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California revenues fall short, prompting $1 billion in cuts and a push for tax hikes
The question since June has not been whether or not California would realize an extra $4 billion in revenue, thus avoiding a slate of automatically triggered budget cuts, but rather how much it would fall short. Figures released by the California Department of Finance on Thursday projected revenues for the 2011-2012 budget year to be $2.2 billion shy of the mark. Governor Jerry Brown preempted the report's release by announcing $1 billion worth of reductions aimed primarily at education. The budgets of the University of California and California State University were slashed $100 million each. A $248 million cut to K-12 school transportation, which makes California the first state to eliminate state funding for school transportation, has already sparked a lawsuit from the Los Angeles Unified School District.
All said and done, the cuts were much less dramatic than they could have been. An earlier report from the Legislative Analyst's Office, projecting revenues to fall $3.7 billion short, would have sparked $2.5 billion in cuts. Under these circumstances, many school districts would have reduced the school year by seven whole days. While public education advocates, teacher unions, and school districts will surely direct some anger Brown's way, they ought to recognize how the Governor is using dramatic budget cuts to garner support for a massive tax hiking initiative that they would certainly support.
About a week before announcing the triggered cuts, Brown launched an effort to increase both the sales tax and the income tax for those earning over $250,000 via a November, 2012 ballot initiative. He plans to include the $7 billion potentially raised by these new taxes in his 2012-2013 budget proposal, months before they even face the voters. Should they be rejected, though, the Governor is threatening another round of targeted cuts. When looked at through this lens, Brown's attempt to cast himself as the only adult in the room with the tenacity to make difficult decisions grows more and more laughable.
While California's education budget could use trimming, using divisive cuts as political theater to trick voters into raising taxes on themselves in the midst of a sluggish economic recovery is downright irresponsible. Brown has been busy building up his own straw man just to have something to tear down in his tax-hiking campaign. In the mean time, Brown has vetoed a performance-based budgeting measure, and all but given up on his own public pension reform plan. Cuts will be a necessary part of setting California on a sustainable fiscal footing. Using them only as a means of pushing tax hikes, though, lessens the odds of real budget reform.