In just under two weeks the state of California will go broke unless it makes deep cuts to its budget by eliminating spending on crucial programs to cover a $24 billion deficit. Among the programs hardest hit are social services which assist the elderly, blind, low-income families, single parents, the mentally challenged and those living with HIV/AIDS. Additional proposed cuts would end the state college financial aid program, reduce spending on the prison system and cut allocations to local cities and counties forcing many municipalities to reduce everything from trash service to police protection.
Last Friday in Hollywood, nearly 300 hundred HIV/AIDS protestors took action, shutting down the main artery of Santa Monica Boulevard for four blocks as they rallied in front of the Hollywood Forever Cemetery. Local and state officials, plus singer/actress Sheryl Lee Ralph, were on hand to rally protesters to not allow Governor Arnold Schwarzenegger to send any more people to an early grave by eliminating crucial HIV/AIDS prevention and treatment services.
Dressed in red the protestors represented a cross section of those living with HIV/AIDS. They were men, women, Latinos, Blacks, Asians, young and old many holding gut wrenching signs and pleading for justice not to have HIV/AIDS programming cuts. The advocates joined a week-long chorus of other advocates representing many different interest groups that are also being affected by the proposed draconian cuts. The other groups include women, children, college students, elderly and the mentally challenged.
Among the crowd of protestors at yesterday’s rally was Sean Strub, president of Cable Positive, cable television’s AIDS action organization and founder of POZ magazine. He stated that “People are going to die from these cuts” without access to medication. He added that “People are going to become more infectious, they’re going to create more HIV infections” and that there would be “a severe disruption in the delivery of services [and] organizations will close and lots of people will lose their jobs.”
But to make the state budget situation even worse California will automatically lose billions of dollars in matching federal and private funds by not meeting its minimum funding requirements. For example, in addition to slashing HIV/AIDS funding by $80 million the state will also lose $88 million in federal and an estimated $234 million in private matching funds according to Michael Weinstein, president of AIDS Healthcare Foundation.
And by eliminating altogether, CalWORKS, a welfare assistance program, the state will save $1.3 billion but will loses $3.7 billion in federal funding according to H.D. Palmer, a spokesman for the state Department of Finance. These cuts would impact 1.3 million residents, 1 million being children belonging to some 521,000 affected families.
And by deleting the college student aid program, Cal Grants the state of California will save $173 million with an additional $450 million the following fiscal year. In return it will greatly diminish the chances of some 200,000 students attending college.
Further the proposed cuts to Medi-Cal which provides insurance to the poor which include coverage for dialysis, breast and cervical cancer treatment for those over age 65 would be completely eliminated.
Four Reasons for California’s Budget Chaos
So just how did the Golden state finds itself in yet another dire deficit situation with no viable solutions but to cut state supported programs? Well it’s a long sorted story which ironically begins with California’s wealth.
With nearly 37 million citizens, a gross state product of $1.8 trillion dollars, California contributes13 percent of the nation’s gross domestic product and if considered an independent country, would rank between seventh and ninth in terms of the size of economy.
But despite its massive size, financial wealth and power, the state is embarrassingly riddled with accounting, cash flow and budget mismanagement issues that most American states cannot possibly comprehend. But believe it or not, back in the 1998/99 fiscal year the state of California actually had a balanced budget. But four factors have continually contributed to the state’s spiraling financial demise.
- Lack of savings: Similar to most Americans the state of California has a problem with saving. Governor Schwarzenegger has repeatedly proposed a “rainy day fund” which would store away a percentage of revenue for deficit challenging times like these. During the robust dot.com era revenues shot up and so did spending on programs but with very little going towards a savings account. But as the economy began to take a downward turn state spending did not. Further, California borrows money short term during the summer months when tax receipts are down and pays off the loans later in the year when the revenue increases with interest. So with declining revenue, increasing spending and with higher interest rates on borrowing to cover seasonal fluctuations, California finds itself in a financial mess.
- Corporate Real Estate Loophole: Billions of dollars are lost every year through an inadvertent loop hole some corporations have been using which was created to assist homeowners from losing their homes. In 1978, Proposition 13 was passed which limits property tax increases. However, certain companies are actually able to take advantage of this allowing them to avoid reassessment even if commercial property ownership changes hands. California budget reform advocates are proposing annual reassessments as a solution to bring in additional revenue.
- Supermajority Budget Process: California is one of three states which require a 2/3 super majority in both legislative bodies in order to pass budgets or to raise taxes. This often creates a stalemate between republicans who are against tax increases and democrats who are for them. If constitutionally the California Senate and Assembly were able to pass a budget and raise taxes with just a simple majority vote, then this would potentially eliminate a significant amount of the current budget and spending shell game.
- Too much Voter Power: California provides its citizens with enormous amounts of power that many states do not easily or readily provide. For instance it is relatively easy to change the state’s constitution with a mere voter approval as was the case last year with Proposition 8 which now forbids same-sex marriage. Similar power is also giving in the budgeting and taxation process. In fact ballot-box budgeting has been used as a quick fix with voters approving spending and tax increases to avoid insolvency. But last month this tactic did not work with voters as they voted down tax increases forcing the Governor to make terminator like cuts to state supported programs.
And even with federal stimulus money being used to offset some of cuts, California still faces serious problems in the days ahead. Millions of people stand to lose their education, protection, health and even their lives if these drastic budget cuts are made: Protestors on Friday put it in simpler terms:
Tyrone Carter who is Director of Young Men’s Health Programs, Reach LA and works with a subpopulation of young black gay men stated:
“These young men don’t have anyone who is aware of how they operate” and he fears that once HIV prevention funding is cut there will be no “Cultural sensitivity or the type of approach that they need to get them to” access prevention information, testing and treatment.
Armond Anderson-Bell who is an advocate and consultant for HIV/AIDS community organizations stated:
“A lot of people depend on their medication…whether it’s a food bank, a support group, all of those things play into people’s lives on a day to day basis. And it would be horrible if these cuts would continue to fall through.”
Hence the solution to California’s budget problem truly lies in correcting the four origins of its financial mayhem, but until that happens the very poor, sick and elderly, and those living with HIV/AIDS will be the casualties of California’s fiscal irresponsibility.
Herndon Davis is a media consultant/journalist focusing on issues of diversity among people-of-color, women and LGBT. He can be reached at www.herndondavis.com