Rich guv proposes cuts for workers, poor

The unfolding capitalist economic crisis is now hitting state budgets like an avalanche. The state of California, which alone boasts the world’s eighth-biggest economy, is a case in point. Despite its tremendous productive capacity in agriculture, mineral extraction, manufacturing, fisheries, tourism and more, and its abundant pool of skilled workers, politicians here are crying poverty.

On Jan. 15, in his State of the State address, Gov. Arnold Schwarzenegger declared that California faced “insolvency within weeks.” He is proposing Draconian cuts in the state’s budget that would hobble education; leave many elderly, blind and disabled people stranded; and cut off welfare to families if the parents fail to find work.

Looking for jobs in a Los Angeles employment office.

Union and community demonstrations in Los Angeles, San Diego and the state capital of Sacramento challenged the Republican governor’s speech. The day before, a State of the People assembly had been held in Sacramento.

Making the poor pay

While the governor claims he’s for expanding the state’s health-care system to cover almost all uninsured residents, he is proposing to cut as much as $1 billion from Medi-Cal, California’s medical-service program for the poor, elderly and disabled.

Schwarzenegger, who accuses his political rivals of wanting to “spread the wealth,” has plenty of it himself. His personal fortune was estimated at $800 million in 2006, according to San Francisco’s ABC-TV affiliate. That’s not counting the wealth of his spouse, Maria Shriver, who is also a multimillionaire and a member of the super-rich Kennedy family.

The last time California had a budget crisis, in 1991, it imposed an income tax on the wealthiest residents that lasted five years. Schwarzenegger opposes raising taxes on rich Californians like himself. Instead, he has proposed a 1.5 point increase in the state sales tax—a regressive move that puts the burden almost entirely on the workers and the middle class. Californians already pay a sales tax ranging from 7.25 percent to 9.25 percent, depending on the community. (www.taxfoundation.org)

The governor also proposes cutting K-12 education funding by $2.5 billion, and funding for the University of California and California State University systems by $132 million.

All these cuts also represent a huge attack on public workers and their unions.

Politicians maneuver to escape blame

Last summer Schwarzenegger attempted to unilaterally slash state workers’ pay to minimum wage. This anti-worker, anti-union measure was blocked by California Controller John Chiang, an elected Democrat. Chiang has also supported a union legal action to block the governor’s attempt to force state workers to take two unpaid days off per month and to close some state agencies for two days each month.

Chiang, however, is not opposed to state workers’ concessions or budget cuts, just the way they are implemented. He says he prefers that the state unions negotiate concessions in the same manner as the auto workers.

On Jan. 16, Chiang said that, unless the governor and state legislature agreed on a new budget, he would be forced on Feb. 1 to cut off “assistance for more than a million aged, blind and disabled Californians that goes to pay their rent, utilities or put food on their tables,” among other payments. (www.sco.ca.gov)

The social service payments to be withheld total $424 million. But California will be paying $826 million in a “legally protected” payment to the banks—debt service. That’s almost twice the cost of the social service payments. How many of these financial institutions profited from the feeding frenzy over mortgages and then received federal bailout dollars when the bubble burst?

Cutting off checks

According to the California Disability Community Action Network, recipients of Supplemental Security Income/State Supplemental Payment will receive their full checks in February and March. But programs not assured are Calworks, including Temporary Assistance for Basic Needs; Student Aid Cal-Grants; county administrative costs for Medi-Cal; and Alcohol and Drug Abuse treatment and Mental Health.

The months-long budget debate between the governor and legislature has ignored the primary responsibility of state governments: to provide for the welfare of the people.

California’s surging unemployment rate is now officially more than 9 percent. In 2008 about 21 percent of all U.S. home foreclosures were in California. Unemployed workers can’t afford mortgages or rent. When the sale prices of homes fall, the property tax revenues go down, too.

Instead of invoking legal precedent from the 1930s and issuing a moratorium on foreclosures and evictions that would immediately help workers and communities, the governor is bowing to the banks. They insist on being paid their blood-money interest before state funds are spent on anything else.

Democrats agree to slash budget

Is any side in the California budget battle providing pro-worker solutions? According to the Jan. 26 Los Angeles Times, a fiscal plan passed by the Democrats in the state legislature “proposed cuts [that] would mean that money for the state’s university systems would decrease. Transportation and schools would take a hit. Funds for regional centers that help treat developmental disabilities in babies and toddlers would decline. Cash to help the elderly, blind and disabled keep up with rising food costs would be slashed. ...

“None of these cuts has been enacted. But the fact that they ... have been separately backed by Republicans ensures that they will be at the top of the list when lawmakers finally decide how to bridge a budget gap projected to exceed $40 billion within a year and a half.”

At a Labor-Community Fightback Conference in Los Angeles sponsored by the Bail Out the People Movement on Jan. 24, Californians United for a Responsible Budget pointed out that at the same time the governor and legislature are attempting to cut education and public-works projects, a $12 billion prison construction plan is being pushed through.

Youths need jobs, not jails—especially Black and Latin@ youths who are disproportionately victims of the racist prison-industrial complex and dilapidated prison-like schools.