California State Budget

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Understanding California Budget Reform (Revised April 16, 2010)

Fighting for Education, Government Benefits & Affordable Housing

[edit] 2009 Budget Cuts

• In the budgets passed in 2006, 2007 and 2008, California’s General Fund was $101.3, $102.3 and $103.4 billion respectively. The following year, the General Fund was reduced 18% to $84.6 billion. ^[1]
• This amounted to huge cuts in education, healthcare, SSI and affordable housing.
• In 2009, in order to cover the $60 billion dollar deficit for two fiscal years, 55% came from spending cuts, 21% came from temporary tax cuts and 24% from other sources including the federal govt.^[2]
• However, corporations received $2 billion worth of tax cuts in 2009.

[edit] 2010 Budget Proposal

• Of the expected 2010 budget, education makes up 57%, Health and Human Services makes up 25% and prisons make up 9.5%.

^[3]

• The Governor’s proposed budget reduces billions from education, reduces SSI payments from $845 to $830 (originally, $907 just two years ago), eliminates 87% of IHSS workers, denies 37,000 senior’s access to adult day care, denies 203,300 children from Healthy Families government healthcare and eliminates Medi-Cal and CAPI (SSI) for legal immigrants.^[4]

CA. Budget General Fund, 18% Cut

Property Tax

 % of Total State/Local Taxes

Effects of Proposition 13

[edit] Affordable Housing & Korean Seniors

• In a recent survey of residents in Koreatown, Los Angeles, 58% of the tenants pay more than one-half of their income in rent, 47% live in overcrowded housing, 91% wish that there were more rent-controlled housing and 87% wish that were was more parks. ^[5]
• In 2009, due to $1.7 billion cuts for redevelopment funds, over 350 affordable housing units being built within a three mile radius of Koreatown are threatened. ^[6]

Problems

• Corporations are receiving tax cuts while steeps cuts harm students, seniors, the disabled and the poor.
• Individual income taxes make up nearly 50% of the state tax revenue while corporate taxes make up only 11%. ^[7]
• Republicans consist of less than 50% of both houses of the legislature, yet there are twice more budget cuts than tax increases to fill in the budget deficit, and those tax increases are temporary.
• Property taxes, which mostly go to local governments, made up only 13% of total state and local tax revenue in 2005 as opposed to 28% in 1977. And corporate land owners are paying yesterday’s tax rates for property taxes. ^[8]

Solutions

• Reduce the 2/3 supra majority rule for the California Legislature to pass a state budget and raise taxes.
• Repeal the part of Proposition 13 that allows corporate land owners to pay yesterday’s tax rates and places a cap of 1% on property taxes.

[edit] References

1. ↑ Legislative Analyst’s Report, Budget Major Features: 2006, 2007, 2008 and 2008
2. ↑ California Budget Project, Searching for Balance: The Social and Economic Context of the Governor’s Proposed 2010-2011 Budget [PDF] P.13
3. ↑ CBP P. 7
4. ↑ CBP P. 50, 52, 54, 57, 60
5. ↑ Reclaiming Koreatown, May 2009 by the Koreatown Immigrant Workers Alliance and the Data Center
6. ↑ Press Release July 2009 by the Community Redevelopment Agency of Los Angeles
7. ↑ CFB P. 9
8. ↑ Robert W. Wassmer, California’s State and Local Revenue Structure after Proposition 13: Is Denial an Appropriate Way to Cope? [PDF] (May 14, 2008)