The following is from Steve Miller:
Steven Miller has taught science in Oakland’s Flatland high schools for 25 years. He writes about the corporate agenda of austerity and privatization of public education and public resources.
Back in March, the CFT dropped the Millionaires’ Tax and agreed to support a compromise proposition with Governor Jerry Brown. This was quite controversial. Now, with the advantage of hindsight, how does the compromise look?
One thing is for sure. Since the compromise, Brown has thrown a lot of shit into the game. Firstly, he leads with a terrible threat: if my tax proposition doesn’t pass, the state will see billions of dollars in trigger cuts. This brutal threat covers the fact that Brown included in the $92 billion dollar budget $8 billion to kick off the high-speed rail project.
High-speed rail, almost 10% of Brown’s budget, will be paid for by bonds, not money from the general fund. The 7-5-12 SF Chronicle states that. $4.7 paid with voter-approved bond funds and $3.3 billion for the federal government. The Oakland Tribune of 7-10-12, in a strong editorial against the plan, states:
“Backers of the project argue that voters approved the sale of $9.9 billion worth of bonds for the project back in 2008. True enough. But what the voters approved in 2008 is barely a nodding acquaintance with what the Legislature has now embarked upon. Voters were promised a system from San Diego to Sacramento at a cost of $45 billion. Today, the project stands at $69 billion, but would link only San Francisco with Los Angeles.” (I could not find this editorial on-line, though there are plenty of editorials against high-speed rail.)
The bigger question is this: how can a governor propose such a plan, when he is implementing a brutal Austerity program that horrific cuts to schools, childrens’ health care and other social services? This boondoggle is a give away to the corporations in California that Brown refuses to tax. Furthermore, bonds mean that the state will have to pay the money back in the future. This will include untold amounts of interest to the very financial industry that destroyed the economy AND which received at least $16 trillion in tax money to bail out their bad loans. In my opinion, we already paid this interest off many times over.
Could the Governor have floated bonds to make higher education affordable again? Could he have proposed bonds to bring the state’s K12 education out of the dumps? Well… sure he could. He could do this. But he didn’t.
The funding nuances may well be lost on California voters. Recent polling shows that Californians are much less likely to vote for the tax proposition precisely because of the high speed rail. Brown savaged a variety of programs that used to be called “the safety net” in order to save $8 billion dollars. This includes 15,000 state jobs.
It is only a step to conclude that these cuts were made so that Brown could include the high-speed rail. Excluding the rail plan, the budget could be $9 billion less. But it isn’t. Brown’s threat of trigger cuts now essentially reads: support high-speed rail or else.
It gets even uglier. The centerpiece of Brown’s budget strategy is to force state workers to accept huge hits to their pensions. The age of retirement is upped from 55 to 67. Workers will now pay at least ½ of the cost of their benefits. New workers will have to take the unstable and dangerous 401(K) retirement plans. These, of course, are popular with the financial industry because they inject immediate cash into speculation.
Californians are strongly against these cuts (SF Chronicle, 7-10-12). Furthermore, the supposed justification for the cuts is because San Jose and San Diego voted for “pension reform” in the June election. What is not mentioned is that the voter turn-out was very small. This is not a public mandate. It is just another maneuver to implement Austerity.
It’s hard to decide whether these cuts are a transfer of funds to high-speed rail or Wall Street. It really doesn’t matter. In the end, both benefit at the expense of state workers. Note that no corporations were forced to take a hit to fund either the budget or the railroad. Brown has the unmitigated gall to claim that these cuts are necessary so he doesn’t have to cut public education! Obviously, cutting public education is more important than eliminating high speed rail.
When Brown forced CFT President Josh Pechthalt into a “compromise”, the CFT’s Millionaire’s Tax was leading the pack. It had strong public support because it rejected regressive taxes and because it taxed millionaires by name. The CFT proposition was seen by most people as a way to fund higher education and reduce ever-escalating “fees” that is making public higher education unaffordable.
Brown’s current proposition has a 1/4% sales tax - inherently regressive – and avoids the national precedent of targeting millionaires as a group. While the real story has never been made public, Brown called CFT President Josh Pechthalt into a secret meeting. Pechthalt agreed to drop the Millionaires Tax, while Brown increased taxes a little more on higher income brackets.
The deal was reached before the language was written. Let’s examine what else Brown has done since:
* Brown’s proposition is formally titled “The Schools and Local Public Protection Act of 2012”. Who knew that some of this money will be diverted to local police departments?
* About 3 weeks after the deal was cut, Brown suddenly announced that the budget deficit was really $7 billion more. This wipes out the approximately $7 billion the compromise is expected to raise. While this was a surprise to some, the real $15.7 billion deficit was openly discussed in February.
* Now we must fund the high-speed rail, expected to come to fruition in only 17 years, at the expense of educational and social programs.
* Jed Wallace, president and CEO of the California Charter Schools Association (CCSA), represents 982 charter schools in California. His position:
“Education budget cuts have severely impacted charter public schools across the state. As demonstrated by a recent Legislative Analyst’s Office (LAO) report, charter public schools are systematically underfunded, and recent budget cuts and deferrals have put many of our charter schools-new and existing-in a precarious situation. The Governor’s initiative is the only solution that will end the chronic budget cuts that have severely harmed our schools and provide increased funding and stability for California’s historically volatile budget, putting schools and public safety first.”
* Now UC Regents are threatening a 20.3% tuition increase – IF Brown’s proposition does not pass.
There are some lessons in this mess. The trigger-cuts are clearly a powerful threat so that voters will pass Brown’s tax proposition. The high-speed rail addition to the budget may well drive voters to reject the proposition and therefore implement the triggers.
There is nothing wrong with compromise. Some times it is absolutely necessary. The principle is you fight for what is right and compromise based on the forces that you can mobilize. But this does not mean you reduce your goals and no longer articulate what needs to be.
Next year – and you can bet Brown will be making more threats and cuts for the next budget – it might be better to get Brown’s signature on any deal. Nobody signed on to support high-speed rail.
Lastly – compare Brown with Scott Walker. Which politician, Democrat or Republican, is doing a better job of meeting Wall Street’s goals?
14 July 2012