On June 6, 2012, the Women's Foundation of California held a bake sale at the Capitol Hill in Sacramento. The goal? To sell enough baked goods to balance the California state budget. We did the math and saw that to close the $15.7 billion budget gap we needed to sell 5.2 billion donuts, strudels and cookies at $3 apiece. We thought: a piece of cake!
OK, so our bake sale was a gimmick, but can you blame us? In today's polarized political climate, we're forced to resort to gimmicks to attract attention to important, life-saving issues. How do you debate, discuss and negotiate when so many of the legislators in California's Senate and Assembly have become addicted to one solution to our budget problems: cut.
But what happens when too much is cut? Those cuts endanger people's lives today and jeopardize our state's long-term economic recovery. Make no mistake about it. The proposed cuts will destroy people's lives. We are particularly concerned with the almost $1.7 billion proposed cuts to three programs: CalWORKs (welfare to work), childcare subsidies and Cal Grants, because they will expose the most vulnerable people in our state to even deeper and continued poverty.
The so-called "spending reductions" of the past four years have already been devastating for women. Our recently report authored by the California Budget Project, Falling Behind: The Impact of the Great Recession and Budget Cuts on California's Women and Families, showed that between 2006 and 2010, the employment rate for single mothers dropped by 10.4 percent; the percentage of older women living in poverty increased by almost 2 percent; and the enrollment in community colleges dropped by 130,000 students -- 82 percent of those students were women.
And why are we in this mess in the first place? First of all, the unique mix in our Business Climate Budget Fudge (Calories: 1.5 billion), provides an important clue. Claims that cuts to the budget will help the California economy are false. The cuts to CalWORKs (welfare to work) and subsidized childcare alone will take over a billion dollars out of California's economic stream. See, CalWORKs and childcare funds are pumped right back into the economy... these funds help pay for groceries, essential clothing and household supplies. The impact of these cuts will be felt by the retailers and small businesses that these families patronize and the workers that they employ.
Our other baked goods give a taste for what caused our revenue shortfall.
Tax Dodger Doughnuts (Calories: 6.5 billion) The State Board of Equalization website lists 500 deadbeats who owe the state of California over $500 million. The Franchise Tax Board estimates that tax cheats dodge $6.5 billion in taxes every year. If we can get these tax cheats to pay up, we won't have to cut affordable childcare programs for working class families.
EZ Bake Tax Break Cookies (Calories: 3.6 billion) Enterprise Zone (EZ) tax breaks have cost the state $3.6 billion, according to the California Budget Project. Businesses that close up shop and relocate to targeted "enterprise zones" are rewarded with substantial tax breaks, even if they don't create any new jobs. The state doles out $37,000 to employers for EACH worker they fire and replace in an Enterprise Zone. The Public Policy Institute of California found that EZs have "no statistically significant effect on either employment levels or employment growth rates."
Apple Double Irish Loophole Strudel (Calories: hundreds of millions) By employing a handful of staff in a small office in Reno, Apple has avoided millions of dollars in taxes in California and 20 other states. Apple also was among the pioneers in creating a tax structure -- known as "the Double Irish" -- that allowed the company to move profits into tax havens around the world. Apple created two Irish subsidiaries that allowed Apple to send royalties on patents developed in California to Ireland. As a result, some profits were taxed at less than half the American statutory tax rate. Moreover, the second Irish subsidiary allowed other profits to flow to tax-free companies in the Caribbean. Finally, Ireland's treaties with European nations allowed some of Apple's profits to travel virtually tax-free through the Netherlands and made the profits essentially invisible to tax authorities.
Supersized tax loopholes and tax breaks coupled with the belief that increasing corporate taxes will jeopardize the economy are costing California more than $10 billion a year in additional revenues. There are wise revenue solutions. Our elected officials just need to be willing to identify them and then take a stand.
If you agree that we can't continue balancing the budget on the backs of women and children, add your voice. Send a letter to your state senator and tell her/him that California women, children and families need revenue solutions not cuts.