Eric Garcetti Stomps On Budget Deal, Lights It On Fire

Before last night's blogger conference call with LA City Council President Eric Garcetti, my opinions of the budget deal from Sacramento weren't very well-formed. I think I have become so inured to craptastic solutions from Sacramento that this one looked no worse than others. Of course, I don't have a responsibility to constituents and a need to implement the outlines of the plan, so Garcetti's very forceful words against the package kind of snapped me out of my slumber. Here's a paraphrase.

"I think it's a reflection of a broken system. It's like shooting a little morphine into a sick patient. I think depending on federal dollars to balance the budget is irresponsible, and will blunt the impact of the stimulus. It means that the county and school districts will see a lot of projects rolled back. The health care cuts are going to be devastating. You're going to see a lot more homeless people this year, a lot more people who need critical care and can't get it. So there is no joy in this resolution other than that it is a resolution."

Very strong stuff. And he's not wrong. It's not the reliance on federal stimulus dollars to balance the budget, which is necessary and will save jobs throughout the system, that gets me, but the continued reliance on borrowing and the raid of voter-approved funds for mental health and early childhood programs, which is illegal and will require the unlikelihood of passing new initiatives. We all new there were going to be extremely painful cuts, including an elimination of all local public transit agencies at a time when transit activity is up, and cuts to education below levels of Prop. 98's mandate (which will also require a vote by the people to override the passed law). But some of the ideas are just completely bizarre - they can't cut prison medical care, it's in a receivership and not their hands, unless they figure that releasing 55,000 inmates will alleviate them of the burden of providing Constitutional rights for those who remain.

There are long-overdue revenue increases but they are both temporary and either flat or regressive. For 30 years the affluent in society have avoided their share of the tax burden, and now the least of society will have to pay for it for a few years. And of course, it's sweetened with an enormous corporate tax cut.

Careful listeners could glean that the “framework” includes a new limit on state spending and no permanent tax increases. In response to a question as to what taxes would be increased, Steinberg answered that the reporters who had written about the issue in the Los Angeles Times and the Sacramento Bee were “good reporters.” These stories suggest that the deal would include a 1 cent increase in the state’s sales tax rate, a 12 cent per gallon increase in the gasoline tax, a doubling of the Vehicle License Fee rate - although the new rate would remain lower than the pre-late 1990s tax rate - and a 0.25 percentage point personal income tax surcharge. The duration of the tax increase would depend on whether voters approve the proposed limit on spending. If voters approve the limit, the new taxes would stay in effect five years. If voters turn down the cap, the new taxes would sunset in approximately two years.

There isn't any margin for error if, say, one of the five measures that will now be on the ballot fail, or if nobody wants to buy our debt or buy the state lottery, which is losing revenue. It's another seat of our pants craptastic budget which makes no long-term solutions and essentially keeps intact a broken structure. Garcetti is right that the problem is systemic, and so that's the goal for progressives in the state for this point forward - systemic change.