Blind To The Long Term

Robert Cruickshank pretty well covers the disaster that will be the upcoming budget "deal" between legislative Democrats and Arnold Schwarzenegger. By the way, this is BEFORE the Yacht Party tries to enact a few more goodies for the privilege of letting Democrats vote for $26 billion in cuts, gimmicks and raids on local government. We'll see a big sigh of relief from lawmakers over the next few days that will be wholly unwarranted.

In the coming days we will hear Democratic legislators claiming this is some sort of victory - that Cal-WORKS wasn't eliminated, that California can again pay its bills. These are hollow, pyrrhic victories. The raid on local government funds will ensure dozens of cities go bankrupt and will lead to reckless public safety cuts, especially to firefighters. Schools are going to get another hit without any firm guarantee that they will be repaid - we haven't seen details of the "agreement" to repay the $9.5 billion schools are owed, but Arnold seems to have won the battle to prevent repayment from becoming a constitutional mandate, meaning that repayment shouldn't be counted on until the checks are actually cut.

Still unclear is the fate of health care, IHSS, state parks, and other proposed cuts. But at this point it's not clear that their exact fate matters much. Democrats have signaled that they will abandon their half-hearted efforts to demand new revenues, to close corporate tax loopholes, and to have a more fairly balanced budget. When the next mid-year budget adjustment has to be done in 6 to 9 months from now, or in the battle over the 2010-11 budget a year from now, Arnold will have little incentive to listen to Democratic proposals, since he has proved once and for all that he can get Democrats to do his bidding by holding firm and demanding massive cuts.

Particularly galling is the targeting of city and county budgets to cover the state gap. By siphoning off almost $1 billion in gas tax funds slated for cities and counties, not one pothole in California will get filled this year. With the loss of $1.7 billion in redevlopment funds, not one project like affordable housing will get initiated. And by taking $1.3 billion in local property taxes, lots of city and county employees, particularly in public safety, will end up out of work. It's really robbery on a pretty grand scale, and it will offset any economic recovery through stimulus funding throughout the state.

One of the major consequences of this cuts-only budget will be, paradoxically, higher costs for individuals and the state. When you eliminate or severely restrict social services programs, those individuals who rely on them will have to go elsewhere for those services. The alternatives are more expensive for everyone.

Irene Steinlage has trouble walking, getting dressed, making her bed, taking a bath. She has stayed in her Folsom home with the help of a health aide, one that Gov. Arnold Schwarzenegger says the state can no longer afford.

The governor's plan to take away such care is meant to save money. But it could end up costing California more by forcing the 85-year-old, who has Parkinson's, osteoporosis and other ailments -- and thousands like her -- into nursing homes.

"I couldn't possibly afford a nursing home," Steinlage said. So the state could be saddled with a Medi-Cal tab that is triple the cost of her home care worker, who receives $10.40 an hour five days a week [...]

Others say the experience of governments that have closed gaping deficits with deep program cuts suggests that the price of doing so is hefty.

"It's pay now or pay later," said Nicholas Freudenberg, who co-wrote a study of the long-term effects of service reductions made in the aftermath of New York City's fiscal crisis of 1975.

His 2006 study, published in the American Journal of Public Health, found that less than $10 billion in cuts to healthcare, education and law enforcement in New York City over four years led to at least $54 billion in additional costs over a 20-year period, using 2004 dollars and adjusted for inflation. Consequences included higher rates of HIV, a worsened tuberculosis epidemic and a spike in homicides.

"Those potential epidemics that are being seeded by Gov. Schwarzenegger's cuts will not come in his term or the terms of people who are making these decisions," Freudenberg said. "It will be several years down the line."

The sick thing is that the Governor, and maybe even some in the Yacht Party, know this. The consequences of program cuts are easily seen. Eliminating the Poison Control System, for example, means that people calling the emergency number (many of whom don't need to see a doctor based on poison accidentally swallowed) will instead go to the ER, and many of those visits will be from people on Medi-Cal, leading to higher costs. Cutting adult day care will send many into nursing homes, at a higher cost to the state. Losing Cal Works welfare funding will send children into foster care, at a higher cost. Cutting the meager drug treatment and vocational training in prisons almost assures an even higher recidivism rate, at a higher cost.

This is not a difficult calculation to make. We fund social services programs not only because we have an obligation in a developed society not to see people dying on the street, but because we can create programs that get people back to self-sufficiency at a lower overall cost. There is only one reason not to fund such programs - because an arrogant and entitled right wing refuses to fund these government obligations in the short term, preferring apparently to pay more in the long term. There has been enough money in the last few budgets to produce massive corporate tax cuts, but not enough to get someone with a chemical dependency the treatment he or she needs. There's been enough money to protect California's unique status as the only oil-producing state not to charge corporations for taking our natural resources out of the ground, but not enough to provide long-term care services that relieve the burden of nursing home funding over the long term. There's enough money to keep in place useless enterprise zones that create nothing but tax giveaways, but not enough to keep the state from becoming the first in the nation to put poor kids on a waiting list for affordable health insurance.

We hear about the "generous social services programs" in California that simply had to be cut, but they've been reduced to the point where they are almost unanimously the worst in the nation. That depresses the business climate, that moves bodies out of the state, that alienates the public. And Arnold Schwarzenegger knows this, and he did it anyway, to keep a promise to what little of his base he has left.

Ultimately, this system isn't designed to produce good budgets. Without a media that cares, no amount of activism or public pressure can be brought to bear on a shameless and unaccountable minority. If you need proof of the need for a complete rethinking of how to structure government in California in the 21st century, look at the last seven months.