Budget Cuts Update

Friday, August 9th, 2002

* NEW BUDGET CUTS SCORECARD: Given the new parameters of the budget debate, we have a new and expanded Legislative Scorecard, detailing the proposed cuts to health care, and the current status of those proposals. View this at

* The new scorecard now includes not only those proposed cuts from the May Revise, but the explicit cut proposals by the Assembly Republicans.

* It also has new columns to follow the next phases of the budget battle, including whatever the Assembly budget would look like, and the Governor’s options, if and when a budget reaches his desk.

* The scorecard is now 3 pages. We are working on producing a simpler one-pager for general, grassroots distribution.

* While the scorecard shows that the Senate budget largely rejects the worst of the proposed cuts to health care, since it raises the revenues needed to restore funding, it is clear that until a budget is passed by both houses and signed by the Governor, our work is not over. Then there’s next year…

* TOBACCO TAX PUSH CONTINUES: Assembly Speaker Herb Wesson continues to focus on his proposal to significantly raise the tobacco tax. On Monday, August 12th at 10am, he will host a press conference with health care professionals and providers to show support for this tax. His office is interested in working with advocacy and constituency groups on other events, efforts, and ideas.

* THE RICH AND FAMOUS FOR REVENUES: Over 85 high-income earners released an open letter in support of revenues, particularly upper tax bracket restoration. BELOW is the article from the Los Angeles Times.




Budget: Group says state needs the money to balance this year’s and future spending plans and preserve vital services like health care.



August 8, 2002

SACRAMENTO — It’s a rare day when people ask the government to tax them more, but that’s exactly what dozens of California’s wealthiest residents are urging state leaders to do as a battle heats up over a new state budget.

Concerned about proposed trims to health care and other vital services, 88 of California’s high-income earners, including actors Ed Asner and Richard Lewis, are releasing a letter today asking Gov. Gray Davis and legislative leaders to reinstate top income-tax brackets to help balance this year’s budget and future ones.

“This is about the devastation to needed services in the state and thinking about something other than your own wallet,” said signatory Roy Ulrich, a Santa Monica attorney and president of the California Tax Reform Assn.

“It makes me sleep better at night,” he said.

If revenue is not found to reverse proposed cuts, Ulrich warned, all Californians will be affected.

“We may be separated by neighborhoods, but we are not separated in terms of a failed health-care system,” he said. “We all use trauma- care centers.”

The letter comes as Democrats who control the Assembly struggle to pass a $99-billion spending package that cleared the state Senate on June 29.

Republicans are blocking the plan due to its reliance on more than $4 billion in new taxes and revenue, in part by raising the state cigarette tax to $3 per pack.

The tax package failed to clear the Assembly on Wednesday on a 50-20 vote after several hours of particularly bombastic oratory.

At one point, Assemblyman Ken Maddox (R-Garden Grove) compared the budget to a giant mosquito carrying the West Nile virus.

To balance the spending plan, Davis and his fellow Democrats have proposed a combination of new taxes, spending cuts, borrowing and fund transfers.

Their approach is similar to one used by former Gov. Pete Wilson when he faced a $14-billion hole during the recession of the early 1990s.

Even with those steps, state analysts predict that California will face five more years of shortfalls.

Assemblywoman Helen Thomson (D-Davis) is among the Assembly Democrats who have publicly supported taxing top earners to prevent health-care programs and other key state services from being diminished.

“To make the kinds of cuts that Republicans are proposing we would have so little left in terms of health care, parks and education,” Thomson said.

“We don’t need to make such draconian cuts that it puts California behind such states as Missouri and Georgia,” she said.

Senate Leader John Burton (D-San Francisco) previously proposed increasing the highest individual tax brackets from 9.3% by adding 10% and 11% brackets.

Estimates of the revenue that would be generated by his plan range from $2.7 billion to $3.3 billion.

The Burton plan died, however, after it failed to garner the single Republican vote necessary to pass the budget out of the Senate.

Davis, who believes that the state has become too reliant on personal income tax revenues, also opposes the proposal.

Nonetheless, advocates for the poor have continued to push for higher taxes on the rich.

Anthony Wright, organizing director of the health-reform group Health Access, said proposed cuts have put access to health insurance for hundreds of thousands of Californians at risk in addition to hospitals and trauma centers.

Health Access California promotes quality, affordable health care for all Californians.
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