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February 19, 2009

The California Budget Agreement

-- by Dave Johnson

Dave Johnson, Speak Out California

California finally passed a budget. It is a bad budget, cutting essential services, borrowing a tremendous amount, selling our lottery revenues and giving a huge tax break to big out-of-state companies. Each of these came from demands by the very, very few Republicans who agreed to vote for the budget at all will, of course, just get us through another year while making it ever more difficult to pass future budgets.

California's 2/3 requirement means that a few corporate-funded extremists can hold the rest of us hostage. So they had to make a terrible deal to get the three Republican votes required by the 2/3 rule, or else lay of tens of thousands and stop paying California's bills. We the People of California were all held hostage to that threat.

The resulting deal was that if We, the People want schools, police, firefighters, roads & bridges, courts, all the things our government does for us, we had to agree to tax breaks for the big multinational corporations that kick in so much money to help elect the anti-government extremists. So the big companies - the kind that come in and crush local California businesses - get a big tax break while the rest of us have our taxes raised. Oh, and the oil companies can continue to take our oil out of the ground for free and then sell it back to us.

Here are some reactions around the California netroots:

David Dayen at Calitics,


"The cuts are going to be really, really bad: 10% across the board for education, huge cuts for public transit operations, health care, etc. The new revenues basically fill in the loss of revenue from massive unemployment.

[. . .] The "single sales factor apportionment," which is the massive business tax cut, doesn't kick in until FY2011, predictably and conveniently after Gov. Schwarzenegger is out of office and it will be someone else's problem to make up the revenue! It's almost like somebody planned it that way!"

Richard Holober at Consumer Federation of California,

"The deal reported today does not call on all California taxpayers to share in the sacrifice. Working Californians will face billions in higher sales tax and income tax rates. But businesses win about one billion dollars in new tax breaks. $700 million in corporate tax cuts result from a recalculation of how California taxes the profits of big multinational corporations. According to the Senate Analysis, the windfall to multinational corporations, and the revenue loss to California will eventually grow to $1.5 billion."

Robert Cruickshank at the Courage Campaign blog,


"The only way out, and the first reform that we must undertake - the tree blocking the tracks, the door that opens the path to all other reforms - is eliminating the 2/3 rule that gives conservatives veto power over the state and turns the majority Democrats into a minority party on fiscal matters. It's been talked about frequently on Calitics and in what remains of the media's coverage of state politics. So it seemed time for an in-depth discussion of the issue and the prospects for restoring majority rule to California."

David M. Greenwald at California Progress Report,

"Many Democrats and political observers fear that Maldonado strong-arming the legislature may set a bad precedent for future attempts at getting a budget on time."

So here we are. Our structural problems have enabled extremists to increase ... our structural problems. We are one more step down the road to intentional ungovernability.

Over the next several months, we who love this state must act to fix this. We must get rid of this 2/3 budget-vote requirement that allows extremists to hold us hostage. An initiative changing the 2/3 vote requirement is long-overdue but we'll need the support of every forward-thinking voter to make it happen. Let's work together to ensure that it does.

Click through to Speak Out California

Posted by Dave Johnson at February 19, 2009 3:48 PM


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