The Issues

The governor and a minority of elected officials are pushing a budget that destroys rather than builds. It is a budget that auctions off the California dream to maintain tax breaks for the largest corporations and wealthiest individuals.

The governor’s proposal to cut a $20 billion budget shortfall includes:

• $4.6 billion in cuts to welfare, social programs, health care and the courts
  • eliminate children’s health insurance program
  • eliminate in-home care for seniors and the disable
  • eliminate a program to help welfare recipients find work
  • eliminate a program to prevent foster kids from becoming homeless
  • eliminate adult day health care
  • reduce Medicaid eligibility
  • cuts for early childhood and mental health programs
• $2.4 billion in additional cuts to schools and community colleges
• $1 billion in cuts to transit funding

But there is a better way, a path that invests in California’s future through fair and equitable taxes. Experts have identified a number of options to preserve vital services without raising taxes on the middle class. We already pay our fair share. It’s time the rich and corporations did too.

Budget alternatives to raise revenue

• $2 billion by eliminating corporate tax cuts passed last year.
• $4-6 billion by returning top tax brackets for those making $250,000/$500,000 to 1992 levels
• $3 billion by reassessing property values of non-residential real estate, a loophole that allows Disneyland to pay a nickel per square foot in property tax while typical homeowners pay $2 a foot
• $1.5 billion by enacting an oil severance tax. California is the only oil-producing state that does not have such a tax.

Resources:
Backgrounder on state budget
Taxes for richest 400 taxpayers plummets
State budget cuts jeopardize economic recovery
How does the governor balance the budget?
Rising gap between rich and poor in California
California’s regressive tax code punishes workers, rewards the wealthy
California in Crisis
Low hanging fruit: 10 ways to $20 billion