10,000 Voices Say Gov’s Budget Fails Californians

Posted on 07 May 2010

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By Nancy Berlin

With less than a week until Governor Schwarzenegger unveils his revised May budget, there’s little hope that California’s struggling economy will see any reprieve from the threat of draconian cuts to vital services and unnecessary and wasteful corporate giveaways. This much has already been forecasted in the Governor and fellow Republicans’ incessant claims that California’s multi-billion dollar budget deficit can only be reigned in through sacrifice (read cuts!). But who are the ones really making the sacrifice? And what’s really at stake?

We at the Health and Human Services Network of California have a pretty good idea what the Governor and Republican leaders mean when they say that we’ll have to make “certain sacrifices” in order to close the $20 billion plus state budget gap. The HHS Network is approaching its milestone to generate more than 10,000 letters to state leaders before the Governor announces his revised budget.

In this time, we’ve seen 10,000 different reasons why the proposals to slash billions of dollars from California’s vital health and human services unfairly and disproportionately forces the sacrifice on those most vulnerable Californians: our seniors, our low-income children, our out-of-work families, our people with disabilities, our battered women, our students and our communities.

But if that wasn’t bad enough – the Governor’s plan would effectively eliminate hundreds of thousands of jobs at a time when double-digit unemployment rates continue to plague the state. It’s been clearly documented that, for every billion dollars in spending cuts to essential programs like In-Home Supportive Services (IHSS), Healthy Families, Medi-Cal and Cal-Works, hundreds of thousands of jobs are literally thrown away. For instance, $1 billion in cuts to IHSS alone would cost the state an astounding 215,000 jobs.[i] Likewise, similar cuts to Healthy Families and Medi-Cal would eliminate more than 70,000 additional jobs.[ii]

On the contrary, investments in these and other health and human services programs bring exponentially more revenues to California in the form of state and local tax revenues -- on top of billions in Federal matching funds. Not only do investments in these programs bring revenues to California – but they also play a critical role in fostering job growth as well as providing the much-needed services that many Californians need for when and where jobs are hard to come by.

At the very least, more than 10,000 of the Californians who participated in the HHS Network’s recent effort strongly disagree that now is the time to eliminate thousands of jobs – and for good reason. Take, for instance, Madisen, who also recently traveled to Sacramento for California Partnership’s April Action days. Madisen has worked in the non-profit sector for years. But when previous budget cuts forced several community organizations and non-profits to downsize their staff in order to survive, Madisen was left without a source of income to make ends meet. Her letter is a heart-felt plea to her Assemblymember to pass a Family Recovery Budget that will help create and maintain more jobs – so she, and others in her position, can get back on their feet. As unemployment rates across the state remain at a staggering 12.6% (March 2010 figures), thousands like Madisen are looking to Sacramento to alleviate their troubles – not aggravate them with senseless cuts that fail to make sense even on paper.

These 10,000 letters represent 10,000 reasons why proposals to implement massive scale-backs to, and in some cases the elimination of, vital services is outrageous, unthinkable and economically untenable given the current economic crisis. But these 10,000 voices are just the tip of the ice-burg. All throughout the state, nearly 2.3 million Californians are currently out of work. How much higher does this number have to grow before leaders in Sacramento realize that California cannot afford to close the budget gap at the expense of our jobs?

That’s why, when the Governor announces his revised budget, the Health and Human Services Network of California and its partners and allies will be in the Capitol delivering thousands of letters to state leaders showing them that closing the budget at the expense of our jobs and the health and human services safety net is not only unfathomable, but unequivocally disastrous for our state’s economic resuscitation.

If you’d like to see more stories of the individuals who helped us in this campaign, please visit the HHS Network CA Youtube Channel.


Nancy Berlin is Director of California Partnership and can be reached at nberlin@communitychange.org. California Partnership is a statewide coalition of community-based groups, organizing and advocating for the programs and policies that reduce and end poverty. We are spear-heading exciting campaigns to develop electoral power in low-income communities, give a voice to local communities in creating a more just state budget and building a movement for healthcare for everyone. For more information, please visit www.california-partnership.org


[i] Jacobs, K. (March 2010) Budget Solutions and Jobs. University of
California, Berkeley Center for labor Research and Economy, pp. 2.

[ii] Ibid.

The disabled and elderly are being treated like discarted garbage in this state. There should be a division between those that are able bodied and those that have worked, paid taxes and now either so disabled or too old, they can no longer earn a living.

Living on $800 a month in this state is almost impossible. Rents, utilities, food and transportation costs continually rise yet the incomes to these people have been drastically cut! What can people do? How can we change this very unfair system where the fat cats get fatter and the poor get the shaft?

Maybe if politicians were forced to walk in our shoes instead of driving fancy cars, eating caviar and smoking imported cigars, they might learn a few things.

The poverty in this country is outrageous. Soon more and more will be homeless. If we vote these jerks out of office, who will replace them? More of the same? We need regular people who can understand the needs of the population. The greed is overwhelming with our elected officials.

The sad thing is that I and many others have taken the time to write to those in office and to never receive even a canned reply! Evidentally it all goes into that circular file!

Unfortunately, many people have lost sight of the the distinction between investing and spending.

They also don't seem to understand words they use like 'exponentially.'

On the contrary, investments in these and other health and human services programs bring exponentially more revenues to California in the form of state and local tax revenues -- on top of billions in Federal matching funds.

Look, you are certainly entitled to your own opinion. What you are not entitled to is your own definition of words.

It would also help if you looked at reality. Government jobs do not and CAN NOT provide more income to the state than the state pays the worker - and in fact a good deal less. Government is an OVERHEAD expense, not a profit center. Please, don't give me that economic multiplier business. It doesn't work for government jobs. It's like the second law of thermodynamics says you can't have any perpetual motion machines and you will never be able to actually lift yourself by your own bootstraps.

The unfortunate fact is that our lame-duck governor is caught in a trap not of his own making. That's not to say he isn't stupid enough to cause problems - he certainly is - but the trouble he - and the state itself - is in right now has been a long time coming. I won't say the Republicans have no blame in this. The Repub party in this state is pathetic and the vast majority of their politicians egotistical and self-serving. They are, in fact, the second worst party in this state, and not by that great a margin either considering what total losers the Democratic politicians are.

But the problem, you see, is a long standing one, and since the Dems have had the majority in the Legislature where laws are made and budgets are decided they pretty much own it. The California State Legislature currently has a Democratic majority, with the Senate consisting of 25 Democrats, 13 Republicans, and 2 vacancies; and the Assembly having 49 Democrats, 29 Republicans, 1 Independent, and 1 vacancy. Except for the period from 1995 to 1996, the Assembly has been in Democratic hands since the 1970 election (even while the governor's office has gone back and forth between Republicans and Democrats). The Senate has been in Democratic hands continuously since 1970.

Ever since 1849 the state constitution has had a prohibition against deficit spending. It has largely been ignored by the legislature and the governor. They 'budget' based upon estimates they know to be wildly optimistic, then do accounting gimmicks to cover the shortfall or sell General Obligation Bonds to be paid off by future revenues. In the last ten years the budget (adjusted for inflation) has doubled. During the Governator's tenure alone it has gone up 40%. Eventually all of the gimmicks have been used up and it is now the time to pay the piper. The funny thing is that if the recession doesn't kill us, the recovery will.

Right now we have a huge pile of IOUs from all these previous decades of 'investment' coming due. Because the entire world KNOWS we have been cooking the books, we are paying rather exorbitant interest rates on these IOUs because they are rated so poorly. Whereas 10 year treasuries have to pay a taxable 3% interest (or less) we are currently paying a tax-free 7.5% to get people to buy our general obligation bonds.

That money HAS to be paid before a dime can go to anything other than schools. So since we don't have the money to actually pay off THE "INVESTMENTS" WE MADE YEARS AGO, we need to roll over these old bonds - we need to sell new bonds to pay off the old ones and to sell those we have to pay much higher income rates. We are like people with enormous credit card debt they can no longer keep up with. As we fall farther and farther behind our credit rating goes down more and more and we have to pay higher and higher finance rates.

So that's where the money is going. What's more, it's getting worse, because some of the OTHER accounting gimmicks we have used to deal with our past spending extravagances have been such things as underfunding our public employee pension fund liabilities (a recent study showed that the three biggest state employee pension funds will require about a half TRILLION dollars to make them well), over witholding on people's state income tax, and doing other things like shifting pay periods from one fiscal year to the next - accoun ting gimmicks that can only be done once.

So the sad fact, Ms Berlin, is that we are royally screwed. The money isn't there, and even draconian tax increases (on top of the draconian tax increases the US government itself must soon make) isn't going to help us. And when the recovery does come - if it comes - the US treasury is going to have to raise US Treasury rates monstrously to hold down inflation - which will drive our cost of credit even higher.

So send all the letters you want. Unfortunately, there isn't a damn thing the governor could do about the problem - even if it was his problem and not the legislatures.

Look at what's happening in Greece. California is not in any better shape financially. We are going to be going through the same trauma, and all sharing in the pain.