Budget battle continues

As we go to press, estimates of California’s budget deficit continue to grow, and the state is about to run out of cash.

In our last issue we listed some of Governor Schwarzenegger’s December proposals for rescuing the state’s finances (see http://www.4children.org/issues/2009/
january_february/childrens_advocates_roundtable/)
In January, in his annual budget proposal, the governor added some more ideas:

• Allowing school districts to cut the school year by five days
• Putting a referendum on the ballot asking voters to help fill the budget hole by taking money out of Proposition 10 (which funds First 5) and Proposition 63 (which funds expanded mental health programs).

Take money from First 5?

In 1998 voters approved a 50-cents-a-pack tax on tobacco to fund programs for children under five and their families. The idea was that existing programs did not meet the need, so the law specifically says the money has to be used for new programs.

Now Governor Schwarzenegger wants to ask voters to take 60% of this money to fund basic Department of Social Services children’s programs.

What would be lost if First 5 funds were slashed? Each county makes its own plan for spending the money, but some of the services funded by First 5 include:

• Child care and preschool
• Early care and education quality improvement, including professional development for teachers and providers
• Health, dental health, and mental health care
• Parent education and support
• Home-visiting for at-risk parents
• Developmental screening and referrals
• Support for families of high-risk infants
• Family resource centers
• School readiness and early literacy programs

Take money from Prop 63?

In 2004 voters approved a 1% tax increase on incomes over $1 million a year to fund an expansion of mental health programs. Like Proposition 10, this measure required the funds to be spent on expanding programs, not paying for those that already existed. This income has funded a major expansion of mental health services: Prop. 63 now funds almost ¼ of the public mental health services in the state. The Department of Mental Health estimates that even these expanded services only reach 40% of the people with serious mental illnesses.

In addition to expanding services, Prop. 63 has funded

• Education to train the mental health workforce
• The inclusion of mental health clients and their families into planning and staffing county mental health services
• A new focus on prevention and early intervention
• Linking mental health services to communities, from partnerships with law enforcement to school-based outreach to promotora programs
• Providing supportive housing for people with serious mental health programs
• Providing services in Spanish, Laotian, Thai, Khum, Mien and Chinese

More initiatives?

• The governor has said he wants to put measures on the ballot that would require the state to keep a larger share of its income as a reserve fund and increase restrictions on using it, as well as one giving the governor the power to cut state spending in the middle of the year without approval by the legislature.
• The California Teachers Association is preparing an initiative that would add 1% to the sales tax to create a fund to be used for education, estimated at $5 billion to $6 billion a year.
• Advocates for public services are preparing initiatives that would reduce the requirement for passing a budget or new taxes from 2/3 to 55% (California is one of only three states that require a 2/3 majority to pass a budget and taxes).

Federal bailout?

The federal economic recovery bill is in the Senate as we go to press. Yes, it will include some money to help states balance their budgets. But it will not solve the whole problem in California, which has the biggest budget shortfall in the country.

What’s behind the budget mess?

The California Budget Project’s December 2008 report, “Uncharted Waters: Navigating the Social and Economic Context of the Governor’s 2009-10 Budget Proposal” (www.cbp.org/pdfs/2009/090129_uncharted_waters.pdf) outlines the causes, including:

1) The current economic crisis

• The amount of tax money the state expects to take in this fiscal year (July 2008-June 2009) has dropped by $31 billion since September! That’s because:
  
  *  Many people are losing their jobs, so they pay less income tax.
  
  *  People are cutting back on spending, so they pay less sales tax.
  
  *  Home prices are falling, so people pay less property tax.
  
  
• Meanwhile people need more help: More people qualify for food stamps, Healthy Families, and CalWORKs, for example.

2) Basic problems in the state budget

Less money

• Tax cuts passed in the last 15 years cost the state budget almost $12 billion a year.
• Sales tax income has dropped: because people spend more of their income on services (which aren’t taxed) and because they buy things online.
• Corporations are paying a smaller share. The share of their income they pay in taxes has fallen by almost half since 1981—and the current state budget cuts corporate taxes even more.
• Wealthier people pay a smaller share of their income in state and local taxes—and their share of all the income in the state has increased.
• The state has lost money it used to get from the federal estate tax.

Higher costs

• Interest on state borrowing uses up more of the state budget than it used to—its share of the state budget has more than doubled in the past five years.
• Spending on corrections has grown at nearly four times the rate of overall state spending since 1980-81.

Meanwhile

• Spending on welfare for families has dropped by 1/3 since 1996.
• California has more students per teacher than any other state.
• California spends less per Medi-Cal patient than any other state.

Push for paid sick leave

Action: Let your state legislators know your views on whether California should guarantee all workers a certain number of paid sick days.

Background: The bill to guarantee paid sick days got stuck in the legislature last year, but the Work and Family Coalition is back with an energetic campaign to make California the first state in the nation with paid sick days for all workers to use to take care of themselves or sick family members. (Now almost 40% of California workers have no paid sick days). The coalition promoting paid sick days includes the Labor Project for Working Families, ACORN, Parent Voices, the California Labor Federation, the Family Caregiver Alliance, 9to5 National Association of Working Women, and more. Coalition members will be visiting legislators and collecting endorsements and letters of support.

More info: 510-643-7088, www.paidsickdaysca.org

Childhood Matters has a new home

• Saturdays Live 9-10am, Green 960 AM
• Sundays Rebroadcast 7-8am K-Ocean 105.1 FM, Monterey County; 9-10am 1480 KGOE-AM, Eureka
• Streaming on www.childhoodmatters.org
• Join the discussion at 877-372-KIDS

This is a discussion show “for parents and all who care about kids,” hosted by experienced parent educator, Nurse Rona Renner. Tune in!

Look for

California’s Budget Gridlock:
Grandma Tells the Story

A 4-page comic book
in the May-June 2009
Childrens’ Advocate