Newest Budget Plan May Assure Long-Term Recession
Posted May. 25, 2012, 11:00 pm
Tom Elias / Mirror Columnist
From the moment Gov. Jerry Brown announced his latest budget revision proposal, complaints poured in both from his political enemies and some interests that have usually supported him.
Republicans griped that Brown’s plan depends on a November tax increase initiative to prevent several billion dollars more in cuts atop the more than $8 billion he proposes. In-home care workers complained that cuts to their program would eventually cost the state far more than any immediate savings, as illnesses among invalid senior citizens would go undetected until they’ve become cataclysmic.
The same sort of complaint came from advocates of the Healthy Families program established more than 10 years ago by then-Gov. Gray Davis to provide health care for indigent children. There was also grousing from public employee unions, whose members’ hours will likely be cut.
And there was the usual complaint from the right that Brown didn’t depend solely on cutbacks to make up a projected $16 billion deficit, instead pushing for his tax-increase proposition. An attack on job creators, several bloggers called the whole plan.
The grousing from special interests across the political spectrum missed the forest for concentrating on their particular trees: This budget proposal does nothing to improve some of the conditions that keep California’s unemployment rate well above the national average.
There’s nothing in this budget plan to make the state’s public universities more affordable, for instance. Yes, the poorest students will still be able to get Cal Grants, but overall grants would be cut by $38.4 million, essentially leaving out all but the very poor.
Meanwhile, the small (relative to its costs) funding increase of $90 million for the University of California that was planned in the January version of the budget is cut by $38 million. This can only increase pressure for tuition and fee increases at a time when both UC and the larger, but less elite, California State University system have already raised student costs to levels where many candidates for admission find it cheaper to attend private colleges. Within days of Brown releasing his revised budget plan, UC Regents began discussing another 6 percent tuition increase, which would be added to the 24 percent rise of the last two years.
The financial pressure on UC has caused it to admit more out-of-state students than ever, in part because they pay higher tuition. That’s one big reason a recent study concluded about half the California high school graduates who would ordinarily be considered qualified for UC admission are not going there.
How does this translate to continued recession? CEO Magazine and others report that an educated workforce is one major factor in business decisions about where to put new facilities and their jobs. With most out-of-state UC students returning to their home states or countries after graduation, California will be left with far fewer highly educated prospective workers than it should have.
Further exacerbating this problem are the constantly-rising fees and ever-smaller availability of classes at community colleges.
Similarly, there is nothing in the latest budget proposal that takes aim at the state’s sky-high dropout rate, expected to come in at somewhere between 26 percent and 32 percent in the annual report of the Department of Education, which was due out in mid-May but has been delayed a bit, as usual.
Nothing makes for an uneducated workforce more than high dropout rates, and this is one affliction California has had for more than a decade, without doing much about it. Now those chickens are coming home to roost, as older workers retire and many of the young people who should be replacing them are simply unqualified.
Not that other places are much better; dropout rates in Texas, for example, are similar to California’s.
Things would only get worse if Brown’s tax increase initiative fails in the Fall, as the last three tax-increase propositions all have done. If that happens, $5.5 billion will be lopped from state support for public schools and community colleges, $250 million each cut from UC and the Cal States, not to mention more than $20 million in lowered support for law enforcement and fire protection.
Police and fire protection are also among the basic public services businesses check on when deciding where to locate. They’re in for some cuts, too.
Brown may have needed to make reductions like these, as he says. But in at least some cases, they will render California less and less able to pull out of the current economic slump and more likely to fall into new ones.
Given Californians’ penchant for cutting taxes and public services, a trend dating back to the 1970s, it may be appropriate to recall what both Thomas Jefferson and Alexis de Tocqueville observed early in the 19th Century: In a democracy, the people get precisely the government they deserve.