My Fellow Californians

The San Francisco Chronicle published a survey this week on people's opinions on the California budget situation, and Gov. Brown's plan to balance the budget through a combination of spending cuts and tax increases.  The survey showed that everyone is really worried about the state of public education (as they fardling well should be!).  I will quote two paragraphs that about sum the results up:

Overall, the poll found that 61 percent of those surveyed supported closing the state's deficit through roughly half spending cuts and half extending and increasing taxes if that meant K-12 education would face no further cuts, as Brown has proposed.

However, Brown's proposal would restore a 0.25 percentage point increase in the personal income tax that expired in January and when asked about raising personal income taxes to fund K-12 education, 62 percent of those surveyed opposed the idea.

Nobody wanted to "raise taxes" by keeping the existing 1 cent sales tax that will expire in July, either.

Really, people?  A "0.25 percentage point increase" is too much?  Do you know how much that is?  Let's leave out the wealthy - how much is .0025% of the median salary in California?  According to the U.S. Dept. of Health and Human Services Administration for Children and Families, the median salary in California for a family of four is $76,488. That's for fiscal year 2010-2011.  A quarter of one percent of $76,488 is - $191.07.  That would be for the whole year.  It's $15.92 per month. 

You spend more than that on Netflix, if you have any kind of subscription package.  That's about 3 lattes at Starbuck's.  But 62 percent of you can't spare $16 a month to keep the schools from being cut any further?  

California has one of the worst education systems in the country.  I think 3 or 4 states are worse, it depends on who's counting what.  And we have that because we are too cheap to pay for schools.  We say we care about our kids, but we don't care enough to put any money into the schools they attend.  We've convinced ourselves that "taxes are BAD."  Sixteen bucks a month is gonna break you if you make $76,000 a year?  If you make $50,000 a year, it's $10.41 a month.  Just for curiosity, I ran the percentage for $250,000 a year - it comes to $52.08 a month.

Don't give me this crap that we can't afford a .0025% tax increase to support the schools.  We can't not afford it.  We all have to live with the children these schools turn out - if they can't read, can't do math, can't use a computer, can't think, then they can't get a job, and they'll be mugging you on the street or breaking into your house.  Is that what you want?  I don't. 

Oh, yeah, and those rapacious unionized teachers that everyone has been ranting about?  Do you know how much they really make?  The site TeacherPortal.com shows average salaries by state.  I think these numbers are about 3 years old based on the dates on the comments.  This table shows that the average starting teacher salary in California is:  $35,760.  The average salary overall is:  $59,825.

What was that median salary for California again?   Oh, yeah - $76,488.  So the average teacher in California makes $16,663 a year less than the state median income.  And they spend some of it on supplies for the classroom because we don't pay enough to support the schools. And it's about to get worse, because we're too cheap to raise taxes.

Redeveloping Our Ideas

When Jerry Brown produced his first budget for the State of Calilfornia, I figured he'd gotten it about right:  enough cuts to annoy the Democrats, enough tax increases to fry the Republicans, and no hallucinations of money from the Feds that wasn't going to come.  He managed to gore almost everyone's ox, and that's good.  But apparently the most painfully gored ox belonged to the Redevelopment Agencies.

He released the budget on January 10.  It didn't take 24 hours for articles to start appearing (they're still coming, see Google) with the general theme, "Redevelopment money?  You can't take away our redevelopment money!  How can we live without redevelopment money??"  Other groups have since chimed in on the general chorus of "how can you take away our money?", some of them with more justice than the redevelopment agencies.  The argument about in-home care support is particularly poignant, because some of these people will have to stop living at home if the state support stops.  Everyone says, "but it's cheaper for the state to keep them at home than put them in a nursing home," which is true; but they miss the point that the state probably won't have to pay for the nursing home - the families will, or Medicare will. 

But I digress - back to Redevelopment Agencies.  In a print exclusive in the Sunday S.F. Chronicle (look for it online on Tuesday 2/1), Willie Brown floats a rumor that Jerry and the California mayors are privately cutting a deal on the Redevelopment Agencies, details to be revealed later.  If this is true, I think it's a mistake.  Everyone is screaming, "How can we live without Redevelopment Agencies?"  This is a rhetorical question.  The real question they ought to be asking is, "How can we live without Redevelopment Agencies?"  How can we do what we need to do, in a new way?

Albert Einstein once said, "The definition of insanity is doing the same thing over and over again and expecting different results".  Redevelopment Agencies are part of doing the same thing over and over again.  We've been doing the same thing over and over again in this state for 40 years, and the result is that the state is bankrupt, the cities and counties are bankrupt, and everybody is screaming that their ox is being gored.

I'm not the first person to say this but it's still true:  We have to start asking ourselves the hard questions.  What services should the state provide, and how should we pay for them?  Ditto counties and cities - what services should they pay for, and where do they get the money?  I think most people would agree that repairing the streets is a service that cities should provide, but there are streets in Oakland in such bad shape that your car's shocks are at risk.  You'd think you were in a third world country.  Oakland has committed to paying employee salaries and benefit packages well above the local market; and they can't afford to pave the major streets; the street I'm talking about is Broadway, hardly a side street.  We used a stretch on Broadway to test the all-wheel-drive on a new SUV we just bought.  I question these priorities.  We have a new mayor in Oakland; I hope she's capable of asking these hard questions; but since she has been part of the problem for the last 5 years (as head of the City Council finance committee), I'm not optimistic.

City, county, and state:  we all have to stop and ask:  what are we doing?  What should we be doing?  Where do we get the money to do that?  What are we doing that we really should find someone else to do on a contract basis?  If we don't ask these questions, we're insane by Einstein's definition.

A Taxing Question

The Democrats in the California legislature have labored, and brought forth, not a mouse, but a proposed budget, which they claim will solve the state's deficit problem.  The main talking points seem to be that they will do the following for a representative California making $60K a year:

• increase the personal income tax by one percentage point (additional $473 per year)
• increase the vehicle license fee to 1.65 percent (it's now 1.15 percent and is scheduled to drop to .65 percent next year - cost to the taxpayer, $118)
• cut the state sales tax from 6% to 3.5% (savings to the taxpayer, $677)

The Republicans, including the Governator, are posturing madly about this attempt to Raise Taxes.  Ahnold says he will "never sign a budget that includes a tax increase."

Now, we all know that they made these numbers up.  Your Mileage May Vary, as the car ads say, depending on the age of your car and the amount of stuff you buy for which you pay sales tax, besides which, you probably don't make $60,000 a year.  But just consider this arithmetic as projected.

$473 plus $118 is $591 more per year from the beleaguered taxpayer. 

But the projected savings from the sales tax cut is $677. 

On my calculator that's a net savings to the taxpayer of 86 bucks a year.

First of all, how does this constitute a tax increase??  Second, how do the Dems propose to eliminate the deficit if their tax changes will bring in less money than the current arrangement??  And third, can't any of these people add??  (Well, no, of course not - they're mostly in the 30-50 age range, which means they were educated under California's "new math," under which the ability to add numbers together to produce an answer was not taught.  But that's another rant.)

Unreal

The citizens of California often complain that their elected representatives do a poor job of managing the state budget. Hell, I complain about this all the time. A new Field Poll reported in today's San Francisco Chronicle makes the situation perfectly clear:

The citizens of California are nuts.

The poll reports that:

• 67% of voters want to fix the budget through spending cuts, not tax increases.
• 70% of voters want to keep the two-thirds majority requirement to increase taxes.

On the other hand:

• By a roughly 3-to-2 ratio, Californians are NOT willing to raise taxes to balance the budget. Except on millionaires. Certainly no sales, gasoline or business tax increases.
  

I'm relieved to see that 53% of Democrats would favor paying higher taxes to fix the state budget; but that ain't enough to pass it. Eighty-one percent of Republicans oppose paying higher taxes.

The general consensus seems to favor sin taxes (booze, tobacco, and porn), and - get this - legalizing and taxing marijuana. 56% backed legal weed. It doesn't seem to have occurred to anyone that legalizing and taxing pot won't save the day, because - marijuana is a weed. It's extremely easy to grow in the back yard, and requires very little processing to make into your own tea, or even your own smokes - unlike tobacco. Once it's legal, there will be some market, but the main buyers will be people who either don't want to bother growing their own, or want the high quality weed produced by specialty growers. That isn't gonna cut it, folks.

Maybe it's my depression background, but it seems clear to me that if we want the services - and this poll makes it clear that we do want the services, especially public schools, public health, and higher education - We Have To Raise Taxes, including the income tax.

We pay the highest taxes in the country, you complain. Actually, I think New York is worse; but not by much. But - citizens of this country pay some of the lowest taxes in the world - particularly the gasoline tax. Europeans currently pay between $5.75 and $6 per gallon for gasoline - except the Netherlands, where it's $6.41.

You want to discuss taxes, talk to a Swede. Or a Frenchman. They pay the taxes, and they get the services.

So maybe the citizens of California are getting exactly the legislators they want. Sigh. I wonder how long it'll take all of them to grow up and realize that the money isn't going to fall out of the sky to fix this - even with what we're getting from the Obama stimulus package.

California Budget - Proposition 1C

Of all the weird ballot propositions that came out of the California Lege's late budget standoff, I have the most trouble with this one. Data on the proposition in this post came from the San Francisco Chronicle's article on Proposition 1C today.

To begin with, I have serious reservations - and had at the time, I voted against the state lottery - about using gambling money to fund our education system. Our education system is a major and mission-critical investment for the future of this state, we should be funding it out of normal revenues. We as a state should not be profiting off gambling, which at its worst destroys lives.

The sad fact is that our state government regards the school system as a drag on it, and never misses an opportunity to cut education funding - as they've done in the current crisis. This is why, in case you wondered, California has so many ballot initiatives locking in education spending. It's because we can't trust the Lege (as Molly Ivins used to call it in Texas) to fund it properly.

Now they want to do two colossally stupid things:

1. They want to borrow $5 billion (that's with a B, folks) against future lottery revenues, and put the entire amount into this year's operating budget.
   
2. They want to remove the requirement that lottery money go directly to the schools. If this passes, schools will be funded from the general fund. They'll get "approximately" the $1 billion a year they get now, adjusted in future for inflation and student population.
   

What's wrong with this picture?

First, as far as I'm concerned, the lottery's only moral justification is to fund the education system. If we aren't using the money for education - and if this passes we won't be - then we should not be in the lottery business.

Second, they want to borrow money for operating expenses. This means the state will be paying down that $5 billion that we use to run the state this year, for the next thirty years, out of the lottery profits. The two objections to this are:

1. Borrowing money for operating expenses is colossally stupid (ask anybody who did a cash-out refi to finance a vacation, or a flat-screen TV), and
2. What happens if the lottery doesn't produce enough revenue to pay down the bonds? Nobody discusses this, but the proposal commits the state to pay $400 million a year for 30 years out of lottery revenues. But lottery sales have been "anemic," according to the article. Only addicted gamblers will buy lottery tickets if they're out of work; everybody else cuts back. And a lot of people are out of work. If the lottery doesn't produce that $400 million a year, who does? We do, folks. Us taxpayers.
   

Third, this is going to cut education funding. Again. The schools currently get about $1.1 billion a year from the lottery (that's all that's left out of $3 billion in lottery sales, after payouts and administrative expenses); so Prop. 1C will already remove $ .1 billion from the school allocation - that's $100 million, folks. And in future, the lottery profits will go into the general fund, and education funding will come out of the general fund. Yeah, sure it will. And increased as inflation and school population go up, too. Right. Just the way they always do.

There's an old military joke about the general who turns to his aide and says, "Bring me a rock." So the aide goes out, looks around, picks up a rock and comes back. And the general says, "Wrong rock." The legislature's carefully hammered solution to the budget crisis is the wrong rock. If we defeat these propositions, they'll have to have another emergency session to do it again; and I'm sorry, but I think they should. I can't support Prop. 1C.