HEALTH ACCESS BUDGET CUTS UPDATE
Friday, July 12th, 2002
PRESS ITEMS OF INTEREST:
* A story generated by the Thursday press event in Fresno.
* A well-placed op-ed from Children Now on the budget crisis.
* A column in the Sacramento Bee dismantling the Assembly Republican argument.
We all need to continue to pursue press in each of these areas: sponsoring and participating in press events; placing op-eds and letters to the editor; and working with columnists and reporters to generates stories about the proposed cuts and their impact. Please contact us if you need assistance in any of these areas.
**Briggs urged to back proposed state budget
By Lisa Aleman-Padilla
THE FRESNO BEE
(Published Friday, July, 12, 2002, 9:58 AM)
A coalition of local leaders and state workers participated in a noontime news conference Thursday in an effort to persuade Assembly Member Mike Briggs to add his support to the state’s proposed budget, which is 12 days late.
“We’re calling on Assemblyman Briggs to do the right thing for the people of Fresno,” said Lisa Lacey, communications director for the Service Employees International Union, which represents state workers and organized the conference.
The union is pushing for the state Assembly to adopt the Senate’s version of the budget for the 2002-03 fiscal year.
The news conference took place in front of the State Building in downtown Fresno with about 40 people in attendance, some holding signs that read: “Mike, be a leader for Fresno” and ” Budget, Fix it, Pass it, Pay us now!”
Briggs, who was in Sacramento Thursday, said through his District Director Nathan Magsig that the Valley is always his top priority, but that he was still unwilling to support the budget in its current form.
“Right now in the current state the budget is in, Mike cannot vote for it because it will cause more harm in the long term, he believes,” said Magsig.
Briggs said in a separate statement that he was surprised that the Rev. Walt Parry and Fresno County Supervisor Juan Arambula, who were both present at the event, would criticize his actions on the budget without first calling him.
Parry said the news conference was an “opportunity” for Fresno to become aware of the choices elected officials are making during this budget process and how those decisions affect their lives.
“I’ve found it alarming that Republicans are willing to sacrifice the health and safety of the people they represent in order to support their political philosophy of no new tax,” Parry said.
Briggs has said that he is opposed to the $3.7 billion tax increase in the budget, and favors less spending in the areas of health and social services.
He said raising taxes would only harm the state’s fragile economy.
State employees who attended the event said that further reductions in the areas of health and social services will be especially hard for Fresno, which has one of the highest poverty rates in the state.
**Making the poor balance the state budget
By Amy Dominguez-Arms
July 12, 2002
Leading Republican legislators contend that the state spent irresponsibly when budget times were good, which they say is the major cause of California’s $24-billion budget deficit. Let’s consider their argument by examining exactly how spending has increased and how revenue sources have changed.
Those who believe spending is the problem point to a state budget that grew steadily throughout the late 1990s at an annual rate of about 8 percent. Those who call for increasing revenues to help ease the deficit note that the state’s tax take has been significantly pared in recent years, such as a two-thirds reduction in vehicle license fees since 1998.
The economic expansion of the late 1990s contributed to higher state revenues, and schoolchildren were among the principal beneficiaries of the increased expenditures. California’s per-pupil spending rose from $4,800 in 1994-95 to about $6,600 in 2000-01, improving our ranking among the 50 states and the District of Columbia from 40th to 33rd. This improved investment in schools reflected California’s priorities then and now, as repeatedly documented in statewide polls.
Again following the public’s lead, lawmakers targeted new budget investments to expand health coverage to children through the Healthy Families program and provide new funds for child care and after school programs. While many children remain without health coverage and child care waiting lists still surpass a quarter million statewide, measurable progress has been achieved. But today, many vital family programs are threatened by declining state revenues.
California lawmakers are faced with making budget decisions that will have repercussions for many years. As lawmakers consider what voters would want cut, they should also ask what they would want saved. We should be proud of the gains the people of this state have made in education, health care, child care and after-school programs, and fight to protect them, even as much more needs to be done.
This likely will require additional revenues. But the prospect of raising taxes – any taxes – is anathema to some policy-makers, particularly in an election year. Lawmakers in vulnerable districts worry that their support for tax increases will be used to demonize them in the fall election campaign.
However, California is an average tax state, ranking 21st among the 50 states when state and local tax revenues are considered together. An analysis from the California Budget Project shows that low-income households in California bear the highest tax burden. Households with incomes under $27,000 in 1998 paid 12 percent of their income in state and local taxes compared to about 8 percent for higher income groups.
In addition, this year wealthy Californians will gain considerably from the federal tax cut: those with incomes in the top 1 percent of all households will net an average of $51,717. One of the major legislative proposals to help close the budget gap (SB 1255) would impose a temporary tax hike on people in the upper brackets that would cost an average of $7,674 for these taxpayers, or about one-sixth of their federal windfall. This bill would raise $3.1 billion in 2002-03, sparing hundreds of thousands of California working families and their children from losing crucial access to health care and other programs. Such a temporary increase was last undertaken in 1991 by Gov. Pete Wilson and twice by Gov. Ronald Reagan in 1967 and 1971.
California’s revenue sources have changed in the last two decades. Since 1980, state income sources have shifted dramatically from corporate to personal income taxpayers, according to the California Budget Project. Corporate tax breaks enacted over the last decade cost $2.5 billion in lost revenues in 2001-02 alone. In 2002-03, personal income taxes are estimated to provide 54.8 percent of state general fund revenues, up from 34.8 percent in 1980-81, while in the coming year, corporate taxes are estimated to provide 7.6 percent of General Fund revenues, down from 14.4 percent in 1980-81.
In other words, some sectors of our community (corporations and the very wealthy) have seen their share of taxes decrease. As the Legislature and governor determine how to reconcile state revenues and expenses, the burden of closing the budget gap should be shared fairly among all Californians. But the major budget reductions now under consideration – including significant cuts to family health programs – would fall particularly heavily on low-income working families and their children.
A statewide poll released Tuesday by the California Healthcare Foundation found that 77 percent of voters agree that government should provide basic medical coverage to low-income or disabled adults who can’t afford insurance. This proportion increases to 84 percent of voters when asked about government providing medical coverage to the children of low-income families.
Compromising family health and education to avoid taxing the wealthiest among us is a choice that doesn’t add up for most California children and families.
Dominguez-Arms is vice president of Children Now, a child research and action organization based in Oakland.
The Sacramento Bee
**Daniel Weintraub: It’s time for would-be budget cutters to get real
By Daniel Weintraub – Bee Columnist
July 11, 2002
So many lists filled with potential budget cuts are floating around the Capitol these days that you might think the recommendations, added together, would wipe out the state’s $23.6 billion deficit with room to spare.
There’s the list that Sen. Dick Ackerman, R-Fullerton, offered up to the budget-writing conference committee. There’s one his Assembly counterpart, John Campbell of Irvine, suggested. Then there’s one put out by the Legislature’s nonpartisan analyst. There is even a list of cuts proposed by Democratic Gov. Gray Davis, supported by Republicans but rejected by the governor’s Democratic allies in the Legislature.
As the stalemate over the budget entered its second week, I thought it might be fun to gather all the items on all the lists, eliminate duplication, add them up and see what happened. I came up with $2.5 billion.
That’s not a small number. But it’s still just $2.5 billion out of a $77 billion general fund budget. That’s not even enough to wipe out half the tax increases that Davis has proposed as part of his borrow, tax and trim plan to postpone dealing with the budget mess until after the election.
A couple of caveats: In sorting through the proposals, I eliminated those cuts in kindergarten-through-community college programs that would require suspension of the state’s constitutionally required minimum funding for the schools. As far as I can tell, no member of the Legislature is willing to go there. I also tossed out a few proposals to cut the prison budget by releasing felons before the end of their terms or sending them to the streets without parole supervision. Not going to happen.
I’m also counting only those reductions that would be ongoing. One-time cuts and deferrals look good at the moment but don’t do anything to solve the state’s permanent, structural gap between spending and revenues, which is pushing $10 billion.
What was left? Some pretty tough stuff. We would push thousands of poor people off state-paid health care by requiring them to update their income status quarterly rather than annually. This would save the taxpayers $155 million a year.
We’d eliminate a cost-of-living increase planned for welfare recipients at the end of this fiscal year, saving $12.5 million. Forgoing increases planned for the aged, blind and disabled would save about $75 million. And rescinding a recent expansion of health care for low-income two-parent families would net us about $92 million.
Here’s a big one: The state would save $260 million by ending the provision of Medi-Cal services that aren’t required by the federal government. So dental care to poor elderly patients in nursing homes would go. Adult diapers for the incontinent? Gone.
All of those cuts were proposed by Davis but rejected in the Legislature. Republican leaders say they support those and more. The Senate Republican list would wipe out general fund support entirely for a number of offices or agencies. They want to eliminate the Inspector General’s office in the prison agency, kill off the governor’s secretary for education and end all taxpayer support for most environmental programs, leaving them to subsist on federal funds and fee revenue. Altogether, about $150 million could be saved there.
Others would like to wipe out most of the Technology, Trade and Commerce Agency, whose duties could be assumed by private chambers of commerce, and end state support for the Arts Council. Let’s count that as $60 million.
Finally, the state universities and the University of California would get a good whack, since they are protected neither by federal law nor the state constitution. Fees and tuition, which represent a subsidy to the middle class and wealthy from people whose own kids either don’t qualify or can’t afford admission, could be increased. Raising fees by 10 percent in both systems would save taxpayers about $80 million. We could pick up another $30 million by increasing the student-faculty ratio by half a student per professor.
The UC’s Institute of Global Conflict and Cooperation, which Senate Republicans note has been “ineffective at maintaining peace and cooperation in the world,” could go. That would make us feel better and save $600,000.
The point here is that adopting every cut on every list so far proposed by anyone who has the ability to sway more than his own vote would reduce state spending to about $74.5 billion. We can take that figure, then, as the minimum amount that just about everybody in the Legislature agrees is necessary. And that’s still more than the state expects to take in from tax revenues without a tax increase in the coming year.
Making those cuts would bring the budget closer into balance this year and make next year’s problem easier to manage. But anybody who wants to argue credibly that this problem can be solved without at least raising taxes back to where they were four years ago is going to have to come up with several billion dollars more in spending reductions. And fast.
Does somebody out there have that list?
Anthony E. Wright
1127 11th St., #234, Sacramento, CA 95814
Ph: 916-442-2308, Fx: 916-497-0921