Monday, July 4, 2011

California's new budget, the Democrats, and the High-Speed Rail Project

There is an enormous push for high-speed rail in California. A little background:  the voters supported a $9.95 billion bond issue for the construction of HSR.  $9 billion of that was to be matched with any other dollars. The other $950 million was to buy the good wishes of all the other transit operators in the state, or at least some of them.

However, California's budget deficit is through the roof and the new budget, signed by the Governor, makes drastic cuts. The article describes some of these cuts.  What isn't being cut is the high-speed rail program.  Is that a problem?  Well, those $9 billion will cost state taxpayers at least two dollars for every dollar borrowed through the bonds.  And, the CHSRA can "borrow" against those bonds, even if they haven't been sold. (I don't have to tell you that such a "debt" won't be repaid. These will be sunk costs to taxpayers.) 

So all the rail authority needs are matching dollars, such as the $3 billion from the DOT. That gives the CHSRA about six billion with which they will build a pretty much useless rail corridor less than 100 miles long, in California's low population farm country.  I say useless since it can't be used by high-speed rail. Amtak can use it, although they certainly don't need it.

Train supporters and Democrats think this HSR project is a great idea, not the least aspect of which is that it brings $3 billion from the federal government into the state.  And hardly anyone is asking what the costs of those "free" dollars are. As this project goes ahead -- which it can only do with federal funds -- there are no other available sources -- the state matches those, more or less. That means, we taxpayers are on the hook for at least $1 billion each year.  How's that for balancing the budget?

What's worse and most egregious is what the Legislature and the Governor agreed to cut. Education, medical care, care for the elderly and the disabled, just for starters.  The Governor appears to believe that we can afford to build a luxury train, but can't afford to support those in our society not as fortunate as the rest of us.

Wait, there's one more thing that has been cut.  It's part of the committed $950 million from Proposition 1A.  It was intended to upgrade all the secondary support rail providers that would link into HSR to make it accessible to more riders.  That's also been cut.  In other words, we are also not funding urban and regional public mass transit services for upgrades, which they so sorely need.  

That would, in fact, be exactly the kinds of investments we should be making, urban and regional mass transit, but not the inter-city luxury train that will be used only by those who can afford to fly, and that's a minuscule transit population that hardly justifies the expenditure of tens of billions of dollars for a fancy train.

Does the injustice of this strike you in any way?  In a certain sense, the disadvantaged and the lower middle classes, who do pay taxes, are being asked to pay for the construction of a luxury train for the rich.

As a Democrat, I have come to miss my Party's history of a commitment to those not at the top of the economic food chain.

We once were a caring, thoughtful, charitable Party that made it a point to support all those people neglected by the Republicans.  Apparently, no longer.  We are now grasping, self-promoting, reckless spenders willing to push a vast, costly project on California all the while knowing what a sham HSR really is for our state.  Shame on us. 


California won't be the same under new budget
Wyatt Buchanan, Chronicle Sacramento Bureau
Thursday, June 30, 2011

Sacramento -- Poor people will receive less medical care and welfare, disabled people will see fewer services, state parks will close and public university students will pay more in California under the budget that takes effect Friday.

But also Friday, the state sales tax will decrease from 8.25 percent to 7.25 percent and vehicle licensing fees will drop by almost half. Combined with the taxes that expired in January, an average California family will pocket about $1,000 this year.

Those are just some of the impacts of the new budget, which Gov. Jerry Brown finished signing today to close the state's $26.6 billion deficit. Before he finished signing, Brown used his line-item veto authority to cut millions more dollars in spending for courts, transportation and educational oversight programs.

Among the health care cuts are limiting doctor visits to seven per year for people on Medi-Cal unless a physician certifies they need more, implementing co-pays on hospital and emergency room visits and eliminating the adult day health program that is intended to prevent people from having to be placed in nursing homes.

The adult day program serves 37,000 people at 310 centers. The program is to be replaced, though it will serve fewer people. Some centers have already closed in response to the cut.

In-home support slashed
The In-Home Supportive Services program, which serves the elderly, disabled and blind, also will be cut, with about 436,000 recipients getting a reduction of 16.5 hours per month of home assistance for things like meal preparation and bathing, according to a Democratic analysis of the cuts' impact.
Additionally, welfare will be limited for adults, cutting benefits from a five-year maximum to four years. Lawmakers, however, rejected the governor's proposal to reduce public assistance for children.
A $22 million reduction for state parks will result in the closure of 70 parks and beaches across the state, with a large portion of those in Northern California. The closures will begin in September and be completed by July 2012.

Higher education was impacted with $650 million cuts each to the University of California and California State University systems. Education officials have said those cuts will result in tuition increases even as increases in previous years have sparked large and sometimes violent student demonstrations.

It's not yet clear how much tuition will increase.

Assembly Speaker John Pérez, D-Los Angeles, said that Democrats who passed the budget on a partisan majority vote tried to make cuts that would cause the least harm.
A different state

"But to be clear, these are very difficult cuts that are going to impact a lot of people in the state on a day-to-day basis," he said.

Democrats at the Capitol say cuts since January total $15 billion, while Republicans say they believe spending reductions are actually around $7 billion. By either measure, California will look different.

"These cuts will come back to bite us. We'll lose federal matching funds, doubling the negative impact on health care providers and on our fragile economic recovery," said Anthony Wright, executive director of Health Access California, an organization that advocates for health care for the poor.

Wright added, "We've gone well past smart and strategic cuts to ones that are just plain stupid."
Many of the cuts could go deeper if projected revenues for the new fiscal year don't match reality. The governor and Democrats in the Legislature said this week that they expect an additional $4 billion next year, which was a major piece of closing the remaining deficit.

If that money does not materialize, there would be additional cuts. Those cuts would be tiered, meaning that, depending on how much actual revenues are short, some cuts would happen while others would not.
Endangered services

Among those is the department that oversees and funds services for people with developmental disabilities. That department was already cut $577 million this year, on top of $700 million in cuts two years ago. In the new fiscal year, those cuts will result in suspending new admissions and limiting the population at regional service centers.

Community-based organizations also are getting hit, like the Arc of San Francisco, which provides assistance to 550 people with developmental disabilities in San Francisco and San Mateo County.

Alan Fox, chief operating officer of the Arc, expects state cuts to result in the loss of $350,000 for the organization. He said pressure has been building for about a decade and that the system for people with such disabilities is at the breaking point.

"We turn a lot of people away who have very intense needs and not a lot of places to go," Fox said. If an additional trigger cut of $100 million to developmental services happens, Fox predicts many smaller organizations will close.

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