Dale Kasler of McClatchy Newspapers is reporting that, now that California's aid to poor children, state park system, etc. have been led to the chopping block, the next victim will be the state's public employees' pension plans.
I keep wondering how much more damage the Republicans will make to our state before Schwarzenegger leaves office. We're one of the top ten richest governmental units in the world, but somehow there's no money for anything.
You can read the Kasler article in my local paper here.
What makes this particularly galling is that the public employees in California do not pay into social security, so their pension is basically all they've got. The article states that the current proposed changes will not apply to workers already in the system, but quite frankly I don't have much confidence that they'll want to stop there.
I keep wondering how much worse it's going to have to get before the people of California start to see through the Republican game plan. Pretty soon we'll be a banana republic at this rate.
I've surmised that about three quoted paragraphs constitute fair use, so I'll choose three to give a few details of the situation.
Reviving an idea he floated during budget negotiations in June, Schwarzenegger wants legislation creating a two-tier system that would deliver lower benefits to newly hired public employees — not only state workers but firefighters, police officers, teachers, and other local-government employees.
It's important to note, I think, that this is not the first time they've tried to downsize public employee pensions. I wonder how long it will be before public firefighters, police officers, teachers, and other government employees will be replaced by private sector equivalents, and the state doesn't have to worry about pensions at all. That is, I believe, the overall game plan, isn't it?
And I guess that if the benefits are lowered, then the employees need to educate themselves to deal with the market and 401k's like everybody else, and hope that they don't plan to retire at a time of a bubble bursting.
Although current workers and retirees would not be affected, Schwarzenegger's plan has enormous long-term implications for the Sacramento area, where state employees make up 10 percent of the work force. State workers, already smarting from their 14 percent salary cut caused by furloughs, consider their pensions something of a birthright — a reward for paychecks that lag behind those of the private sector.
Again, it's important to note that this comes on top of salary cuts for state employees that have already been implemented.
One could argue that this is simply a problem with the current financial crisis. However, I'm with Naomi Klein and her Shock Doctrine hypothesis - that the problems started long ago, and that the current crisis simply makes them all too obvious, and also opens the door to changes that would not be countenanced otherwise.
How different our situation is from that of my childhood in the 50's, when the economy was strong, jobs were plentiful and individual's taxes were manageable.
Speaking of revenue sources, I found an interesting overview on the California budget and its problems on a blog called the Ojai Post by Sean Keenan. You can see it here. It's actually a quite valuable overview of the problems that gum up the works with California's budget.
and there is a nice graphic from that same post here.
What I wanted to note in this graph was the relatively small contribution by corporations (10%). It seems to me that the actual contribution is higher because of income tax and sales & property taxes paid by corporations, but I don't really know this arcana well.
What I do seem to remember, though, is that at one time, maybe fifty years ago, the proportion paid by corporations was much higher, perhaps even over 50%. I've been looking all over the web for evidence of this, but have come up short so far.
I did find this graph, showing the decline of corporate funding for the whole country as a percentage of the overall economy, which is from a blog post at the "Economic Policy Institute" by Lee Price and Max Sawicky, available here.
Perhaps this national viewpoint is appropriate, though, because of this bit reported by Dale Kasler:
However, at least 10 states have cut benefits for newly hired workers in the past five years.
Here's another graph that shows something similar.
It's from a rather long series of posts by Elaine Meinel Supkis that is available here.
Of course, some (like my Limbaugh-loving father) might argue that large corporations should not be taxed at all, that only individuals should be taxed. I don't see it that way. But even if I did, I can see that the gradual withdrawal of money from the public system on the part of large corporations means that the slack has to be taken up somewhere. And that this "somewhere" has been increased taxes on individuals (in addition to increasing fees, etc.). No wonder people are so willing to revolt all the time as their own taxes get higher and higher.
Certainly I saw this lately in the recent BART almost-a-strike. One reason the union settled, according to the San Francisco Chronicle, is that the public, hurting from their own lack of income, simply wasn't as sympathetic to the BART workers as they might have been in previous years.
And isn't that the way it always works? The organizations or individuals with wealth withdraw it from the system, leaving the rest of us to squabble with each other rather than recognize and deal with the source of the problem.
Well, I have to go do out for a while, so I won't be able to respond to comments. But I was upset when I read this a few minutes ago to the point that I had to express something, even if it meant being late for appointments. A search on DAILYKOS seemed to indicate nothing had been said about this, so I started writing.
Dang, I just can't seem to find the graph I'm looking for, about California State taxes. I did find a long article discussing the decline in states' abilities to tax corporations, but no graph.
Anyway, I'm wondering if anybody will have any pensions / social security left the way things are going.