Gabbing and Grousing with Gordy

Gabbing and Grousing with Gordy
by Gordon Alexandre, Guild President

State Budget Woes, GCC, and Tax Increases

The state's budget problems are massive. The budget deficit is expected to be in the neighborhood of $16 billion over the next several years. The governor has proposed a 10% cut in expenditures across the board, including $4.8 billion from K-12 and community colleges. Cuts of this kind would cripple public education in California for years to come. The governor's proposed cuts would be equivalent to:

· laying off more than 107,000 teachers;

· reducing per-pupil spending by more than $800;

· laying off 137,000 bus drivers, janitors, food
service workers, and other support staff;

· increasing class size by more than 35%.

All this would occur at a time when California already ranks 46th in the country in K-12 per-pupil spending and California community colleges rank 45th in the country in per-pupil spending. No doubt, California's budget is large, but it's large because we're the most populated state in the country, not because of massive waste or fraud. California's K-12 public schools educate more than 6.3 million children, and community colleges serve more than 2.5 million adults. California has a big budget and an inadequate budget at the same time.

California's budget woes could trickle down and harm GCC. The controller's office has estimated that new revenues for 2008-2009 will be approximately $791K, while new expenses will be approximately $1.659M, leaving the District with a projected budget deficit of $868K. (A word of caution: These are projections, and since we won't know what the actual budget is until after the May Revise and until it's approved by the legislature sometime during or after the summer, we should take all this with a grain of salt.) In view of these potential cuts, my position is no full-time layoffs, fight like "hell" to avoid part-time layoffs, no salary cuts, and no out-of-employee-pocket payments for insurance premiums. The District is left with few choices in balancing its budget; this is why the District is offering a retirement incentive for 2008. It saves the District money and, if enough faculty, classified employees, and managers take the incentive, the District can avoid drastic cuts. Since the level of participation in the incentive is not yet known and probably won't be until after the fall semester begins, the District is putting in motion plans to cut low enrollment classes, reduce and/or eliminate released time and stipends, and be more careful with the hourly account. I cannot fault them for doing this, but these cuts are not the answer to GCC's budget difficulties.

We can't just cut our way out

The answer lies at the state level and it lies in increasing taxes, not in massive cuts to public education or vital social services. The amount of revenues needed cannot be raised by simply closing tax loopholes, though that certainly should be done. The reality is that taxes in the state are too low. The issue should not be whether we need to increase taxes, but on whom and how much. Bottom line, we need more revenues and any tax increase must be fair.

Taxes—not a dirty word

In my last Chaparral column I highlighted several tax increases worthy of consideration. In this column I would like to focus on just two, the first not previously discussed and the second more clarification on an idea already mentioned. Wealthy Californians are not taxed enough. Prior to the Deukmejian tax cuts of the 1980s, couples in the top tax bracket were taxed at a rate of 11%. If that same percentage were reinstituted today on couples earning over $500,000 a year, $2.5 billion of additional revenues would be brought back into state's coffers. That truly would be a much more progressive tax policy than the 9% rate the wealthiest couples are taxed at today. In addition, looming over this fiscal crisis is the storm-cloud of Proposition 13, passed by voters in 1979. The passage of Proposition 13 substantially reduced property tax revenues by locking property taxes into a fixed 1% of the assessed value at the time of purchase. Those who have lived in the same home for a long time pay relatively low property taxes, while newer homeowners pay high property taxes. This is both unfair and doesn't give the state enough revenue to do its job. We must revisit and alter Proposition 13. Maybe the place to start is to re-assess non-residential (commercial) property. Estimates suggest this would bring in an additional $3 billion a year. Property purchased to "flip" and rental property could also be re-assessed. Next, residential property could be re-assessed, let's say, every 10 years, taking into account the increased value of the home. Higher property taxes means the home is worth more and the homeowner makes out well upon the home's sale. For those nervous about this, a "cap" could be imposed and, of course, exceptions should be made for seniors and for those on fixed incomes.

In summary, California's fiscal problems are structural in nature and cannot be solved through cuts in spending or closing loopholes. Just as bandaids are not able to cure cancer, cuts and closing loopholes cannot solve the state's budget woes. If my solutions seem radical, they are because the magnitude of the problem requires dramatic solutions. &

CHAPARRAL