News

Want to balance the budget? Roll up your sleeves, get to work

With our state currently facing a more than $9 billion budget shortfall, most Californians say a solution that mixes spending cuts and tax hikes strikes the right balance. According to a new poll commissioned by Next 10 and conducted by Field Research Corporation, 52 percent favor this kind of even-handed approach — making up half the difference by shrinking spending, and the other half by boosting taxes.

But where, exactly, should Sacramento trim? And should Californians consider paying more in taxes?

Focusing on how to balance the budget, when asked about K-12 education our poll found that a plurality of the Californians — 41 percent — argued for keeping per-student spending at its current level. Another 30 percent called for increasing education spending by $2.5 billion. Seventeen percent advocated cutting student spending by $2.4 billion, even if it could equal a shorter school year.

When it came to taxes and how to resolve the deficit, our nonpartisan poll showed that 20 percent of Californians said they’d keep income taxes where they are. 40 percent of respondents would raise state income tax rates by three percent for people earning more than $1 million a year, and by five percent for people making more than $2 million a year. 25 percent of those polled favored a tax increase in individuals making $250,000 or more and nine percent backed a quarter of a percent tax increase on all wage earners.

Governor Brown’s approach includes a mix of cuts to higher education and state health and welfare services. On the tax side, Brown backs a November ballot initiative that could raise $6.9 billion in new revenues. If that initiative doesn’t pass, the Governor proposes that “trigger cuts” would again go into effect.

Whatever the final outcome of the budget debate, we know that the decisions being made in Sacramento over the next few months will have repercussions for years to come on everything from the taxes we all pay, to our children’s education, to our prison systems. An overwhelming majority of Californians polled, 71 percent, said that budget decisions affect their families. That is why we created a tool for Californians to better educate themselves and understand the difficult trade-offs in the state budget process.

The latest edition of the nonpartisan California Budget Challenge (www.budgetchallenge.org) is launching this week, and offers a completely revamped way to understand budget policy options and what their impacts would be. The Challenge is a user-friendly online budget simulation that lets Californians decide if they want tocut or spend more on programs, or if they’d like to raise or lower taxes. The updated Budget Challenge includes new features that allow you to share your proposed solutions using popular social media tools and send your budget preferences to your friends, legislators and the Governor.

When contemplating spending and revenue decisions that directly affect people’s lives, one thing Californians and their representatives in Sacramento should keep in mind is that our economy is still damaged, though showing signs of improvement. While our unemployment rate is still the second highest in the U.S., new job numbers are up.  So are consumer spending and exports. California is attracting fully half of all the venture capital being spent in the U.S.  Our state is a national leader in a wide variety of sectors, from biotech to entertainment to software and agriculture. California is well positioned to prosper in the coming economic recovery. The budget decisions we make now—where to invest, where to save, and whether or not to raise or lower taxes—can affect the speed of that recovery, and shape our state’s economic future for decades to come.

I invite all Californians to roll up their sleeves and get involved in the outcome of this important process.

Ed’s Note:
Businessman F. Noel Perry is the founder of Next 10, an independent, nonpartisan organization that educates, engages, and empowers Californians to improve the state’s future. Next 10 funds research by leading experts on complex state issues.


Support for Capitol Weekly is Provided by: