I appreciate that California is in a deep, deep budget hole, and with a $42 billion deficit and the state running out of cash, any budget solution will be ugly: cuts, taxes, and borrowing to make the budget balance.
And the this year’s budget framework, even after $16 billion in cuts in previous years, is reported to have such a mix: $15 billion in spending reductions, $14.4 billion in new and increased taxes, and $12 billion in borrowing.
But there are elements of the proposal that make it far worse than it needs to be:
* It makes cuts and raises revenues, but the cuts are permanent, while the taxes are temporary.
* It contains an artificial cap on spending that would force cuts in future years.
* It contains roll-backs in worker and environmental protections
And at the same time we are cutting health, education and other services, the proposal includes hundreds of millions of dollars in tax breaks for corporations! In trying to deal with a budget deficit that was created by tax giveaways in past years, the solution is to pass additional tax giveaways.
Where does this all end us up in five+ years?
* California will have made billions in cuts, on top of billions in cuts already made.
* California will have permanent tax cuts that rob money from the general fund, forcing additional cuts to health, education, and other vital services.
* California will see the temporary taxes expire, creating budget pressure to force even further cuts to these services.
* Even without the lost revenue, the spending cap will make sure that services–especially health, which rises at a greater rate than inflation–will be forced to cut existing programs and services, continually, into the future.
The details of the deal matter, and we believe we have some, and we are still getting more of them. But there are multiple mechanisms to force cuts in future years–and health care is particularly vulnerable.
But for those who care about the state of our health care system, the outline is bleak. And far bleaker than it should be.