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Funding California's Future

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As our March for California's Future makes its way closer to Sacramento the bottom line is this: we need to get serious and decide what kind of future we want for our children and our children's children. Do we want to spend more money on prisons than on schools? Do we want to sacrifice opportunity for the majority of Californians so those at the top of the economic ladder and some of the most powerful corporations do not have to make any sacrifices at all?

Consider the fact that the top one percent of earners in California has nearly doubled its share of income over the past twenty years from 13 percent to 25 percent. Ponder the reality that, despite the mantra of the anti-tax zealots, taxes are not higher now in California than they have ever been. In 1993, for instance, the highest marginal tax bracket in California was 11 percent while today it is only 9.3 percent. (There is a temporary 1 percent surcharge on people who make $1 million a year due to the budget deal of two years ago, but that expires this year). Restoring the top brackets to what they were in the 1990s would bring in $5 billion per year.

If we look at corporate taxes, a recent report by Forbes documented how many of the most powerful corporations in the United States pay no taxes. For example, General Electric made over $10 billion dollars last year and actually got over $1 billion back in Federal tax rebates. Many other big corporations pay no taxes while you and I are left to carry the load.

In California, corporations only contribute 11% of the state budget whereas, in 1980, they contributed nearly 15 percent. Of the 21 states that produce oil, California is the only one that does not have an oil severance tax. Disneyland pays a nickel per square foot in property tax while the typical family is paying $2 a square foot for their home.

We've also given away billions of dollars in corporate tax loopholes over the past two decades; the horse-trading to reach budget agreements has led to bad fiscal decisions that have robbed us of much-needed revenue.

Enacting reasonable taxes on corporations, oil extraction, and commercial property holdings would bring in many billions more in revenue to help fund education and vital public services like police, fire, home and health care, and state parks. Closing corporate tax loopholes could replace closing schools.

While many of those who bemoan the oppressive costs of "big government" like to portray California as a state with a "spending problem," the reality is that we are misers in comparison with many other states. We have the largest education budget of any state because we have the largest population of any state, but if we consider our spending on a per resident basis, the "spending problem" myth doesn't hold up. California ranks 47th in the nation in per pupil spending in K-12 education, 45th in the nation in spending per community college student, and 48th in the nation in the number of state employees per resident.

In fact, state general fund spending has been reduced from $102 billion to $84 billion over the last two years. When one factors in population and inflation, state spending has not increased by 80 percent over the last ten years, as Meg Whitman likes to claim; it has actually decreased by 17 percent over the last ten years.

In this context, the fact that California is the only state in the union to have a two-thirds legislative majority requirement to pass a budget and to raise revenue seems more like an undemocratic wall around the castle of privilege than protection for ordinary taxpayers. Indeed, it only takes a simple majority to give out a corporate tax break, but it requires two-thirds to fund our children's schools. In contrast to the mantra of the corporate PR machine that California is driving business out with its heavy tax burden, our state ranks 32nd highest in terms of business tax rate as a percentage of private sector economic activity.

Thus the choice is clear. We can destroy our children's future for the sake of maintaining the biggest gap between the rich and the poor since the Great Depression -- or we can act as if our futures are inextricably bound to the futures of our neighbors. We can surrender to a bleak social Darwinist vision--or we can live for something larger than ourselves, and invest in the future of all Californians.