Arnold and the State Budget

Meet the “New Arnold,” Same as the Old Arnold
“Equalization would certainly be a boon for the District but this does not negate the fact that the Governor’s hard-line anti-tax, anti-public sector ideology (largely taken from the pages of Reason Foundation reports with their penchant for privatization) will continue to present problems for education funding if he is re-elected.  One must also remember that his fee increases have driven tens of thousands of students out of community colleges state-wide and that tuition hikes at the four year schools present even further problems for our students once they move on to the CSU or UC systems.”  AFT Local 1931 letter protesting Schwarzenegger’s visit to City College in 2006
With the release of the 2008 state budget, the love fest between the Governor and those smitten with his “post partisan” repackaging should be officially over.  Still, Schwarzenegger cannot quite resist trying the same old bait and switch, comparing himself to FDR in his State of the State address as he proposed to gut spending on education, social services, and other essential state services.  As Dean Calbreath has noted in the San Diego Union-Tribune recently, “when Schwarzenegger unveiled his budget, it read more like it was written by Herbert Hoover than FDR.  Instead of FDR’s mantra of build, build, build, Schwarzenegger is proposing to cut, cut, cut.  Fire more than 2,000 teachers.  Release or parole 46,000 prisoners.  Shut down 48 state parks.  Take the lifeguards out of 15 beaches.  Slash funding for foster parents and families trying to work their way out of welfare.  All to avoid the most dreaded of political pariahs: a tax increase.”   Calbreath goes on to note that FDR “accomplished his goals by raising taxes—taxes on cigarettes, alcohol, income, inheritances, etc.—then pumping that money into programs designed to stimulate the economy.  The result: the GDP rose an average of 9 percent per year between 1934 and 1937.  At the same time, unemployment dropped from 24.9 percent to 14.3 percent.”
How did we get here?  After being delivered a humiliating special election defeat, Schwarzenegger lurched left, and supported new spending initiatives based on bonds and borrowing rather than raising revenues, all the while promising to balance the budget without raising taxes.  It was the promise of a free lunch for all. No draconian cuts to alienate the left or pesky taxes to alienate the right.  All of this was meet with praise by many prominent Democrats and leaders in the education community.  The problem is, of course, that while this strategy helped resuscitate the Governor’s political popularity, it didn’t work.  Schwarzenegger is now left with a budget deficit roughly the same size as the one he inherited from the much-demonized Gray Davis.  Hence, the Governor is now in the position of returning to his failed Proposition 76 strategy by again proposing that he be given the power to make mid year cuts.  In addition to this, Schwarzenegger is looking to suspend Proposition 98’s funding guarantees for education and asking for 10 percent across the board cuts at the same time he is proposing a questionable health care plan without any clear strategy for how to fund it. While the idea of universal health care is a noble one, how progressive a goal is it if we depend on slashing a whole range of essential state services in order to pay for it?  Without raising revenues, this political program will inevitably impose a scarcity model.  Who will lose the most?  Look in the mirror, fellow educators.  Some of the lowlights of the Governor’s cuts to the state’s education system include:
*A $360 million dollar midyear cut for K-12 and another 4.4 billion dollar cut in the 2008-09 fiscal year.
*A $40 million dollar cut for community colleges followed by another 484 million dollar cut in fiscal year 2008-09. 
*A $332 million dollar cut for the UC system in fiscal year 2008-09.
*A $312 million dollar cut for the CSU system in fiscal year 2008-09
*No COLA for all state employees.
The Governor is also looking to privatize some state services and will certainly support efforts to go after our pensions as he has pledged to do in the past.
Your AFT, Local 1931 has consistently opposed the Schwarzenegger agenda from the recall, to the special election, to the last Governor’s race.  We have warned against the political myopia which confused short term gain (a year or two of Arnold’s largesse) with a long-term strategy to ensure the health of education and the essential role of the public sector in California.  It is now abundantly clear that the Governor’s no new taxes pledge is at odds with the health of the state budget and quality education. We are back to the scarcity model that pits health care against education, the poor against the disabled, “tax payers” against “the spending lobby.”  While the Governor’s idea of a rainy day fund is not bad, we whole-heartedly reject the notion that he (or any Governor) be given the power to impose midyear cuts.  Instead of imposing a permanent scarcity model, we need to finally have the political courage to suggest that if people want quality education, they need to pay for it.  Recent polls suggest that despite the Governor’s popularity, a majority of Californians support raising taxes to avoid cuts in education and other state services.  Hence we need to ask that those who benefit the most from living in California pay their fair share.  Recently CFT President Marty Hittelman proposed to “identify and enact progressive taxes to fund education” in the following ways:

* Reinstate the vehicle license fee ($4 billion per year)

* Re-assess non-residential real property ($3 billion per year)

* Limit mortgage interest deductions to $50,000 in interest ($47 million per year)

* Require that large corporations file as corporations, not “S” type partnerships ($500 to 600 million per year)

* Enact severance tax on oil produced in California ($800 million per year)

* Close tax loophole for luxury boats and planes exchanged in Mexico ($55 million)

* Extend sales tax to Internet purchases ($20 million)

Also central to addressing the funding problem for community colleges is passing Propostion 92.  But, independent of the merits of this initiative, we need to defend the essential role of the public sector and insist on the real value of what we do.  Of course, bucking the anti-tax ideology that has been the stock in trade of the American right for decades is difficult, but, if we don’t make the case, education will b