Public Comment

The Dangers of an All-Cuts Budget

By Ariel Boone, Nik Dixit and Mia Pskowski
Thursday July 30, 2009 - 11:14:00 AM

Though it ends our embarrassing episode with IOUs, California’s new budget is a giant leap backward. 

To meet Republican demands, it categorically avoids taxes. Thus, it is left with only one option: cut, cut, cut. Unfortunately, such haphazard slashing does have consequences. Though Republicans claim to be fighting “waste, fraud, and abuse,” their plan will do real harm to real people. As it ignores revenues and relies on cuts alone, it will cripple even the most basic of services.  

For example, education will be placed on the chopping block. Our K-12 system, already 47th in per capita funding, will lose $4 billion. UCs, slated for a 9 percent fee increase, will also face the axe: together with CSUs, themselves looking at a 20 percent hike, they will be deprived of $3 billion. Far from investing in students, the budget throws them under the bus. It handicaps them in the emerging knowledge economy, tarnishing the future of our Golden State. 

Also under siege are cities and counties, from which the state is raiding $4 billion. Local governments need this money, and they will be devastated by its loss. They will be forced to reduce police, emergency, and fire services, and some may even file for bankruptcy. To avert this nightmare, 180 cities, from San Jose to Los Angeles, are actually considering legal action. 

But perhaps the most brazen cuts are aimed at social services. CalWORKS, our welfare-to-work program, stands to lose $528 million in the coming year. Healthy Families, which provides health insurance to low-income children, will be slashed another $124 million. Even in-home supportive services for the disabled will lose $226 million, forcing 39,000 off the system. 

Cutting these programs makes little economic sense. Since they qualify for federal matching funds, their removal would pull much-needed cash from our economy. For instance, Washington pays three-quarters of the cost of CalWORKS.  

Moreover, cutting them is morally questionable. These services, from unemployment to health insurance, are needed now more than ever. During a recession, the last thing we should do is shred our safety net. 

Though reductions were inevitable, Sacramento’s refusal to consider taxes was disappointing. Taxes fund valuable investments in our future, and we need them to function. While balance must be found, right-wing zealots went too far. They ignored new, common sense revenues which could have offset cuts and improved our outlook. Though such reasonable taxes were proposed, none were included in the final bill.  

One measure, supported by 75 percent of Californians in an April Field poll, would have placed a $1.50 fee on cigarettes. In addition to raising $1.7 billion, it would have reduced smoking and saved lives. Moreover, it would not have hurt businesses. Tobacco is a luxury item, not a business expense. 

Another proposal would have generated $1 billion by placing an “extraction” fee on oil drilling. Such a tax is not only reasonable but overdue—California is the only oil-producing state without one. The budget forgoes such a fee, sparing oil companies despite its call for shared sacrifice. 

The budget’s cuts to education, local governments, unemployment, and health care would be painful under any circumstances. However, they are especially so because they could have been mitigated. Reasonable, common sense fees on cigarettes and oil companies could have softened their impacts, all without threatening businesses. 

With a few modest taxes, we could have taken a balanced path. We could have used painless fees to minimize painful cuts. Instead, when forced to choose between services and cigarettes, we regrettably picked the latter. 


Ariel Boone is UC Berkeley Associated Students senator; Nik Dixit is policy director for Cal Berkeley Democrats; Mia Pskowski is magazine editor for Cal Berkeley Democrats.