California's Budget: On Time and Balanced!

Practically lost in the shuffle of last week's news was the passage of the California state budget--balanced and on time.  The legislature met the constitutional June 15 deadline a day early on Friday, June 14, then convened a rare Saturday session on the 15th to pass the "trailer bills" needed to implement the $96 billion spending blueprint. 

This is a big deal.  The state budget had not been passed on time for thirty years before this.  For decades, state employees and many local government workers like police and teachers had not known for months whether their jobs would continue or they would be furloughed, losing indeterminate amounts of their income.  People depending on services would not know whether those services would be there for them when needed.  Businesses would twist in limbo for months, uncertain about whether things like water and transportation would be available and at what rates, or whether their contracts would be continued, reduced or cancelled. 

But this year things went swimmingly.  I'm predicting they will continue to do so most of the time from now on.  Credit for this happy state of affairs goes primarily to two deserving recipients: the voters of California and Governor Jerry Brown.  The legislature gets a little provisional credit, which is contingent on how they do next year. 

Here's the explanation:

The people get major credit for passing Proposition 25, the Majority Vote Budget Initiative, in November, 2010 by a 55%-45% margin.  The initiative made California the 48th state able to pass its budget by a majority vote of the legislature.  It had required a 2/3 vote up to then.  No longer could the Republican minority hold up the budget's passage with 30 votes out of 80 in the Assembly or 15 out of 40 in the Senate.  Prop 25 also provided the additional incentive that the legislators' paychecks would be withheld and they would be docked for every day it was late.

The voters also get big credit for helping actually balance the budget by passing Proposition 30 in November 2012.  The extra revenue made a balanced budget a realistic feasibility by raising $7-9 billion in revenue with a 1/2 cent sales tax hike and a 1% to 3% increase in upper-level income taxes.  In the past, the Republican minority would insist on tax cuts in exchange for having a couple of their legislators vote for the budget.  The resulting revenue cut would put the budget out of balance and necessitate more cuts the next year.  It actually put the minority in charge of the budget process, since they could hold the majority hostage with just a few votes. 

Governor Jerry Brown deserves a lot of credit too.  He has refused to let the legislature get away with passing on time but unbalanced budgets, as they attempted to do in 2012.  Brown refused to sign that budget and Controller John Chiang held up their paychecks until a real budget was sent to the governor's desk.  This year, thanks to his firm stand last time, the lawmakers thus knew Brown meant business and they passed a real balanced budget actually on time.  Brown's insistence on making the tough cuts necessary built not only credibility with the legislators, but trust with the voters, who then helped out by raising their own taxes to close the rest of the gap.          

It's a real success story of intelligent steps taken by the people combined with firm leadership at the top of state government.  Two thumbs up for a job well done!  

  

 

Young Voters Show Power in California for Proposition 30

It was with tremendous relief that I woke up Wednesday morning and learned that California's Proposition 30 passed with 54% of the vote.  When I went to bed Tuesday night it had been trailing by four percent.  I knew that if it failed it would result in an additional $3 million in cuts to College of the Sequoias where I teach and the cancellation of hundreds of classes our students need.  We are already serving 3000 fewer students than we did five years ago and are the only institution of higher learning in our predominantly rural vicinity.  For those of you who don't know, Prop 30 was Governor Jerry Brown's initiative to impose a 1/4% sales tax for four years and a 1% to 3% income tax increase on upper income earners for seven years to raise about $6 billion per year, 98.5% of it for education.

I am grateful to the voters of California, and especially to the younger voters.   This proposition became THE great cause for college students in California this election.  At COS our Associated Student Body and Young Democrats campaigned very hard for it.  They secured 600 student endorsement signatures in two hours to fill a full-page newspaper ad the teachers ran in support of Prop 30 last week.  They registered hundreds of voters and made sure they voted by mail or on election day.  This effort was repeated across the state and produced an amazing result.

As Scott Lay, President of the Community College League of California, reported in his newsletter under the title "Winners:"  

Young voters - I know I've been harping on this. Polling firms undersampled 18-29 year old voters through the cycle, particularly after Prop. 30 became a rallying cry on campuses. In the last four presidentials, 18-29 year olds have ranged from 15% (1996) to 22% (2008). So, why were they only expected to be 12% of the California electorate in Monday's Field Poll projections? In the end, the exit poll found that 28% of California's electorate were 18-29 year olds. And, with their 63% yes vote on Prop 30, they single-handedly put Jerry Brown's tax measure over the top. This also led to a 1.9 million 20-point margin for Obama in California that ensured that he won the national popular vote.

In addition to Scott's analysis above, when the dust settles I expect it will be shown they also had a great deal to do with Democrats securing 2/3 supermajorities in both houses of the state legislature.  Pretty impressive, wouldn't you say?  Who says young voters are apathetic?  Give them an issue that strikes close to home and they proved they are very much a force to be reckoned with.

Budget Woes Spark Challenges at Work

Here is a piece I submitted to our local newspaper yesterday.  In difficult budget times where I teach, how have contentious negotiations played out?  How will it affect students?  Here is my take.

After reading two recent pieces in the Times-Delta’s Opinion section, I felt the need to set the record straight on how things really are at College of the Sequoias.  One was an editorial urging the Board of Trustees to implement a benefits cap on faculty to save money.  The other was a letter imploring faculty and administration to work together for the good of the students rather than let difficult contract negotiations get in the way.

I am currently in my thirtieth year of full time teaching and my fourteenth at College of the Sequoias.  Counting a couple of years as a substitute when I was starting out, it adds up to thirty-two years of teaching.  That includes time at adult school, high school, middle school and community college.  I bring this up to underscore the point that although I have found a high level of dedication and professionalism in all the levels and settings of education I have been in, none exceeds my experience here at COS. 

Whenever there are money problems in a school system there will be disagreements between employees, administration and boards.  I have seen them before in other districts and here, and I expect to see them again.  When revenues are reduced at the college level it means fewer students can be served.  COS is serving some 3,000 fewer students now than when finances were better.  Summer school has been eliminated the past two years.  Programs and people have to do with less.  Sometimes people are financially hurt.  Where and whom to cut are contentious issues.  I have served on the teachers association bargaining team for the past two years and can attest that at COS, contract negotiations between the District and the employee unions representing both the faculty and the classified staff have been long and trying for all concerned.  

As far as the health, vision and dental benefits cap goes, as reported in this newspaper, the Board acted to impose such a cap at their last public meeting.  The faculty and classified associations have been willing to and have proposed many ways of saving the District substantial funds, including salary and other concessions in the amounts management felt were necessary.  For tax and other reasons, their members have preferred these savings come out of things other than benefits.  At one point, faculty even ratified a tentative agreement in which they would have agreed to teach extra classes for free.  This would, if ratified by the Board, have saved the District over half a million dollars a year.  The amount of savings to achieve was never the point of contention; the manner in which they would be exacted has been the issue.  It is clear the Board’s judgment has been that only the benefits cap was acceptable as a way to achieve these savings.  The employee associations have believed there are other ways to accomplish the same goal.  I personally feel that everyone involved has been sincere in their views, and concerned with the financial condition of the District in trying times.  Unfortunately, the District’s insistence on the cap has indeed caused exasperation and been a source of frustration among employees at the college.         

Yet on the other topic, despite such disagreements, the parties have continued to work together to serve students in a highly professional manner.  Community members who have taken courses at COS, or those whose children have, will confirm what I have seen since I arrived here: the quality of the faculty and their dedication to students is exceptional.  As Academic Senate president I got to know and work with most of them, not only teaching faculty but also counselors, work experience technicians, technology and curriculum specialists and librarians.  And I extend this to include the adjunct, or part-time faculty as well, many of whom are experienced local high school teachers or highly skilled professional and vocational practitioners presently in business in the area.

But in a larger sense, I have found this same standard of responsibility across all the staff at COS.  The truth is, the COS family is full of good people who take seriously their service to students and the institution and work collegially to get things done.  That includes the classified staff who do their part to keep things running smoothly in such fields as maintenance, computer services, registration, financial aid, food services, the bookstore, student life, payroll, copy and mail, our police officers, secretaries and many others too numerous to name.  Our administrators have the often thankless task of monitoring and leading programs that are expected to achieve consistently improving results with shrinking budgets and fewer personnel.  They are highly competent people.  Our Trustees are all respected community members strongly interested in expanding the educational opportunities COS offers but keenly aware of their fiduciary responsibility to the financial condition of the District in these challenging times.  They are conscientious public servants.   

I know practically all the people behind the titles I’ve mentioned on a first name basis and believe all are working sincerely to help the school.  The advice to stop bickering and help the students misses the point.  The fact that contract talks have been tough has not stopped the COS family from working together and putting students first.  For example, I recently served on a committee working on the Accreditation process the college goes through every six years.  A fine administrator and I jointly chaired our part of this effort.  Our committee included not only administrators and faculty, but classified (non-teaching) staff, students, and one member of the Board of Trustees.  Everyone worked as a team for the good of the school.  In another example, the Teachers Association recently got together with the Academic Senate to ask faculty to expedite a number of curriculum issues critical to students meeting their program and graduation requirements.  To teachers, students are not just enrollment figures or names on a sheet.  They are people whose names and faces we know, people who, though often contending with numerous obstacles, inspire us with their personal stories and dreams and the efforts they are putting forth to achieve them.  We will not let them down.

Steve Natoli

Yes on Proposition 30

Californians should do the right thing and vote yes on Proposition 30 this November 6.  The passage of Proposition 30 will not only staunch the disastrous litany of cuts to education and public services, but will also finally enable the state to balance its budget.  Go to the complete official explanation of Prop 30 on the Secretary of State's website here.

If Proposition 30 does not pass the state will be forced to cut an additional $6 billion from education next year.  That's on top of $20 billion in cuts over the past three years.  The cuts would include $500 million to the University of California, $750 million to the California State University system, $300 million to the community colleges and $4.5 billion to k-12 schools.  We have already laid off 30,000 teachers in the state, with the resulting increase in class sizes, and losses in such classes as languages, the arts and vocational offerings.  On the Community College level alone it has meant the denial of access to college for 485,000 students per year.

Proposition 30 would forestall these added blows to our childrens' education at a surprisingly modest cost.  Prop 30 would increase the sales tax by 1/4 of a percent for four years.  That is the total impact 99% of Californians would see on the revenue side.  A $100 pair of shoes would cost 25 cents more.  A fancy $1000 hi def flat screen TV would cost an extra $2.50.  Even a nice $20,000 new car would only cost an extra 50 bucks.  Most people wouldn't even notice.  For people at the highest income levels, an additional 1% income tax would be assessed for joint filers making $500,000 to $600,000, 2% for those making $600,000 to $1 million, and 3% on incomes over $1 million.  In other words, an adjusted income after deductions of half a mill would pay an extra $5,000 a year.  These levies would expire in 7 years.

We can continue providing our children less and less education while our international competitors, particularly in China and India, ramp theirs up.  We can continue turning away hundreds of thousands of young men and women from the college degrees that will give them an opportunity for a middle class standard of living.  Or we can, for a very modest cost, address these crucial needs and balance our state budget at the same time.  The choice is clear and obvious.  Vote yes on Proposition 30.  

California Budget: Let the People Vote

The California Legislature's Republicans should let the people vote on Governor Brown's plan to balance the state budget. Their excuses for not doing so have grown embarrassingly threadbare of late.

In order to balance the anticipated $25 billion shortfall in the state budget, Democratic Gov. Jerry Brown has proposed that it be done with $12.5 billion in cuts and $12.5 billion in extending taxes that were passed as part of the 2009 budget settlement. Brown needs two Republican votes in each of the state's Senate and Assembly because a legislative initiative requires two-thirds to pass, as does a tax increase according to Proposition 13. Thanks to the passage of Proposition 25 last fall, the Democratic majorities in both houses could pass a budget, but it would have to be all with cuts if the taxes are not extended. Brown promised in his campaign there would be, "No new taxes without voter approval," and he is sticking to that. So why not let the people decide for themselves?

The first excuse Republicans come up with is that, "the people would not support that." They obviously don't believe that themselves, or they would let the vote take place to prove they had the people on their side. They have been reading the California Field Poll taken this month that shows strong majorities in favor of the public vote and in favor of approving Brown's plan. Their stance on this fools no one.

A second excuse Republicans cite to deny the people a voice is that many of them have signed Grover Norquist's national no-tax pledge. They seem to forget the fact that they are elected to solve California's issues, not lock themselves into inflexible positions based on the directives of a Republican operative from Massachusetts. As Governor, even the conservative Republican Ronald Reagan supported and signed the biggest tax increase in California's history up to his tenure, and also agreed to eleven federal tax increases as President.

A third excuse often cited Republican legislators is that they have not had sufficient input into the plans. If their views are unknown it is only because they have not presented them. They have had nearly five months since the election (an election in which they lost every statewide office, 52 of 80 Assembly seats and 25 of 40 Senate seats) to present a plan for the state budget. Yet they have not done so. They talk of cuts in general but lack the courage to specifically state where they would hack another twelve and a half billion from state spending. They are aware that the same Field Poll referenced above shows the people oppose any further reductions in education and favor them only for prisons and courts. There is, of course, no way to come up with that much money from those two programs alone. As the Fresno Bee editorializes of the GOP, "They don't have the courage to support tax extensions. And they don't have the courage to put forth an all-cuts proposal." Instead, they simply say no to any proposed solution, hoping they can then blame someone else when problems go unsolved. They prove themselves bereft of either the vision or the fortitude to lead.

Fixing California's 2010-2011 Budget

Here's your latest chance to solve California's state budget imbalance. A site called Next 10 has a clear and thorough program with plenty of good explanatory data to help you make up your mind. The site has been updated with new figures since I was on a panel last October that invited the public to try their hand. You can access my earlier blog on that here. I actually found it was easier for me to balance the budget this time than it was four months ago.

The Next 10 scenario takes you through options issue by issue, first for expenditures and then for revenues in your quest to balance a budget that starts out $19.4 billion out of kilter. (The $25 billion figure you may have read about is for a year and a half.) You typically have three or four choices on each issue, usually including a status quo, one that makes the deficit worse (either through raising spending or cutting a tax), and one or two others that offer spending cuts or tax increases.

Be sure to read the Overview, including the "Frequently Asked Budget Questions" at the beginning to get a good handle on how things in the Golden State stack up. You may be surprised at what you learn. The information is presented concisely and there are some illustrative graphs and pie charts to give you a visual picture too. The whole exercise took me only 10-15 minutes.

If you try your hand at it I look forward to your telling us how you did it and your reactions to the process. I do hope you will chime in with a comment. (You may need to be using Firefox rather than Explorer to comment on the blog. And I do have to moderate and OK the comments to appear after having some spamming trouble.) As Governor Jerry Brown says, California, with a $2 trillion economy and roughly a $20 billion state deficit, has a 1% problem. There are some tough choices to be made, and you can't reasonably do it with only program cuts or only tax hikes, but it is quite doable. Give it a try!

California Budget Challenge

I'd like to invite you to the next public forum at 210 Connect, the monthly public affairs presentation that's sponsored by the Visalia Times-Delta and held at the 210 Center in downtown Visalia. I'll be on the panel. It's called "The California Budget Challenge: The People Show the Politicians How." Times-Delta Opinion Editor Paul Hurley will emcee the event that goes from 7:00 P.M. to 8:30 on Monday, October 11 at 210 Center Street. Also on the panel with me will be fellow COS Historian Stephen Tootle, COS Economist Christian Anderson and Tea Party member Deanna Martin-Soares.

A California budget program will be projected on the big screen. You can preview it and try to balance the budget yourself by going to ww.next10org/budgettool/site/thesim/flashcheck.html. There will be audience discussion and the people will vote on things, item by item. We panelists may be asked to comment from time. As the simulation makes clear, balancing the state budget is not an easy task. Try it yourself and see. Still, it is possible and I've done it a couple of different ways.

The important thing to me is to think long term instead of short term. For instance, Governor Schwarzenegger is reportedly going ahead with his shortsighted plan to sell an estimated $1.3 billion in state-owned buildings to help bridge the current deficit. The plan is foolish because state agencies would then need to lease them back from the private owners, and the 20-year cost has been estimated to be $5.2 billion in rent. Source. That's what I mean by short-term thinking winning out over responsible long-term planning. Sometimes you need to spend or invest now to save in the long run. It seems few look at things that way any more.

Anyway, come on out if you're free Monday night and we'll have a stimulating and hopefully instructive evening.