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A Barbarian’s Budget

May 24, 2010

On May 14th, Governor Schwarzenegger released his May Revise budget proposal. In it, he proposed to completely eliminate CalWORKs, California’s welfare-to-work program which provides support to the children of single parents who are unemployed and looking for a job. While the proposal is only the start of what is always an arduous and contentious process of negotiation, Schwarzenegger’s proposal is both stupid and cruel, edging on barbaric. Here’s why the Legislature shouldn’t adopt the proposal:

  • Eliminating CalWORKs would make California the only state without a welfare-to-work program, resulting in what one expert described as “something approaching a Third World situation with children begging in the streets.” This outcome should be unacceptable to Californians.
  • While the Governor and Republican legislators have said that raising taxes would cause a loss of jobs, cutting CalWORKs would have a much worse effect on jobs than an equal amount of tax increases. A study (PDF) from UC Berkeley’s Center for Labor Research and Education shows that raising $1 billion of revenue through an oil severance tax would result in the loss of 300 jobs while a $1 billion cut in CalWORKs funding would result in the loss of 215,900 jobs. $1 billion in revenue raised by increasing taxes on the upper income households would result in the loss of 6,400 jobs. Reducing job losses should be one of the main goals of California government policy but the Governor’s proposal in reality does not pursue that goal.
  • Legislative Analyst Mac Taylor recommended that the Legislature reject the proposal to cut CalWORKs completely, pointing out that eliminating CalWORKs would result in the loss of $3.7 billion in federal matching funds, which would further exacerbate our fiscal problems.

Schwarzenegger says that California “no longer has low-hanging fruits.” This is true in terms of spending – the state’s social safety net, education spending and public services have been cut to the bone – but it completely ignores the other side of the ledger. Most people understand that there are two ways to balance a state budget, increasing revenue and decreasing spending. Schwarzenegger’s proposal only uses one of these options. There is low-hanging fruit, or at least lower fruit than CalWORKs. We should extend last year’s temporary tax increases, delay last year’s (inexplicable) business tax breaks and institute an oil severance tax like every other state before we cut our already-threadbare social welfare programs back to Stone Age levels.

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One Comment leave one →
  1. May 25, 2010 9:44 pm

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