The really bad news about the state budget


There's no way to put a good spin on the new budget figures released by the Guv. No matter what happens in November, people who need help are going to get screwed in this state. Public schools will lose money. Health-care for the poor will be near collapse. Cities and counties will struggle to preserve the local safety nets. It's just a disaster, and there's no other way to look at it.

Of course, if we don't approve Jerry's tax plan in November, it will all be much, much worse. And he seems to be doing the right thing to promote the idea, making it clear just how deep the cuts will be and where they will hit.

But the tax plan is nowhere near enough, not even enough to keep the state at its current austerity level, much less to repair some of the damage and replace the funding that's already been eliminated. And while the notion of cutting state workers back to a four-day week, or of mandatory furloughs, may sound better than cutting specific services, think about what it means:

First, all that money that the state workers give up will instantly disappear from the economy. Most of these folks aren't wealthy, and they spend what they earn. That's a hit to already-depressed demand. Then there's the impact on the rest of us. Try getting an appointment at the DMV. (You think it's bad now? Take away 20 percent of the employees.) Try getting a court date if you've been injured. (Oh, but if you're a landlord, don't worry -- evictions won't be slowed down at all.) This is going to be awful.

Here's what I would say to Jerry: Push not only for your tax measure but to elect enough Democrats to pass taxes without going to the ballot. There's no reason this current measure needs a vote of the public; the Legislature has every legal ability to pass all of those taxes. And if it weren't for a handful of Republicans who drink the no-tax Kool Aide, it would be happening.

Closing a few corporate loopholes and instituting an oil-severance tax would solve much of the remaining deficit. Reinstating Schwarzenneger's cuts to the vehicle license fee would solve the rest. And all of that can be done without a ballot fight.

The moderate Democrats in Sacto annoy me as much as the Republicans sometimes, but if Brown and Legistlative leaders make it clear that they're helping candidates in swing districts, but that they expect them not to be obstructionist on taxes, there could be much better news in the years ahead.



simply by increased taxes. That is, not just the increased taxes that the government collects each year because of inflation, which also pushes more and more of us into higher tax brackets. But also increasing rates.

On the one hand, you claim that cutting the pay of state employees "takes money out of the economy". And yet you simultaneously claim that taking more taxes out of our pocket magically does not take money out of the economy.

That makes no sense. The amount of money is the same either way - we're just quibbling over who has it. Your idea says public sector employees should have more - the other idea is that those who actually create wealth should have that money.

IOW, class warfare, yet again.

Posted by Guest on May. 15, 2012 @ 2:04 pm

CA has a terribly dysfunctional governance and tax system and that combination is badly impacting people in this state. When revenues decrease you seek to cut expenses and boost revenue - you cannot just cut and cut and cut. If you want an example of how that turns out look at Greece.

Posted by Troll II on May. 15, 2012 @ 2:55 pm

rampant tax evasion and black economy. That's not really our problem here. I'd identify two key factors:

1) The cost and burden of funding healthcare and education for millions of illegal immigrants, and

2) Out on control public sector pay and benefits.

A lot of voters aren;t going to support higher taxes if theu see state and city workers with fat pay and pensions.

Posted by Guest on May. 15, 2012 @ 3:12 pm

Germany and Sweden have higher tax rates than Greece but are booming economically. Your simplistic model fails to account for reality.

Public sector pay and benefits are generally lower than in the private sector.

Pensions are having difficulties due to a reduced expected rate or return on their investments. This is entirely caused by the financial sector's mismanagement of the economy. We need to make the true parties responsible for the debacle pay the cost.

Posted by GlenParkDaddy on May. 16, 2012 @ 8:32 am

Quite simply that it is a DB system when everyone else is on a DC system.

Fix that and then, and only then, talk to me about more taxes.

Sweden? Suicide capital of the world. Germany? Humorless Nazi's. Wanna try again?

Posted by Guest on May. 16, 2012 @ 9:52 am

Have lived in Sweden and happy to report: suicide is rarely associated with the country, culture or anything else supporting this wrong-winged dumkopfer (German-esque, btw) that sometimes has our lesser, American myopically inclined entertaining polar bears walking down the streets of Stockholm. Quick, run!

Suicides in more northern climates are often associated with what psychologists call seasonal affective disorder or SAD, compounded by stress, insufficient coping or support or both. While mortality rates may show a higher incidence in a country of 9 million, actual suicides in the United States in comparison with roughly 319 million people with a notably high rate in Alaska will far outnumber any result by Sweden. A coincidence? Nah.

I could go as far to suggest our unseemly high numbers for suicide are indication that our more rightish economic policies that have produced laissez-faire marketeering are... *fill in blank*, but I agree with the old proverbial wisdom about bombast never being a substitute for substance because - well, it isn't.

It was a great point about taxation made of each country, Germany included (to our more geographically-challenged peers who see "Olde Yerope" with a Bushian lens). The fact remains that we get less than we pay for, mostly - and the challenge in making that clear to many people in the U.S. has been in battles of social mobility myths/mythbusting a la Horatio Alger (it's more tokenism, really) and how to account for the top one percent being able to control over 90 percent of the wealth for proportionality's sake.

Posted by Michael R, District Five and still alive on May. 21, 2012 @ 12:55 pm

We need to get the anti-government extremists out of Sacramento, so that we can get back to fixing problems again. The GOP has completely lost it, it should be no problem getting them under 1/3. They are extremely disliked in California, except in a few pockets.

Posted by GlenParkDaddy on May. 15, 2012 @ 3:32 pm

Jerry's tax proposal is a total sham. The school districts are billions short on their pension obligations, so any money they get will just go to cover that liability.

If Jerry's taxes pass, California's highest rate will be at 13.3%. Think about that. And when Obama's tax cuts expire, the federal rate will top out at 39%. So high income earners in California -- i.e., the ones paying the taxes -- will be at a combined marginal rate of 52%. Even Jerry admitted in his press conference that one of the reason the state's revenue is so out of whack is that the California tax system is so reliant on high earners and their income is volatile.

Posted by The Commish on May. 15, 2012 @ 3:35 pm

Interesting, Commish. So the Teacher's Pension fund is just like our good "City Family." It assumes 8% annual return on investments, but they have been much less over the past decade. So money from the General Fund (funds for students, in this case) is siphoned into pensions instead. This is what bankrupted the Richmond School District a few years ago. And the bankruptcies will pile up in coming years.

""If children are to succeed in this very competitive world, they must receive a world-class education. In California, that won’t be possible so long as politicians continue to steal from them by refusing to address the single most important issue affecting school funding. Money from tax increases should make it to the classroom, and for that to happen, politicians must address pensions."""

Jerry Brown understands this. This year he proposed raising the retirement age for teachers and school administraters from 55 to 65 (the horror!) and making teacher's pay into a defined-contribution plan (like 401-K) for part of their pensions. His proposals died in committee, however.

Posted by Troll the XIV on May. 15, 2012 @ 3:56 pm

That's the same age as cops and firemen, but they have jobs that are massively physically demanding.

I'm now even more opposed to any tax hike until teachers work to age 65 like the rest of us. This is outrageous.

Posted by Guest on May. 15, 2012 @ 4:19 pm

Teachers do not retire on full pension at 55. This is another big fat lie.

Posted by GlenParkDaddy on May. 15, 2012 @ 7:21 pm

Why do you tools lie about such easily disproven falsehoods?

If you are a teacher with 30 years of service who retires at 55 you get 40% of your annual salary. And no Social Security.

If you were making $60k/yr when you retired, then you have $2500/mo to live off of.

What do you say to that?

Posted by GlenParkDaddy on May. 16, 2012 @ 8:52 am

1) Retiring at 55 is a sweet deal regardless. Especially if I had every summer off like teachers do.

2) $2,500 per month is a sweet deal as well. A 30K per annum pension would require a lump sum of about a million dollars to buy an annuity at age 55 with an equivalent payout.

A million!

Posted by Guest on May. 16, 2012 @ 9:54 am

How much is your average Social Security pension worth? It is pretty close to that.

Posted by GlenParkDaddy on May. 21, 2012 @ 3:46 pm

and that's for people who work longer, including - imagine this - in the summers too.

Posted by Guest on May. 21, 2012 @ 4:23 pm

The guy is taxing the poor (sales tax) to fund rich government pensions- as a "progressive," you should be ashamed of this proposed reverse transfer of wealth.

The good news is - a major lawsuit was filed against CA teacher union corruption today on behalf of poor children so education may improve after all. New tax revenue for teacher pensions doesn't help the kids, reforms do.

A good day!

Posted by Guest on May. 15, 2012 @ 4:00 pm

of us, there would be plenty of money for classrooms and taxes would be lower. Enough already.

Posted by Guest on May. 15, 2012 @ 4:20 pm

I've been working full-time as a paraprofessional for the school district for 12 years now and the sum total of my pension fund (now discontinued) is enough to keep me solvent for one year of very quiet living. What educators do for a living is VERY different from the type of work that most educated people do. The stress of meeting state regulations in an environment that is driven by the needs of a classroom of children who, in San Francisco, often come from immigrant families that are struggling too hard financially to deal with the intellectual or social needs or even the discipline of their children can be overwhelming. Add to that the fact that classrooms are increasingly poorly supplied and the job becomes one that appeals to fewer and fewer intelligent, conscientious job-seekers. I'm going to guess that you're not applying for a teaching job soon so your best hope is that the Second Coming of Christ includes a battalion of selfless educators ready to staff the school districts of America at reduced salaries and ridiculously low pensions. Having said this, you might look at how much the school district has spent over the last decade pushing one curriculum after another onto teachers and their classrooms.

Posted by Guest on May. 15, 2012 @ 8:28 pm

I'm sure you're doing God's work. Maybe your pension sucks. That doesn't change the fact that the teachers' pension fund is massively underfunded, the districts need to make up the difference to cover the liability, and therefore any money they get from the tax increase (if it passes) will go to cover pensions, not improve students' education.

Posted by The Commish on May. 15, 2012 @ 9:43 pm

The pensions are underfunded due to the looting of the economy by the financial sector. We should tax them to pay for the shortfall.

Posted by GlenParkDaddy on May. 16, 2012 @ 8:38 am

They are underfunded because politicians made promises to the teacher force then didn't fund the pension fund. They are underfunded because the teachers' pension fund relied on unrealistic expected returns.

Making vague claims that they're underfunded because the big bad financial sector "looted the economy" and therefore it needs to be taxed isn't even going to get you a cup of coffee. Good luck with that effort.

Posted by The Commish on May. 16, 2012 @ 9:14 am

Guest, you are right. Teaching is a stressful profession. I am an artist, and have occasional substitute taught at SF middle and high schools. The students can be demanding, certainly. I feel your pain.

But if you hate teaching so much, there are plenty of people willing to step in and take your place. Take your nice health benefits, your defined-benefit pension plans, your free summers. You have a nice middle-class profession. Don't pretend otherwise.

And, your pensions are eating away at funding for schools. Also, your strict seniority system lets incompetent teachers stay on the job without fear of ever getting fired. The previous superindendent tried to set up a system for Everett and other schools serving immigrants/the poor under which the senority system would be disbanded, because at these schools, the young energetic teachers get laid off every year and replaced by old fogies waiting it out until retirement. The students know what's going on. They, and their parents, despise the seniority system.

But the union got its way, as usual. Seniority rules.

Posted by Troll the XIV on May. 15, 2012 @ 9:51 pm

So, Tim hates the idea of rich people in SF, and then whines that tax revenues aren't,high enough...

Posted by Guest on May. 16, 2012 @ 7:30 am

He just hates rich people, which of course makes it easy for him to believe that we should mug them first, before banning them.

Posted by Guest on May. 16, 2012 @ 9:56 am

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