems, he said. But today there’s no consensus in Sacramento that we should be investing in the future.
But there are ways of getting money that have relatively light impacts: “For example, California is the only place in the world that doesn’t tax oil as it comes out of the ground,” he said. Even Sarah Palin believes in oil severance taxes, he added, but not California Republicans.
Another example: eliminate the $1.7 billion in corporate loopholes secretly passed as part of the February 2009 budget compromise. They don’t benefit anybody but a small number of corporations, he said.
Another idea: Collect a tax on Internet purchases, something legislators are seriously considering.
It’s important to remember, he said, that the taxes we pay always come back to us, in the form of schools, jobs, roads and services.