Monday, May 14, 2012

More Cuts for Cali, Even With Tax Increase

Gov. Brown Squeezing Blood From a Turnip
In January, Gov. Jerry Brown told Californians that if they didn’t pass his tax increase initiative in November, he would have no choice but to slash over $5 billion from public education. Since then, tax revenue has been much lower ($3.5 billion) than anticipated, prompting Brown to threaten much deeper cuts, even if his tax initiative passes.

The tax initiative would impose a regressive sales tax on all Californians, including the poor, in addition to a short-term tax increase on incomes of $250,000 or more. It is projected to generate $9 billion, which would have barely maintained the status quo before the latest projections, and hardly made a dent in the $20 billion cut from public education over the past 3 years.

The new round of cuts will likely target health and welfare programs. However, Brown is also expected to squeeze unions. According to the
Los Angeles Times, he has already been meeting with Yvonne Walker, president of SEIU local 1000, and he has been actively lobbying for cuts to public sector pensions. But the details of his proposed cuts have not been released, nor has the true size of the deficit, which some believe may be as high as $15 billion. However, one can predict some of his likely demands on the public sector unions: more furloughs, cuts to health care and pensions, layoffs and decreases in certain public services.

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