Clearing Up Some Confusion About the Governor’s Proposed Tax Initiative

June 20, 2012

By now, many Californians are well aware that Governor Jerry Brown is seeking to qualify an initiative for the November ballot that would ask voters to temporarily boost sales and income taxes, with the increase primarily affecting the wealthiest Californians. What is less well known is that the Governor’s measure is also the keystone of the state’s effort to permanently transfer – or “realign” – several public safety, health, and human services programs, along with a dedicated source of funding, to the counties, a process that began last year. In particular, the Legislature redirected to counties two existing revenue streams – portions of the state sales tax and the Vehicle License Fee (VLF) – that are intended to flow to counties indefinitely in order cover the cost of the realigned programs. Counties, however, hoped for greater certainty than a change to state law can provide. The Governor’s initiative would address that concern by placing the revenue shift in the state Constitution, thereby guaranteeing that the sales tax and VLF dollars set aside for realignment will continue to flow for that purpose. The measure would also provide key legal protections for both the state and the counties as realignment rolls out, as we explain in our recent report.

Unfortunately, there appears to be some confusion about the relationship between the realignment provisions and the temporary taxes in the Governor’s measure. A recent post on Prop Zero, for example, claims that “much of the tax revenues [the Governor] would raise in his measure go to providing funding to locals for his realignment plans.” The post further argues that the Governor’s measure makes “the mistake of establishing a permanent change in governance … with temporary taxes.” This analysis is off the mark. As explained above, the Governor’s measure would place in the state Constitution the current, ongoing revenues that were already shifted to counties as part of last year’s realignment. In other words, the measure would combine a permanent change in governance with a permanent source of funding for counties’ new responsibilities. In contrast, the Governor’s proposed temporary tax increase has nothing to do with realignment. Instead, it would raise revenues in order to help balance the budget and stabilize the state’s fiscal situation.

In short, the Governor’s initiative encompasses two separate sets of revenues with different purposes and time frames – and never the twain shall meet.

– Scott Graves

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Posted by cbporg

Statement: The California Budget Project on the Release of Governor Jerry Brown’s May Revision

May 14, 2012

The California Budget Project, a nonpartisan public policy research group, released the following statement today from Senior Policy Analyst Scott Graves in response to the release of Governor Jerry Brown’s May Revision to his proposed 2012-13 budget:

“California’s economy continues to slowly recover from the Great Recession. However, lower-than-anticipated tax collections in recent months add significantly to the challenges the state faces in closing the budget gap. For example, the Governor’s May Revision projects lower-than-expected corporate tax revenues, due in part to the massive corporate tax breaks enacted in recent years.

“The May Revision highlights the need for significant additional revenues to help address the budget shortfall. Without a balanced approach to addressing the budget gap – one that includes additional revenues – we face even deeper cuts to schools, colleges, and other core public structures that are essential to the lives of all Californians. The tax measure the Governor plans to put before voters in November provides a reasonable, sound approach to stabilizing the state budget and creating a foundation on which to rebuild going forward.

“To the extent that cuts are made to address the budget gap, such reductions should be carefully targeted so they don’t endanger vulnerable families, children, and seniors, who have already borne the brunt of recent years’ budget cuts. With many families still struggling in the wake of the worst recession in the post-World War II era, we are concerned that the Governor’s May Revision deepens his proposed cuts to the state’s safety net, while also making significant reductions to child care and other programs and supports that help Californians prepare for and keep jobs.

“In the coming weeks, the state’s leaders should work to bridge the budget gap while ensuring sufficient support for the public structures and systems that provide the foundation for our quality of life and a strong economy.”

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Posted by cbporg

New CBP Fact Sheet Shows Local Impact of Governor’s Proposal To Scale Back In-Home Supportive Services

April 10, 2012

The In-Home Supportive Services (IHSS) Program helps more than 425,000 low-income seniors and people with disabilities live safely in their own homes, thereby preventing their placement in more costly out-of-home care. Under the Governor’s proposed 2012-13 budget, domestic and related care services – including laundry, food shopping, cooking, and housework – would be eliminated for most IHSS participants living with others, a change that would affect approximately 254,000 people.

A new CBP fact sheet examines the local impact of this proposed cut. The Governor’s proposal would reduce state spending on IHSS by $207 million in the coming fiscal year and result in the loss of $424 million in county and federal funds, for a total reduction of $631 million. The fact sheet estimates the number of IHSS participants affected and the loss of IHSS funds by county. In Los Angeles County, for example, funding for IHSS would drop by $220 million with more than 100,000 people affected, while in Fresno County, funding for IHSS would drop by almost $20 million, affecting more than 7,000 people.

Assembly Budget Subcommittee #1 on Health and Human Services will review the Governor’s proposal tomorrow at a hearing to be held at 1:30 p.m. in Room 437 of the Capitol.

– Steven Bliss

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California’s Recovery Is Leaving Single Mothers Behind

April 4, 2012

More than 60,000 children could lose access to child care and preschool in the coming fiscal year under the Governor’s proposed budget, according to a recent CBP report. The Governor’s proposed cuts come at a time when single mothers, many of whom rely on affordable child care to work, have been left behind by the emerging recovery.

A new CBP analysis of US Census Bureau data shows that single mothers in California continued to experience declines in employment and earnings last year, while married parents’ employment slowly began to rebound. The share of single mothers with jobs fell from 58.8 percent in 2010 to 56.8 percent in 2011, and was down by more than 12 percentage points from a recent peak of 69.2 percent in 2007. The drop in 2011 marked the fourth straight year of decline and brought single mothers’ employment rate to the lowest level since 1995, two years before California enacted welfare reform. By comparison, the employment rates for married parents increased slightly between 2010 and 2011, rising from 85.5 percent to 85.8 percent for married fathers and from 57.1 percent to 57.5 percent for married mothers. Even single mothers who were employed in 2011 fell further behind: Their typical inflation-adjusted earnings declined that year for the fourth year in a row. In total, single mothers’ inflation-adjusted median hourly wage fell by 8.4 percent between 2007 and 2011. That drop erased all of the hourly wage gains single mothers made prior to the Great Recession.

Single mothers in California continue to struggle in the face of a weak job market. Cutting child care and preschool funding would only leave them further behind.

– Samar Lichtenstein

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Playing With Our Future: New CBP Report Examines Governor’s Proposed Cuts to Child Care and Development Spending

March 30, 2012

Child care and preschool are essential in helping parents find and retain employment as well as in preparing children for success in school. Such programs are especially important now, particularly for lower-income parents, as California’s families face the toughest job market in decades. A new CBP report, Playing With Our Future: Key Facts About California’s Child Care and Development Programs in the Aftermath of the Great Recession, takes an in-depth look at the economic and policy context of the Governor’s proposed cuts to state spending on child care and preschool. The report shows that:

  • Nearly one out of four California children lives in poverty, and many families – including single mothers and their children – continue to face economic uncertainty in the aftermath of the Great Recession.
  • The Governor’s Proposed 2012-13 Budget would cut funding for both child care and preschool by more than 20 percent, after adjusting for inflation, causing more than 60,000 children to lose access to these programs in the coming fiscal year.
  • Child care and development spending would drop to 1.2 percent of total state spending in 2012-13 under the Governor’s proposal, down from 2.0 percent in 2007-08.
  • State funding for afterschool programs has not been cut in recent years – and would not be reduced under the Governor’s proposal – because it is protected by Proposition 49 of 2002, which prohibits the state from reducing afterschool funding without voter approval.

Read Playing With Our Future here.

– Steven Bliss

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