Issue date: 4/30/08 Section: News

Media Credit: Martin Wood [Click to enlarge]

The Alliance for the CSU is facing a difficult battle in its attempts to fight Gov. Arnold Schwarzenegger's proposed budget cuts to the California State University system.

In order to balance California's budget for the 2008-09 fiscal year, the governor proposed a 10 percent funding cut for every department, agency and program in the state. This leaves the CSU system competing with every agency and program funded by the state for a limited amount of money.

The alliance is competing with the California Teachers Association, a union that represents 340,000 teachers, nurses, counselors and librarians working in California's K-12 public school system. The system is facing $4.8 billion in cuts under the governor's proposed budget.

The California Teachers Association wants to send the message to the state Legislature that these cuts are unacceptable, said Dina Martin, spokesperson for the association.

"School children didn't cause the state's economic problems," Martin said. "They shouldn't have to pay for it."

In addition to the union's lobbying efforts at the State Capitol, the association is staging events that bring heavy media attention to the union's attempts to stop the proposed cuts to the K-12 system and put pressure on state lawmakers to solve the budget crisis, Martin said.

On April 7, California Teachers Association President David Sanchez, Vice President Dean Vogel and Secretary-Treasurer Daniel Vaughn embarked on a 10-city statewide tour in a yellow school bus to focus media attention to the unions struggle. The "Cuts Hurt" tour ends in Sacramento on May 20, in order to coincide with the union's annual legislative lobbying day, Martin said.

The union sees the governor's cuts-only approach to balancing the state's budget as a part of the problem.

"Any approach to solve the budget crisis must include increased revenues," Sanchez said in an April 7 press release titled "The Bus Stops Here."

Michael Cohen, director of State Administration for the California's Legislative Analyst's Office, said that only looking at cutting expenditures and not trying to increase revenue to balance the budget limits lawmakers' options.

The Legislative Analyst's Office, which does an analysis of the governor's budget proposal and offers an alternative budget for the state Legislature to consider, found the 10 percent cuts across the board approach to balancing the budget "fatally flawed" by making every department and program in the state equally important, Cohen said.

In developing its alternative budget the office attempted to prioritize state spending, Cohen said. The office's approach tried to determine the core programs in the state that need to be funded at their current levels, he said. These areas include K-12 education, higher education, healthcare, social services such as the CALWORKS program, and the prison system.

"Protecting core programs means that other programs will face a higher cut, but not every single program in the state should be subject to an arbitrary cut percentage," Cohen said.

While the Legislative Analyst's Office budget does not call for raising taxes in the state, it does suggest rolling back tax credits for research and development in the state and the dependent child tax credit in order to raise revenue, Cohen said.

Vice Chair of the Assembly Budget Committee Roger Niello, R-Sacramento, said the Legislative Analyst's Office's proposals are a proactive move to help prioritize the state's needs, but he does not agree with all of them.

"It is true that some programs are more important than others, but people have different ideas about what is important," Niello said.

For Niello, what is most important is not raising taxes and instead bringing state spending in line with current revenue. Historically, bad economic cycles in the state are only exacerbated by raising taxes, he said.

Niello said he has significant problems with the LAO proposals to rollback the research and development and dependent child tax credits.

Research and development done by California companies has been the single most effective driver of the state's economy over the last 10 years, Niello said.

"Taking away the research and development credit takes away the incentive of the types of businesses that rely on research and development to locate in the state," he said.

The dependent child tax credit is important because the credit goes to middle and lower income households. The money is then spent, putting it directly back into the consumer economy, Niello said.

"The dependent child tax credit is a dangerous credit to eliminate in the face of a weakening economy," Niello said.

Assemblyman Dave Jones, D-Sacramento, sees the Republican state legislators' refusal to increase revenue by raising taxes or closing tax loopholes as the biggest problem in the state's budget crisis.

"A small minority of Republican members of the Legislature can effectively force us to take a cuts-only approach to the extent that they continue to refuse to close loopholes and raise revenue," Jones said.

Jones put forward a bill in January to close a tax loophole for yacht owners in California that was defeated in the Assembly.

Jones said that every lobbying group that visited him has raised concerns about the cuts. Jones said he lets every group that comes to talk to him know that no one is likely to be spared drastic budget cuts if Republicans in the Legislature are not persuaded to deviate from their pledges not to raise taxes and take a more balanced approach to the budget.

"My advice to those concerned about the budget cuts is to call, write, e-mail and visit the offices of Republican assemblymembers and senators and urge them to refrain from their continued insistence on a cuts-only approach," Jones said.

Timothy Hodson, executive director for the Center for California Studies at Sacramento State, said that in looking at the history of deficit budgets in California, he is unaware of any budget crises that were successfully resolved solely by expenditure cuts. Successful resolutions to budget crises always involve a mix of new revenue as well as cuts, he said.

A belief in keeping taxes low is a valid Conservative principle, Hodson said. The difficulty is that this principle has become an inflexible political slogan that is disconnected for political and governing realities, Hodson said.

"The reality is when people say let's cut taxes and spending, they are talking about closing schools and eliminating other services people want," he said.

Because the CSU system not only represents tens of thousands of students, faculty and staff, but is also a tremendous economic engine that the state desperately needs, the system has a powerful argument and a realistic chance of success of at least reducing the proposed budget cuts, Hodson said.

"Budget wars are not fair, and the groups with the best resources and arguments win," Hodson said. "The CSU has more resources than welfare mothers."

Todd Wilson can be reached at twilson@statehornet.com.

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