No tax hikes in governor’s budget plan? Not exactly |

No tax hikes in governor’s budget plan? Not exactly

In a remarkable letter to his supporters, Gov. Arnold Schwarzenegger claims his May budget revision “solves the state’s long-term budget problem… without tax increases.”

If that were true, Schwarzenegger’s favorite word ” fantastic ” would apply. But not even the governor calls his austere plan anything like that. Even he conceded elsewhere that it might trigger one tax increase. Just in case legislators don’t put his planned $15 billion in lottery anticipation bonds on the November ballot, or if voters turn the bond down, he wants a 1 percent sales tax increase for at least the next three years.

Not exactly no new taxes.

But it gets worse. Rather than tax any services or risk proposing even a slight increase in state income levies, Schwarz-enegger seeks to foist a host of new costs and fees on the often-voiceless people who can least afford new expenses. These include legal immigrants, college students, ill persons shut in their homes, low-income working parents and children of mothers on welfare.

Almost everyone in these categories would see expenses rise considerably just to maintain current levels of health care, education and even nourishment.

Would this balance the budget “without new taxes,” as Schwarzenegger bragged? Not really. Rather, it would transfer the state’s deficit to those who don’t vote, or don’t vote much. And if taxes are defined as payments one must make, like it or not, this plan features plenty. Many expenses the governor would cut are just not optional. Which makes them amount to taxes under a different name.

It has also never been more clear that those who can’t or don’t vote end up paying for it.

Every group most impacted by this proposed budget is one that’s either not represented at all or under-represented among both the state’s registered voters and those who actually turn out.

Besides that, there was Schwarzenegger’s boast about solving the state’s long-term budget problems. He’s apparently the only one who thinks this is the Eureka! solution.

For his plan hinges on another $15 billion worth of borrowing, this time against anticipated receipts of a hyped-up state lottery, which the governor estimates would pull in well over $5 billion a year above what it does now.

Question: If the lottery can be juiced up that much by some private company, why can’t the state fix it and keep all the new money? Either way, apparently, voters would have to approve a change in today’s prescribed 34 percent contribution of lottery proceeds to public schools.

But the big problem with this budget plan is not its borrowing, which would add to the already huge $5.2 billion the state pays each year to service existing bonds – half of which goes toward bonds issued under Schwarzenegger. That’s right, half the current bond payments are for debt run up in just five years of a governor who vowed to “throw away the credit card.”

Even worse is what this plan does to people least able to defend themselves.

Its deep cuts aim to save $627 million by ending assistance to many adult immigrants who have been in American legally five years or more. Those immigrants could still get treatment for emergencies, pregnancies, breast and cervical cancer, but would be on their own for everything else, including all preventive services and routine doctor visits.

The reductions would eliminate dental benefits for adult Medi-Cal beneficiaries and cut payments to doctors who accept Medi-Cal patients by about 10 percent. That would cause hundreds, maybe thousands, of doctors and dentists to refuse treatment to the poorest Californians.

Other health cuts would reduce Medi-Cal rolls of children from low-income families by about 430,000 over four years, according to an analysis by the Sacramento-based California Budget Project. Meanwhile, the proposed spending plan would put a $1,000 limit on yearly dental expenses for poor children in the Healthy Families program.

Then there’s the 10 percent increase in tuition and fees for students in the Cal State system, with University of California costs increasing only slightly less.

Plus slashes in funding for in-home supportive services for the ill and a 5 percent cut from CalWORKS grants going to welfare mothers who meet work-participation requirements.

For a family of three, this planned reduction amounts to $36, from $723 per month to $687.

Add it up, and you have severe penalties and a need for increased payments by poor people of many types and ethnicities. The main thing they have in common is that they either can’t vote or don’t vote in large percentages. So much for spreading the pain among all Californians.

No one can claim anymore that Schwarzenegger fails to prioritize, as was the accusation when he proposed across-the-board cuts in January. It’s just that his current plan imposes the most on those who can least afford it and can do the least to fight it.

Thomas D. Elias is a syndicated columnist who writes about California issues. Contact him via e-mail at

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