I keep having a flashback of Arnold Schwarzenegger cutting up the giant credit card when he was running for Governor. Many broken promises later, California now finds itself in a very serious budget crisis.

At last month's TCDF meeting we heard from Lara York and Nicole Steward of The Fremont Education Coalition about how the budget shortfall will affect the Fremont Unified School District. Cuts may need to be made that will affect counselors, transportation, staff development, updated text books, technology, increased class sizes, and more. This is just a snapshot of what will happen in school districts across the state.

The Governor's original solution was  to make 10% cuts “across the board.” After much criticism, he scaled back his cuts and decided that his new plan is to expand the types of games the lottery can offer and market them more aggressively and sell bonds to investors based on the value of those future sales. He insists that this is not risky and is “not really borrowing.” 

Analyst Elizabeth Hill said the Governor’s lottery revenue projections are overly optimistic and could harm education funding. She also encouraged lawmakers to raise $3.3 billion by closing a variety of tax loopholes.

Assembly Majority Floor Leader Alberto Torrico believes that the budget should reflect our values and that we must invest in the future. He believes that in order to fund important services we must raise revenue, not just make cuts. He wants to ensure that the budget is fair and that it is not unfairly balanced on the backs of our children, seniors and working families.

Two bills were introduced by Democrats that would close two loopholes, thus bringing in more revenue for the state.

The first was ABX 9, the Oil Severance Tax Law. This bill would have imposed a tax on any producer at a rate of 6% for the privilege of severing oil from the ground or water in California for sale, transport, consumption, storage, profit, or use. This tax would be assessed on each barrel of oil severed. If this 6% tax was imposed on certain oil producers in California, $970 million in state revenue would be generated for the budget year.

The bill also imposed a 2% surtax on an oil industry’s windfall profits. If the 2% windfall profits tax was levied on the oil industry’s windfall profits that are in excess of $10 million, $230 million in state revenue would be generated for the budget year.

 Twenty-one other states have a similar levy from 2% to 15% on oil producers. Not one Republican member of the Assembly voted for this bill . It did not pass.

ABX3 10, commonly referred to as the “yacht tax,” would reinstate the 12-month use tax presumption period for vehicles, vessels and aircraft purchased out of state. The intent of this bill was to discourage tax avoidance on expensive purchase, such as yachts, through offshore delivery arrangements in which delivery takes place outside the state’s waters and the yacht is berthed for a few months in Mexico or other location outside the state before being brought back into California.

This bill did not pass. Only three Republican Assemblymembers voted for this bill.

As long as we see such votes being divided along strict party lines, I find it hard to believe that Governor Schwarzenegger and the Republican legislators really understand the budget crisis that California faces.

Denying passage of both of these bills clearly favors protecting the wealthy. I don’t understand how Arnold and the legislators “on the other side of the aisle” can maintain that they are representing their constituents while placing the wealth of oil companies and yacht owners above the health care, education, infrastructure, and social service needs of Californians.

So the next time I find myself short on funds, I’ll heed the Governor’s example by borrowing some money and heading to the casinos to win back the money to repay the loan. In the meantime, I’ll only pay 90% toward my house and car payments, doctor bills, Tivo and Macy’s bills, and luxury vacations. That’s a 10% cut across the board -right? After all, I wouldn’t want to save money by cutting out any frills.

If you want to hear from a legislator who has his priorities straight and knows how to represent his constituents, please join us at our meeting on Wednesday, June 18th and hear our guest speaker, Assembly Majority Leader Alberto Torrico.  He will share his ideas about a balanced approach to solving California's budget crisis.