Governor’s budget kicks California when it’s down

Last week, Speaker John Pérez and I unveiled the California Jobs Budget – a smart and credible alternative to the Governor’s May Revision plan because it actually creates jobs, leverages federal dollars and avoids short-sighted cost shifts.  It is a focused, clear strategy for retaining and creating private sector jobs that will strengthen the economic recovery just beginning in California, and lay the groundwork for continued economic expansion in future years.

At a time when the California economy already is contracted to levels unseen in many of our lifetimes – with 12.6 percent unemployment and 2.3 million Californians out of work – we cannot accept the Governor’s budget plan that would add 430,000 persons to the ranks of the unemployed, and potentially raise the unemployment rate to a stunning 15 percent of those eligible to work.  The Assembly plan rejects these job-losing cuts affecting teachers, small business owners, health care workers and just about every facet of work in our economy – and refocuses the state budget on job creation.

 The centerpiece of our plan is a $10.1 billion Jobs and Economic Security Fund that will support targeted jobs initiatives that prevent further layoffs by private employers, small businesses, local governments and schools, and maintain critical employment services and training programs that get people back to work.  It is a long-term strategy designed to break out of the destructive pattern of budget “solutions” that have only exacerbated our budget problems.

 The Jobs and Economic Security Fund will be funded by securitizing the beverage container recycling fund and dedicating a new oil severance fee to the fund to ensure that it will continue to provide hundreds of millions of dollars for job creation in future years – actions that do not add one penny to the state’s current bond debt.

 Our Jobs Budget does not raise taxes on any California taxpayers, except for the handful of companies that profit from the extraction of one of California’s natural resources – oil.   California, the third largest oil-producing state after Texas and Alaska, is the only oil producing state in the union without an oil severance tax. Even oil drilled just three miles off our coast is subject to a federal oil severance fee of 12 percent.  The proposed oil severance fee will be less than Alaska’s 20 percent and Texas’s 10.4 percent.  In addition, our plan delays by three years the new corporate tax reductions – some would say giveaways – worth $2.1 billion, allowing the economy to recover before they are enacted.

 It is impossible to talk about jobs and our economic future without also talking about education.  On this point, again, the Governor moves in the wrong direction.  The Governor’s backward-looking plan leaves California 48th in the nation in per-pupil spending – at a level not seen since 2007-08, and it contains a slight of hand to lower the guaranteed spending level for schools provided by Prop. 98.  In contrast, the California Jobs Budget moves in the right direction by increasing education funding by $5.9 billion, including an increase in per-pupil spending of $750 more than the Governor proposed, and rejecting his legally questionable lowering of the funding guarantee.

 We do agree with the Governor on restoring $600 million in previous cuts to higher education in the University of California and the California State University systems, and our plan reflects this priority.  No economic recovery can be successful without a serious commitment to investing in an affordable college education to prepare tomorrow’s workforce for the jobs of the future.  Our plan goes further than the Governor’s, providing an additional $275 million to lower by one-half the proposed fee reduction to UC and CSU, and $100 million for job training at the California community colleges.

 In terms of the budget process itself, we have made transparency and openness a cornerstone of our budget process so far this year.  We will reject the now common practice of negotiating large parts of the budget behind closed doors.  In this spirit of transparency, we have held Budget Forums throughout the state; more than 1,900 people attended in person and hundreds more participated through an online webcast.  The feedback received from the public at these Budget Forums has been overwhelmingly in favor of the approach presented in the California Jobs Budget this week.

 The non-partisan Legislative Analyst’s Office (LAO) recently said that neither new taxes, nor deep cuts in spending are advisable in the current economic climate in California, and either or both of these approaches (broad-based taxes or spending reductions), if adopted, would send the state economy deeper into a downward spiral.  The California Jobs Budget tracks with the guidance of the LAO, and is a smart, credible plan that is balanced, does not rely on smoke and mirrors, and gets the job done.

 The California Jobs Budget preserves and creates the private sector jobs that are inextricably linked to the state budget, and does not raise taxes on the general population.  We respectfully invite our colleagues in the Senate, the Governor, and our Republican counterparts to join in this effort to make California into the job-creating machine and economic engine it once was and can be again.

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