California government shows its true colors amid budget crisis

At the same time, capitalist enterprises having been laying off workers wholesale to boost their bottom lines. Consequently, demand for state services by the unemployed has been on the rise.

Property taxes are divvied up according to complex formulas that vary for each municipality. The basic 1 percent tax is split among K-12 schools, community colleges, counties, towns and special districts. The Legislative Analyst’s Office projects the state will have to pony up almost $1.5 billion to K-14 schools over the next three years to compensate for declining property taxes.

According to ForeclosureRadar.com, about 250,000 homes in California were repossessed by lenders last year. K-12 education, which normally receives about 40 percent of general fund tax money, is likely to take the biggest hit. Schools are preparing for large-scale teacher layoffs, ballooning class sizes and even shorter school years.

As is the case in all capitalist economic downturns, working people are bearing the burden of the present crisis. When the capitalist economy is in the growth or boom phase of its cycle, the corporate media extol the virtues of the market system and how the few risk-taking capitalists deserve to keep all of their profits. These profits are nothing more than what is stolen from the working people, who produce all social wealth.

But when the capitalist economy turns down, we are told to brace ourselves for impact. We are told that we are helpless, and there is no choice but to go through some hardship because the market is going through its bad time, and nobody can do anything about it.

And, most importantly, “it’s nobody’s fault.” It is not the fault of the banks or the corporations that have stolen billions of dollars. It is not the fault of ruling-class politicians who have enriched themselves and their clients in corporate America. And, above all, it is not the fault of the capitalist system.

The working class is expected to accept the crisis like it is a natural disaster. It just happens, nobody is at fault, and we just have to live through it, all of us workers making some sacrifices.

The people who have gained enormous riches from the profit system, which is the cause of the misery, are not asked to make any sacrifices. Rather, the sacrifices of workers pay for the bosses’ safety nets—bailouts, tax breaks, guarantees against taking losses on bad debts and government investments in the private sector.

California’s economy—the largest of all 50 states and among the top 10 economies in the world—has long been considered by pundits to be a bellwether for national economic trends. The state’s economic crisis does not spell good times ahead for the country.

In January, California’s Gov. Schwarzenegger proposed a budget plan for the next fiscal year that would take billions of dollars from public schools and shut down four dozen state parks.

According to Schwarzenegger’s plan, virtually every department in the state will be required to slash 10 percent from this year’s spending. The move would cut services for many Californians—particularly the poor, the elderly and the disabled. The proposal cuts benefits for about a third of the unemployed by as much as $44 a week.

Last week, California was forced to borrow from a federal fund so that it could continue paying unemployment insurance benefits to the state’s growing number of jobless residents. The state is on notice from its financial officers that next month Sacramento will run out of cash and will need to pay its bills with IOUs.

Due to the state’s severe cash shortage, State Controller John Chiang has said he will have to delay tax refunds and some other payments for 30 days starting Feb. 1. Schwarzenegger, with the backing of the courts, has also ordered tens of thousands of state employees to take two days off a month without pay beginning Feb. 6, scrapping the required labor negotiations with union workers..

With all the lip service that ruling-class politicians at all levels pay to education, schools are usually among the first to be hit with budget cuts. Schwarzenegger is calling for a shorter school year, which would trim five days off the 180-day school year. California is already 47th among the 50 states in per-pupil spending.

If all that was not enough, Schwarzenegger’s proposal includes a number of regressive tax increases, whose weight rests primarily on the shoulders of lower-income workers. The proposal includes a tax on certain services, and hikes the sales tax by 1.5 percent through the end of 2011. The proposal increases income taxes and taxes on alcoholic drinks and gasoline. It also includes taxes on repairs for automobiles, appliances and furniture, as well as veterinary care and amusement park and sporting event admissions. The vehicle registration fee is targeted for a $12 increase.

The tax on services is part of $14.3 billion in hikes Schwarzenegger has proposed. He also is seeking $17.7 billion in spending cuts and $10 billion in additional borrowing by the state.

As might be expected, the proposed budget has no tax increases for the corporations or the wealthy. It increases revenue by putting more taxes on working people. Also, California could easily cut tens of billions from its expenses by putting an end to its mass incarceration program. Hundreds of thousands of people are in California jails for drug offenses, which have become a pretext for incarcerating working-class people of color and the poor.

But the prison-industrial complex is part and parcel of the state’s repressive apparatus, and is thus spared from significant cuts. In times of crises in particular, the capitalist class leans heavily on its instruments of repression to contain the dissatisfaction and anger of the working class.

The California budget crisis exposes the real role of government in the United States, not only at the state level, but also above and below. The legislature and the executive offices represent the interests of the capitalist class. The role of government is to protect private property rights and maintain economic conditions that enable big corporations to reap profits from the labor of the working class.

Among all the plans on how to balance the budget, there has not been a single, serious proposal to cancel or impose a moratorium on the payment of interest on the state’s debt to the banks. Much of California’s state income goes to the banks in the service of its debt. In fact, the California constitution mandates that payment on the debt be the first item to be paid ahead of any other expense, except for a few educational items. The constitution itself ensures that banks get their share, even as people starve and go homeless. Its guiding principle is profits over people.

History teaches us that popular gains are made only through struggle. The current capitalist economic crisis has put in place conditions for a potential increase in the level of struggle against this corrupt system. It will take a working-class movement to make the rich pay for the crisis they and their system have created.