Shame on California
Image by dfarber via Flickr
The governor and the leaders of both houses of the legislature have reached an agreement to deal with the state’s unprecedented financial crisis. While the package must still be submitted to the remaining legislative members for a vote, here’s the long and the short of it.
Despite facing at least a $26.3 billion deficit, the deal provides for only $15.5 in program cuts. Included in these cuts are safety net expenditures that will leave some 500,000 children without health care and thousands of the disabled without home care visitation. $6 billion will be cut from the budget that supports K-14 schools, with a promise to repay some $9 billion back to the schools when the state is healthy…whenever that might be.
SOURCES: THE COURAGE CAMPAIGN and THE OAKLAND TRIBUNE
The remaining $10.8 billion shortfall would be erased by borrowing from local governments by $4.4 billion – putting additional stress on the big city local governments already trying to figure out what to do with their own ailing budgets, and delaying state employees’ checks from the last month of fiscal 2009-2010 to the first month of the next fiscal year in an accounting trick to make the numbers work out.
But a state’s gotta do what it’s got to do, right?
Maybe…maybe not.
One of the items that had been under consideration was an oil severance tax that would have obligated oil companies currently drilling in California to pay a 9.9% tax on every barrel they take out of California ground or shoreline. This money would have funded the health care services and children’s programs that will be lost in the budget cuts. Twenty- two states already have an oil severance tax. California is the third largest oil producing state in America. So why not in the Golden State?
You’ll have to ask the Governor.
Not only will there be no oil severance tax, it seems the budget agreement calls for new and increased oil drilling off the coast in exchange for a $100 million dollar guarantee from the oil companies which will be characterized as an advance against future royalty earnings due to the state. So more drilling…but no taxes on oil companies.
Speaking on this topic, California Lt. Governor and current Congressional Candidate John Garamendi said:
The Governor just put California’s coastline up for sale when he had other options that don’t put our natural resources at risk. He refused to approve a plan to tax oil companies that now extract oil in California to fund health care services, children’s programs and education. California is the only oil producing state without an oil severance tax, and it would generate $1.2 billion dollars annually for our state. Instead, we are taking dirty money. Big Oil has offered to California $100 million dollars to seduce the state into granting the first new oil drilling lease in California since the Santa Barbara oil spill 41 years ago. The loan must be repaid by forgiving future royalty payments to California. This is an incredibly reckless fiscal policy.
VIA CONTRACOSTA TIMES
Garamendi is right. If the Governor wanted to enter into a deal which required more drilling in California to get his $100 million, couldn’t he have at least done so and include a severance tax?
So, some kids won’t get health care, the elderly and disabled will have to find some other way to care for themselves and the kids in schools will pack into classrooms like sardines.
The important thing is that we will have taken good care of the oil companies and the minority, Republican legislators can hold their heads high, knowing they did not violate their pledge to never raise a tax, no matter how necessary it might be.
This is not a proud day for California.
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For thirty years now raising taxes has been kryptonite to politicians in California but only because the electorate has made it so. This because the Republicans have told everyone that it is possible provide government services (at least the one’s that their base wants) while paying little in the way of taxes. Their battle cry is has been to “cut waste” (meaning government services the Republican base does not want). Unfortunately, those “wasteful” programs are the ones more and more people desperately need right now, including people who had voted Republican in the past.
Agreed. But its not just the Republicans who have behaved badly. We have this rare opportunity to see how our actions can bounce back to bite us in the ass. On a bike ride, yesterday, my riding partner was complaining about how screwed up our state government is and how nobody was doing anything about changing the 2/3 vote requirement to budget and raise taxes. I asked him if he had voted for Prop 13 those many years ago – the one that brought out property taxes way down. He said he did. Imagine his surprise when I told him that he was responsible for the 2/3 vote requirement as the same had been created in that very Prop 13. People in CA still don’t even understand that they brought much of this upon themselves.
In response to another comment. See in context »Prop 13 placed a 2/3rds vote requirement to raise taxes.
In response to another comment. See in context »The 2/3rds budget requirement predates Prop 13.
“while paying little in the way of taxes.”
Do you live in California? I do, and can attest that we pay more types of taxes than many states, and at higher levels.
It’s a draconian budget, and some lousy choices were made, but please don’t tell me I’m paying “little” in taxes…
In response to another comment. See in context »I no longer take offense to my Canadian friend’s laughing at California’s bankruptcy. This is just getting ridiculous. Legalize and tax marijuana! Just kidding – sorta. But to think that there is no oil severance tax?! Arnold was one of the worst decisions for this state.
Marc- I used to defend much of Arnold did in California. But, I’m afraid I am rapidly coming to the conclusion that you are right on this. Also- why kidding about legalizing marijuana??? We already have stores to sell it to those with a prescription. Why not tax it? And why not just make it available to everyone and get over this foolishness? We could use 1 billiion in tax money right now. It would be just enough to pick up the lost social services and health care cuts.
In response to another comment. See in context »Oh, I’m all for the legalization and taxation of marijuana. The kidding part was me only half-covering my ass, just in case. I also hear that Oakland is heavily in favor of taxing medical marijuana. Maybe it could be the start of something huge?
http://edition.cnn.com/2009/POLITICS/07/22/california.pot.tax/
In response to another comment. See in context »Yes. The measure that would place a tax on the sale of medical pot passed overwhelmingly yesterday in Oakland – 80% for. A nice step forward!
In response to another comment. See in context »Off topic:
Rick I was very pleased with the speaker’s remarks earlier today.
Been in a meeting all morning so haven’t seen it yet. I’ll go check it out.
In response to another comment. See in context »