Governor Brown Slashes Schools and Social Services, But Not Corporate Tax Avoidance


Posted on 15 May 2012

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By Duane Campbell

The proposed California budget for next year says that income will be $15.7 billion less than available revenue.   

The report is here: http://www.dof.ca.gov/documents/2012-13_May_Revision.pdf

California does not have enough money to continue the funding of schools, universities, fire and safety, and social services. The Republican Party has consistently refused to raise taxes to pay for these services. So, the Republican legislature is forcing the following cuts: MediCal, child care, Cal Works, Nursing homes, In Home Supportive Services, Cal Grants ( college tuition), and a forced employee pay cuts (5%) – such as a 4 day work week. These cuts are from the 2012 budget.

Yesterday's May Revision provides level funding for k-12 schools, however if the  Governor’s tax proposals are not passed in November, there will be an additional $5.6 billion dollars  cut from  K-12 schools. These are called trigger cuts. They will be automatic if the  tax initiative is not passed.

These draconian cuts are imposed because the state will not- or can not – deal with corporate tax evasions. We know of $10 billion in tax evasions from Apple, and there probably is a similar tax evasion by Google, Yahoo, and other internet companies.

California is Not Broke, but corporate tax subsidies are destroying our schools.

We suffer from two problems: a huge concentration of income at the very top of the income distribution and a tax system that fails to tax that concentration. Our tax system asks those with less to pay more and those with more to pay less.

The state fell over $6 billion behind state forecasts for this year. Thus, the legislature  again faces cuts as proposed by the Governor today.  More cuts to schools, more cuts to social services, health care,  child support, police and fire protection.

This approach to economics is called austerity. It doesn’t work. Governor Brown cited Ireland, Greece, and Spain in his budget revision talk, but he continued the austerity policies that have ruined these economies. Austerity makes the economy worse – and thus further reductions of tax receipts and further cuts.

The economic crisis of 2007 to the present made matters worse. The state took in some $30 billion less in taxes and thus had less to send to the schools. School budgets have been cut by some $10 billion. K-12 education receives about 40% of the California budget. Thus any decline in the state budget leads directly to cuts in school services.

The question for the corporate agenda, promoted by  the Chamber of Commerce among others is can the economy prosper with a poorly educated work force. California grew and prospered from 1970- 1994 based upon a well educated work force. Then, in the 1994-2008 period over $10 billion of tax cuts were passed – making the current crisis much worse. Last  week we learned that Apple, and other corporations, are avoiding over $10 billion in taxes by moving one small office to Nevada. California suffers from a decade of corporate tax cuts and public disinvestment.

California public schools are in crisis- and they are getting worse. This is a direct result of massive budget cuts imposed by the legislature and the governor in the last four years.  Total per pupil expenditure is down by over $1,000 per student. The result- massive class size increases. Students are in often classes too large for learning. Supplementary services such as tutoring and art classes have been eliminated. Over 14,000 teachers have been dismissed, and thousands more face lay offs this week.

California schools are now 47th in the nation in per pupil expenditure and 49th in class size. Our low achievement scores on national tests reflect this severe underfunding.

California suffers from a decade of disinvestment in education and in infrastructure.  We need to invest in roads, bridges, telephone lines, communications systems, parks, clean energy and quality education. These are the down payments that make prosperity possible. The Republican Party is blocking all efforts to raise taxes ignoring the undeniable historic evidence that prosperity depends upon having a viable educational system and a well functioning infrastructure. And the Democrats in the legislature and the governor’s office are simply saying, “we must cut”, the Republicans make us do this.

We have a stalemate at the state and national level and this government dysfunction makes the current depression last longer. We will have an opportunity in November to slow  the decline, but not to reverse the policy. This depression will continue until we require the corporations to pay their share of taxes. Corporations benefit from our taxes.  They get roads, bridges, an educated work force, police and fire protection, etc.

As Supreme Court Justice Oliver Wendell Holmes said, "Taxes are what we pay for civilized society.''

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Duane Campbell is a Professor (emeritus) of Bilingual/Multicultural
Education at CSU-Sacramento and the Chair of  the Sacramento local of
Democratic Socialists of America.

Hey Duane,

you qualify for a state pension right? with unfunded mandates approaching $750 billion, money that you and your unions have extracted from the taxpayer and from other state programs, are you going to do something to fix that mess, or just complain that other people aren't paying enough taxes to fund 3% at 50 state retirees?

Yes, I qualify for a pension. I worked 38 years for the state and I get 2% per year. Of course, I contributed to that pension for all of the years. I don't know of anyone getting 3% at 50. Perhaps some high ranking police management. Who are these public employees who get pensions? The sanitation worker that picks up your garbage, the teachers who work in under funded schools, the scientists in the universities, the guard in a state park. Pensions actually help the economy to work. Read, End This Depression Now, by Paul Krugman.
One of the barriers to real pension reform is the kind of data you throw out. There are some problems with a very few people who spiked pensions. That should be dealt with. And with some politicians who have created a generous system for themselves. I am all for fixing the problems of abuse. But, that problem is small. And attacking all who get state pensions doesn't get at the problem.
What unfunded mandates are you talking about? I paid into PERS- the largest pension system in the nation. Often, in good times, the state did not even pay an employer contribution. And, PERS is a major investor in California.
All retirees should get pensions. Rather than trying to create jealousy against state workers, we should extend pensions to all. - that would help the economy.

I commend you on your efforts to educate the knuckle dragger trollers that continue to infest and infect this site with ignorant drivel. Sadly, facts are meaningless to the right...in fact, as studies of the conservative (although calling these people conservative is a stretch...because they don't live in the same reality with facts and data which notoriously have a left wing bias) brain indicate, they in large part seek out simplicity, fear, and blame...and the more facts you supply, the more hardened they become in their ignorance.

I have spent probably too much time trying to educate these troglodytes over the years, with fact after fact, study after study, and just plain common sense, compassion, empathy, and pragmatism...but they just keep coming back with the same Fox News, Limbaugh generated talking points.

You did your best...but some people aren't worth the time it takes to type a sentence...the key is reaching those that haven't lost their souls and minds to the Matrix yet. And there are many...more than enough to drown out the last angry cries and screams of the ignorant masses...like so many that comment here.

Hey Duane,

ALL public safety employees, cops, CHP, fire, prisons, and even dispatchers get 3% at 50...ALL OF THEM not just high ranks...but you know that already don't you.

My problem with your pension and all public pensions is that I am your guarantee of a happy retirement...but where is my guarantee??? When my 401K goes down I take a hit, when your pension fund goes down, I have to pay for that too. Is that fair? no it isn't.

CalPERS is about $200 billion underfunded. Thats what we the taxpayers owe you the public employees because of guarantees your unions extracted from our elected officials.

All public employees should be responsible for the unfunded liabilities of their pension funds, not the tax payers. If your fund does not perform you either get less or you pay in more. The guarantee means that there is little or no oversight and cronyism runs rampant...nobody cares if the real estate deals are risky or prudent if the taxpayer is the backstop...if the union is the backstop you can bet your ass those deals will be scrutinizes and all the closed door sweetheart dealmaking and skimming off the top will end in a jiffy.

If you don't like being stuck for paying Duane's pension than just leave. Ooops, apparently too many are figuring this out?

How are you missing simple connections? We the taxpayers are responsible because we are the employers. We have agreed as a part of the compensation for public employees that we will provide certain benefits. Good family supporting wages and benefits are the means by which we attract and retain good employees. That works in the private sector and the public sector.

It is sad that you feel because there are no guarantees for you there should not be guarantees for public employees. That is the response that favors the rich who want working people to fight amongst themselves. The answer is not to take away from public employees. The answer is to provide for you and others like you who do not have those guarantees. Join a union and negotiate better wages and benefits. Join a union and demand the leadership of that union engage in progressive politics that will lead to a restructuring of our society. Join a political party (not one of the major parties) that will fight for economic and social justice. Help yourself and others, don't take from others.

Some of the stuff you quote is, unfortunatley, completely false. Let me give you an example, LA has a very low per pupil expenditure according to the school board's reported budget. Or, do they? It turns out that LA did not include their capital budget since it was covered under a state mandated initiative. If you had included that than their expenditures were quite high. Other states incorporate their capital budget routinely. Thus, comparing California to other states is not an apple to apple comparison.

That is, in microcosm, the entire issue with California. All of the data is spun, twisted, and designed to deceive the voter. Education is "cut to the bone" yet the pay and benefits for California teachers are significantly higher than other states.

Of course, the same can be said about other state government employees, too. We don't significantly cut state employees wages or benefits and yet we rush to the voter and say "we have cut to the bone." The same voter who, by the way, is facing high unemployment and real benefit cuts. Is it any wonder that the voter says, "I can't afford anymore?"

There is a range of ways to count per pupil expenditures. You can use the NEA accounting, or ED Source, or even conservative columnists. A useful measure is that of the Calif. Dept. of Finance, and the California budget project. The range is California ranks between 27 and 49 in per pupil expenditures.
California's spending per pupil has dropped perceptively. And, California ranks about 47th. in class size. Some measures make it 49th. Your argument seems to be like those who deny global warming.
Rather than deal with the issue, you seem to want to pretend their is a debate about the numbers.
You can, of course, believe any numbers you wish. Best of luck with that.

I am attaching an article you can read if you want:

http://www.calwatchdog.com/2010/08/20/lausd-spends-30k-per-student/

The basic point of this article is that per capita spending per pupil in LA is approach $30K/pupil. How is this possible when LA purports to spend much less. This is because LA does not include capital budgets as part of the cost per pupil. I have been on schoolboards in other states and they include capital projects as they should. so, the real spending in LA is FAR, FAR above the national average.

I could go on, but this type of phantom accounting is at every layer of government spending in California. Thus, I do not believe the government when it says it has "cut to the bone." It just isn't true.

No one has shown proof the we really need that $15.7 billion. The public has no idea how education and all other departments now spend their money. It is just presumed that whatever they have asked for they really need. Education could save over $5 billion just by eliminating useless departments, like the 58 county offices of education. Similar waste could also be found in all other departments. The one good suggestion in Brown's plan is to cut public salaries and retirement.

I write that not merely to brag but to provide the provenance for the analogy I am about to use. This pro would use the term "cupcaking" to describe special details that were not normally contemplated by the standard rate per act structure that defined the economy of that particular vocation, and, to for the consumers, avocation. The customer was seeking and was paying for the basic service, nothing more was contemplated at the time of the transaction. Cupcaking referred to services not integral to the contract and, generally, they were services for which there would otherwise be a scant market.

Bear with me; I have a point.

Let's begin by agreeing that government is a necessary evil. It's easy, I can admit that government is necessary; you can admit that its role is to restrain individual liberty.

I think most people are willing to pay for some of the things which you mention, schools and police and fire for two. It gets a little more confusing when one discusses public universities or the nebulous term "social services". Most people are willing to pay for basic services. It's the cupcaking we don't believe should be on our tab. I'll posit that 90% of public employees are paid above market. You'll cry "Balderdash!" and point to myriad statistics, cross-sectional studies, etc. to prove me wrong. I'll respond that has never been tried. For example, I suggest we tell the prison guards that they can keep their jobs at 60% of current salary and benefits and if they don't show, they will be replaced, how many will show up? How about 2nd assistants to the diversity compliance monitor, I'll betcha that dude will show up for 40%. The bottom number of my paycheck is 58% of the top number. You can't convince me that cuts are being made to "vital" services when so much is being spent on services that are not "vital"

Done trolling, I've grown weary. I grew tired and my analogy went askew, but I did get to publicize that I was throwing freebies to a pro.