There must be a better way of dealing with California’s budget crisis and $8 billion deficit than by laying off teachers as part of an across-the-board 10 percent spending cut. Our schools are in a pretty sorry state as it is due to inadequate funding. Many teachers that I know have to supply their students with classroom necessities and pay for them out of their own pockets. Now many of these dedicated educators are going to be getting their pink slips.
The Democrats have floated the idea of a new oil tax to raise $1.2 billion annually for public schools. Of course, such a bill has no chance of getting the required two-thirds majority, and even if it did, the governator would veto it.
There is also the question of how we are going to pay for our crumbling highway and road system. We need $160 billion to fix problems throughout the state, but only $20 billion in bonds has been approved. Santa Clara County is $20 billion short of what we will need to effect county road improvements over the next 30 years. San Jose needs $500 million just to fix city streets and get the city system back in good order. Furthermore, we need to make up an annual shortfall of $29 million for routine street maintenance. The federal government is only covering 40 percent of what it needs to spend across the entire national system (thanks in part to Bush’s idiotic wars of aggression). The value of the dollar has fallen to new lows, adding to the rising prices, and the gas tax hasn’t risen with inflation and costs and isn’t bringing in enough to pay for all this. In addition, the rising price of oil has more than doubled the cost of asphalt.
So, why not tax the oil industry? They have made record—obscene to many of us—profits exploiting our national resources in the past couple of years while prices for their products have soared. The departing CEO of Exxon got a retirement “package” worth more than $500 million to add to his no doubt already bloated bank account. There are similar stories for other industry executives. What the hell is one person going to do with that kind of money? What are the oil companies going to do with their huge profits? How much is enough? Taxing the enormous profits of these greedy companies (many of which have a major portion of their operations registered offshore to avoid U.S. taxes) to pay for education and the transportation infrastructure that is necessary to their line of business seems like a justifiable solution.
If anyone out there has a better idea, I’d love to hear it. There is trouble ahead for us all if we don’t fix this. What are we going to do about it?
How many times do we have to hear the same ridiculous statements over and over again? i.e.
-Public schools need more money
-Profits are bad
-Oil companies are evil
-Take money from people who create it because nobody should have that much.
-Companies should stay in places that tax them
Give me a break.
Whenever “education” budgets get cut, they cut teachers and “non-essential” programs.
They need to be cutting the bloated staffs in the gazillion different district offices throughout the state. We don’t need a gaggle of deputy and asistant superintendents at $150k each. We need teachers.
But the idea of district supts. cutting themselves and their direct minions is absurd to district leaders.
Jack –
Implementing targeted tax hikes like this is one of the key reasons California is in such a budget crisis today. Supporting California’s needs on the backs of a small percentage of individuals, industries, or even specific companies is plain and simply put, bad tax policy. I agree that the state needs to address serious problems like education and transportation funding, but doing so on the backs of any particular industry (regardless of ones distaste for or political socialism views) just exacerbates the structural problems of the state’s budget.
Oil companies and their corporate executives are not responsible for the state’s budget shortfall. This sitution has occured through years of state overspending, lack of prioritization, and failure to address the structural fallacies inherent in the existing tax system. Oil may not be the popular group of the day, but asking them or any specific group to pay for the state’s errors “just because they can” sets us up for future and more catastrophic failures.
What is the solution? I don’t pretend to have the specific plan, but instead of pitting one sector of the community against another, we should be looking at broad based solutions that will make everyone a responsible stakeholder in the future of our state.
Final note: The oil tax bill voted down yesterday would likely have shortsightedly crippled California’s smaller/independent oil extracting companies (a large minority in this state), boost foreign-based profits and further endangered the welfare of the US by increasing dependence on foreign oil and indirectly contributed to the raising of gas prices at the pump for everyone in the state, crippling all industries and all average consumers alike who rely on gas to move themselves, parts and goods throughout the state. Let’s stop the finger-pointing and demagoguery and start looking and real solutions.
If there is a teacher layoff at least those newly-unemployed educators will have their beliefs to comfort them in the absence of a paycheck. Imagine how miserable they might be filling out unemployment forms if they hadn’t always been staunch supporters of illegal immigration, valiant opponents of ICE investigations, and harsh critics of anyone “hateful” enough to warn of dollar-and-cents realities.
Surely you remember those haters: the taxpayers who refused to believe that our state could afford to provide education, health care, and correctional facilities for the uncontrolled millions of immigrants pouring over our borders; the taxpayers who screamed bloody murder about the neglect of our infrastructure as funds were rerouted to systems failing under the strain; the taxpayers who knew the moment the money ran out a frantic search would begin for some new tax source deserving the wrath of the enlightened.
Today’s new demon is Big Oil, an industry that had the bad judgement to remain profitable after all the other bubbles burst. It didn’t seem to have demon status when the state’s coffers were flush, back when tech was booming, houses were flipping, and incomes soaring. I guess all that’s required to become a target of crusading liberals is they be given enough time and power to deploy their ruinous ways.
Mr. Van Zandt, please stop pretending that your appeal for answers is an open call, the only solutions you want to hear are those that slay your demons and soothe your sensibilities.
The governor and state legislature need to approach the budget problem by balancing all sides of the equation – education, infrastructure, taxes, economic vitality and environmental concerns.
For over forty years Dolly Parton has used this “big picture” formula for her live performances. Dolly has always balanced her soprano voice, sense of humor, attractive costumes, backup musicians, stage lighting and large bosom to provide a high quality show.
If our elected state officials approach the budget crisis the way Dolly Parton performs during concerts, then we can have a state budget we can all be proud of.
#4
Implementing targeted tax hikes like this is one of the key reasons California is in such a budget crisis today.
Prop 13 is why CA is in such bad shape today.
The basic premise of your posting today makes me sick.
The fact that there are people out there who think they should facilitate what industries/companies/people should have money taken from them, and who has money handed to them, represents everything wrong with the political system.
The arbitrary nature of it is disgusting, even if the cause and intention is good.
#3: To the immediate proglem – How does a mid-size district facing $4 million in cuts solve the problem by getting rid of 3 $150K administrators? Unfortunately, teachers must be part of the mix.
#6: California is the only oil producing state that does not impose a fee on oil extraction. Even Texas has that fee.
To everyone who is so upset by the specific solution in yesterday’s bill, the point wasn’t the specific solution but an attempt to try to find any solution. If oil taxes are off the table, what is your solution? The silence means that you support the 10% cuts to education unless you can propose another way to bridge the gap. I’m not hearing any solutions, just more “no.” That won’t solve the budget crisis.
“Prop 13 is why CA is in such bad shape today.”
Prop 13 was 30 years ago, and passed because voters were sick of runaway taxes. People still blaming prop 13 for the state’s budget problems need to get over it.
Mark Gregory #4 is correct. Let’s not beat up on the oil companies, because all that taxing them will is drive up our costs. It will not address the fundamental problem of bloat in government. John #3 is also correct saying “They need to be cutting the bloated staffs in the gazillion different district offices throughout the state. We don’t need a gaggle of deputy and assistant superintendents at $150k each.”
#9: The problem with $150K administrators is that they’re not needed and their cost is probably more than double $150K…for as long as they live.
How about this for a a solution: Those on the receiving end of governement money can’t vote.
#10
Prop 13 was 30 years ago, and passed because voters were sick of runaway taxes. People still blaming prop 13 for the state’s budget problems need to get over it.
Your logic, or lack of it, makes no sense.
Thirty years of postponed road maintenance, thirty years of reduced funding to schools, thirty years of reduced revenue to local governments, and thirty years of shuffling reduced tax funds between accounts in an attempt to “find money” is catching up with us.
Sticking your head in the sand solves nothing.
Responsible working citizens live and spend within their budgets. That is what our state and city governments should also do. Passing bonds to spend money for whatever the reason is is just deferring the payments to the future. I always vote NO on every bond issue,
no matter what the stated reason is.
#10 You are 100% correct on all points you made.
#9:
You are correct to compare CA with other states with regards to tax treatments. You’re example in your post was Texas, so let’s go with that one.
1: Texas has no individual income tax, and taxes corporations at 4.5% (franchise tax). California taxes corporations at 8.84% and individuals at a top rate of 9.3%. Should we do what Texas does and reduce corporate and individual income taxes in California? Or should we just look at this specific oil severance tax and forget the rest?
2: Although the state does not have an extraction tax as you point out, businesses that drill for oil in California pay much higher rates on many other taxes than is typical in other states. (Use the above example of net 4.34% additional income tax paid in California for all industries for starters, then move on to specific oil taxes paid in California that are either not paid or paid at much lesser rates in other states such as ad valoreum.
Furthermore, we all should be upset by the “solution” proposed yesterday by Speaker Nunez. You ask for solutions, well, this wasn’t even intended to be one, so perhaps you should ask the author of the bill when he will have one as well. This was a political ploy by the Speaker of the Assembly to get Republicans on record voting “for” oil and “against” education. Never mind that it is the Republicans sticking to their guns that are saving California from repeating past mistakes and digging us into further strucutral imbalance. Once again, the Democratic “leadership” of this state is playing politics instead of seeking real solutions.
I already admitted in my earlier post that I don’t have all the answers, but pilling on to the problem with more of same failed approach isn’t going to make matters any better. Perhaps we could look at eliminating categoricals in the education system to allow school districts to spend money where it is needed rather than desperately seek new funds for text books when there is a surplus in the facilities fund that can’t be touched. Perhaps we could look at the CTA and State Superintendent’s books to determine where the money they do get goes? No single line item in the state budget garners more money than the education system. Perhaps we should look to the stewards of our state’s educational system and ask them where the money is going before we decide to pur more money in? Just a thought.
Perhaps you have a fair solution? If we all kept an open-mind and searched for broad-based, structural reforms, we would all be better off in the end. The state’s budget has increased nearly 30% over the past 8 years, enrollment in public schools has increased, but has been relatively level over that same time period. If the state isn’t mismanaging funds, I ask someone to explain how we continue to run defecits.
Save ou schools? I say wholeheatedly YES! Let’s just do it the right way this time around.
The cause of the state’s problems is simple. UNIONs, UNIONs, UNIONs. Everything from the teachers, to the police, fire, nurses, prisions etc., wherever unions are involved, there is a budget shortfall or an impending crisis. Those Union pensions are draining the state and many cities DRY. Those pensions need to be cut across the board, along with education, state legislature staff, city staff etc. etc. It’s really funny to me that with no money to spend, there sure are a lot of people on the payroll. What do they sit and talk about? How they would LIKE to spend money they don’t have? Sheesh. Open up free markets with limited regulation and California would be a different state.
11. “How about this for a solution: Those on the receiving end of governement money can’t vote.”
Including those freeloaders who are receiving the benefits of having a police force, fire department, legal system plus subsidized highways, air transportation and food?
Nothing like a good tax topic to stimulate some good old fashioned fun….
Prop 13 Haters:
The voters in ‘78 had a better idea of how to make sound tax policy than the current batch of state leaders do today. Not to say prop 13 isn’t without its faults, but with Prop 13, the property tax has proven to be a stable revenue source for local governments, growing almost 10 percent per year. Even in 1992, a recession year, the annual increase was 7.9 percent. In an budget environment where the state continues to rely – to its continued detriment – on volatile revenue sources (personal and corporate income tax, capital gains & sales taxes) it is good to have a stable revenue stream available, especially as it is those revenues that go to city and county budgets.
Not a Novice:
Blaming Prop 13 for all the fiscal ills of this state is applying the same failed logic used in Jack’s blog this morning making oil companies responsible for the state’s lack of education funding. To quote a democrat of all things, “It takes a villiage” and in this case, it took a series of events, fluctuating economic conditions, and most significantly, bad policy and fiscal decisions by legislators in Sacramento and the voters of this state over the years to get us to where we are today. As #9 asked for solutions earlier, perhaps we should ask for an evaluation of the entire initiave based mandates passed by this state over the past 30 years, including the prop 98 education gaurantee, which have tied the hands of even the most fiscally responsible politicians in Sacramento (is there such an individual?)
Sticking you head in the sand solves nothing indeed. Let’s all pull ours out and start looking for real solutions.
Bringing the VLF back to its normal amount would be one step in the right direction. But that has become a third rail issue that nobody will touch. And so we all continue to pay less than the “real” VLF we should be. I’d much rather pay the higher VLF. It’s only the fraction of the cost of continuous front end work and I only have to pay it once a year.
Greg # 1 is so correct, and Al Ruffo is rolling over in his grave.
As #10 noted, Prop. 13 was 30 years ago. An STILL, the tax and spend types refuse to get the message. People are tired of bloated government, with staff members who do nothing but prepare their bosses for their 15 minutes of fame on C-Span.
The message of Prop. 13 was to stop government spending on the backs of property owners and cut back government to the essentials.
Guys like Jack think that every feel good program in Sacramento or D.C. or SJ needs to be supported by taxes. They think that there is some societal necessity to provide for those who can work but don’t; that we need to subsidize multiple breeders who can’t fill out a basic job application, even if they felt the urge to do so; to pay for every problem pregnancy that makes it’s way to El Norte from somewhere else; to pass more bullshit laws that can never be enforced due to lack of cops or regulators.
The gravy train needs to be derailed.
As for #9—fire as many of those $150k types as you need to to get to $4million. Don’t foreget that current benefits add at least 50% to the tab; and god knows how much their retirement package costs us all. Assistant principals, vice principals, asst. supts., deputy supts. god knows how many there are, and what do they bring to the dance? Bureaucracy. No value added to the education of kids. They PUSH PAPER.
John #19,
Back to the example of an average school district with a $4 million deficit. In the one I know, there are 2 assistant principles in the entire district, only at middle schools. Assuming one principal alone could handle all the discipline in addition to class assignment, and day to day operation, that’s 2 positions at less than $200K each, including benefits. There are 3-4 asst. supes in each district. It’s hard to imagine a school district doing without a CFO. This is the role of one of the asst. supes – getting the 200 pages of budget in order each quarter and overseeing all the spending. That leave an assistant in charge of curriculum, teacher training, new teacher placement, student placement, special education, and testing. The other 1-2 asst supes have major roles too, but even if we could do without them, their total comp would be about $250K each. So we have now saved the district $700K, leaving another $3.3 million to cut. Still requires losing teachers, increasing class size, cutting down on maintenance, closing libraries, etc.
Believe me, school districts that are laying off teachers are not leaving district offices untouched. The only reason teachers are in the news now is that state law requires notifying teachers of their potential layoff by March 15. The other cuts will come later.
Now, we could discuss consolidating districts. Even the small districts have administrators performing the functions I outlined above. Some consolidation is probably in order, but politically it is very difficult, and isn’t something that can be done in time to save this year’s budget.
There are some reasonable solutions available to the state to cut funding a bit, most having to do with providing more flexibility in spending categorical dollars. But I fail to see how dropping California from 46th nationally in per pupil funding to 48th is a wise choice to make. If one agrees that it is shameful to be so far below average, then there must be revenue solutions in the budget equation.
#16- Great question. Yes.
Those who fund the system- vote.
Those who don’t pay taxes, or receive their salaries from the pool- no vote.
Jack,
It’s interesting that our fair city needs a half billion dollars to bring our roads up to an acceptable standard. I believe our magnificent city hall set us back by the same amount. It’s all a matter of priorities.