California’s budget depends on revenue, and this year’s budget deal depended on a certain level of revenue. But if either of two agencies decides the state isn’t likely to have enough revenue, then the spending level will be cut. That’s what we’re facing this winter.
What determines the cuts? Two state agencies will make economic forecasts, one in November, one in December. The forecast with the higher revenues is the one that will be used.
What we’re facing are what the state calls “tiered cuts.” If revenues are forecast to be $1 billion short, the state will make “tier 1” cuts. If revenues are $2 billion short, the state will cut even more, hitting “tier 2.”
The cuts will be deep, all taking effect for the last six months of a fiscal year—which means the cuts will be twice as deep as if they had been made for a full year. And in many cases, the cuts at the state level will mean a loss of federal matching funds, so services will be cut twice as much.
Who will take the cuts?
- Home care workers will face a $128 million cut over six months. Joined with federal and county-level cuts, they’ll see an annualized cut of more than $700 million. That’s a tier 1 cut.
- Bus drivers, who get our children safely to school and back, will see a $248 million cut under tier 2. That’s a 70 percent cut in funding, which will result in massive layoffs for bus drivers and more danger for students getting to school.
- The workers in regional centers across the state could face furloughs, layoffs and increased caseloads after a $100 million cut under tier 1.
- And hundreds of millions of dollars in cuts to education, from kindergarten to college, will affect our families whether we get tier 1 or tier 2.
Private companies will avoid hiring new employees during a recession. When sales are down, tax revenue for governments drops as well. That’s why Congress must pass President Obama’s jobs plan. Building infrastructure, teachers in schools, all of these things provide huge benefits in the future, but more importantly they put people to work today. That will create demand, stimulate the economy, and provide more jobs.
—Matthew Hall, planner, Kern County
