The State Budget Crisis

July 23, 3009 California Budget Update

> Floor Report of the 2009-10 State Budget As Modified by AB/SB 4X 1, JULY 23, 2009. Download PDF

> July 2009 California Budget Deal Summary. Download PDF

> Floor alert: Oppose the Privatization of Human Services, July 21, 2009. Download PDF

BACKGROUND

> Broad Coalition Calls on Legislature to Repeal Corporate Tax Giveaways Before Making Any Additional Cuts to Vital Services

> Why is Chevron getting a massive state tax cut? Click to download pdf

California is once again confronting a massive budget deficit and there is no question that tough choices will have to be made. Governor Schwarzenegger’s latest budget plan though, would just make matters worse for the economy, for working families, and for the state’s most vulnerable residents. It involves massive cuts to education, public safety, health care, and human services programs. If enacted, these cuts would shortchange Californians and undermine our economic security for years to come. Click here for a summary of the governor’s budget proposal (pdf).

State services -- and the Californians who rely on them -- have already taken $25 billion in cuts since September. Even as they were slashing budgets for desperately needed state programs, legislators and the governor created billions of dollars in new, permanent, and uncapped corporate tax loopholes. These unfair breaks benefit some of the world’s wealthiest corporations, provide no proven economic value, and come at the expense of California’s future.

That’s why we’re demanding that legislators shut down these loopholes before they make another dime in cuts to vital services. Each year, California gives away more than $50 billion in tax breaks to individuals and wealthy corporations. If we close just some of these tax loopholes, we can protect public safety and maintain lifesaving programs for some of California’s most vulnerable residents.

The decision to keep tax loopholes open and make cuts instead is a conscious choice, and it’s one that legislators should be held accountable for making. Here are just a few examples of the choices legislators can make in the coming weeks as they debate solutions to the budget crisis:

Legislators can completely eliminate CalWORKS, the state’s successful welfare-to-work program that helps support families as they get training and get back to work. State savings: $1.3 billion	OR	They could close the “research and development” tax break for corporations, milked by drug companies who spend the millions they save in taxes on lobbying to keep drug prices higher. State savings: $1.3 billion
Legislators can stop funding state parks, closing them to the public and endangering wildlife, historic treasures, and public lands AND virtually eliminate in-home supportive services for the elderly and disabled, potentially sending tens of thousands of patients to nursing homes unnecessarily. State savings: $684 million	OR	They can get rid of the tax loophole that lets giant multinational corporations shelter their profits in offshore tax havens like the Cayman Islands. State savings: $700 million
Legislators can eliminate the Healthy Families program, Leaving 900,000 kids uninsured AND take funding away from services for the seriously mentally ill AND cut off access to life-saving medication for low-income HIV/AIDS patients. State savings: $513 million	OR	They can end the loophole that subsidizes Wal-Mart’s low-wage, no-benefit jobs through the enterprise zone program, which non-partisan analysts have consistently said provides no economic value. State savings: $497 million

Don’t let Sacramento politicians claim there are no alternatives to cuts. Closing corporate tax loopholes can save jobs and save lives. It’s all a matter of priorities.

Additional Information:

Contacts

California Labor Federation

The State Budget Crisis