CA Lawmakers: Kill the Poor, Disabled and Elderly So We Can Get Paid

California Gov. Jerry Brown has signed the state’s new budget, just in the nick of time so that lawmakers can finally get paid. Under the new budget, which cuts around $15 billion from social services, poor people will get less medical care and welfare, fewer services will be available for disabled people, state parks will close and students at the UC and CSU university systems will see their tuitions skyrocket.

The new budget passed because there were no new taxes, old taxes were allowed to wear out, Dems and Reps looked the other way as a bit of financial hocus pocus was scattered about, and the remaining deficit was pushed onto the backs of the state’s most vulnerable and politically marginalized residents. Specifically, the tax extensions that Gov. Brown so dearly wanted extended have been allowed to end, reducing sales tax from 8.25 to 7.25% and slashing the vehicle license fee (vlf) by 50%. The San Francisco Chronicle suggests that this will benefit the average Californian by $1,000 per year. However, for those with beaters or no cars at all, the slashing of the VLF will be negligible, whereas for those with Hummers, Caddies, Porsches and fancier vehicles, the decreased VLF will save them hundreds. Similarly, the savings from a declining sales tax will be much greater for big ticket items that the wealthy can afford, and meaningless for those who spend primarily on food and medicine. Thus, the middle class and wealthy will save some money, while the poor and working classes will save very little on the deal.

Meanwhile, the $83 per month average savings will result in havoc and death for poor people in the state. For example, under the new budget, people on Medi-Cal will be limited to only 7 doctor visits per year and, for the first time ever they will have co-pays for hospital and emergency room visits and medications, the Chronicle reports, thus dissuading them from seeking necessary or urgent care. The adult day health program, which serves 37,000 people, will be eliminated, forcing thousands into nursing homes. The In-Home Supportive Services program, which serves 436,000 seniors, disabled and blind residents, providing meals and hygiene, will also be slashed, reducing their home assistance by 16.5 hours per month, the Chronicle reports. Welfare recipients will be cut off after four years. The department that oversees services for people with developmental disabilities will lose $577 million this year, on top of $700 million two years ago. The CSU and UC systems will lose $650 million each, bringing tuition to over $12,000 per year at UC schools, and up to nearly $6,000 per year at CSUs.

Even for the cynical, selfish and greedy, these cuts are far worse than they would seem on paper. Many of the cuts to healthcare, for example, will result in the loss of federal matching funds, thus doubling their negative impact. Furthermore, billions of dollars of federal stimulus funds that boosted Medi-Cal are set to run out tomorrow. According to the Chronicle, the stimulus funds added an additional 12% to the matching funds, so that for every 50 cents California spent on Medi-Cal, the feds chipped in another 62 cents.  People without health services tend to ignore treatable and chronic conditions until they need emergency services, which results in thousands of preventable deaths and ends up costing tax payers far more in the long run.

The Student Debt and Default Crisis

Empty Your Pockets by xJasonRogersx

Americans now owe more on their student loans than they do on their credit cards, $880 billion. The cost of a college education is rising faster than the cost of medical care, and almost three times faster than consumer prices. For the class of 2009, the average debt was $24,000. This does not include loans from parents and family, or the cost of graduate school, which can bring the total debt to $80,000 or more.

Alan Collinge, founder of StudentLoanJustice.org, says the student loan crisis is potentially far worse than the mortgage crisis. There is no walking away from student loans. They have almost no consumer protections and are difficult to refinance. By law, they can’t be wiped out in bankruptcy, a change that imposed in the wake of the last student loan crisis in the 1980s.

Not surprisingly, the debt and default crisis is worse for students at for-profit colleges and universities. In fiscal year 2008, the national default rate for student loans was 7%. The rate increased from 5.9 to 6% for public schools and from 11 to 11.6% for for-profit schools. In 2008-9, students at for-profit schools represented 26% of all borrowers, and 43% of all defaulters.

At Kaplan University, they used a sleazy technique dubbed “Guerrilla Registration” to enroll thousands of students in online classes they never took, without their consent, and sometimes even after they tried to withdraw from the university, and then charged them for the classes. As a result, some students incurred debts of thousands of dollars for classes they never took. The longer students are enrolled, the more financial aid dollars the university receives from the federal government.

A group representing for-profit colleges sued the Education Department on Friday to block new rules relating to how the schools pay recruiters and how they represent themselves to prospective students. The suit was filed by The Association of Private Sector Colleges and Universities and represents 1,400 for-profit schools, including Kaplan. The rules would prohibit schools from paying recruiters based solely on how many students they enroll and strengthen federal authority to punish schools that engage in deceptive marketing. The suit seeks to halt these regulations.