California State Budget Crisis Not Caused by the Recession

by Peter Phillips
The budget crisis in California has been artificially created by cutting taxes on the wealthiest people and corporations. The current “crisis” is a shock and awe process designed to undermine wages and unions in the state and force labor concessions to protect corporate profits.

According to the California Budget Project, tax cuts enacted in California since 1993 cost the state $11.3 billion dollars annually. Had the state continued taxing corporations and the wealthy at rates equal to those fifteen years ago we would not have a budget crisis today.

Half of all state revenue comes from personal income taxes paid by working people, and another third comes from sales and use taxes. The result is that as a percent of income, taxes hit the lower paid workers the hardest. Corporations only pay for about 1/10th of the state budget. The rest of us are bailing out the rich by accepting massive budget cuts at a time when less spending will only exacerbate the economic situation.

Unions and working people need to say no to massive state budget cuts, and fight for every service and job possible.

http://empirereport.org/reports/20090623-budget-crisis-not-caused-by-recession

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JFoster

As usual, Peter Phillips writes provocatively, but without any facts. Here are a few: The richest 1% of tax filers in CA pay nearly half of all taxes in the state, and the richest 15% pay over 80%. The reasons for the decreases State tax revenues have grown faster than inflation plus population growth in CA since 1990 but spending has grown even faster–the problem in CA is SPENDING, not taxes.

State employees are a big reason for this out of control spending. CA has among the most expensive state government workers in the country. CA accounts for 9% of US state employees, but 12% of US state government pay! What’s more, CA taxpayers fund 55% of the budget for the CSU system (where Phillips works), versus an average funding level of 30% elsewhere in the US. The heavily unionized state education system has one of the highest per student spending rates in the US, and still gives us a quality of education for our children ranked 48th out of 50 states.

So now you know Phillips agenda–he writes to keep state unions strong and salaries up not because he’s interested in what’s best for California, but because he’s interested in what’s best for himself. Phillips is part of the problem, not part of the solution.