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The Neoliberal Restructuring of California State Government
state budget cuts, the imposition of fee increases at post-K-12 educational institutions and the prospect of the passage of a water bond in November 2010 foreshadow the successful imposition of the neoliberal model on California
With last week's 32% increase in fees for students of the University of California, the regressive transformation of California state government is almost complete. State workers such as myself, a predominately middle and lower middle class group, remain on furlough three days a month by order of the Governor. In effect, the Governor has imposed a 15% pay cut on us. People that rely upon existing programs face delays and longer lines at state offices, regardless of the urgency of their requests.
Meanwhile, school districts across the state are scrambling to cut their budgets in response to reduced funding from the state, while home care workers are challenging cuts to their slightly above minimum wage salaries in court. As I summarized in early August:
Now, the students are in the line of fire. The fee increases are particularly egregious when one discovers how generous the UC Board of Regents have been in awarding salary increases and fringe benefits to high level administrators. Consider, for example, the new President, Mark Yudof:
Or, the newly hired Chancellor of UC Davis, Linda Katehi:
Apparently, in the first circle of hell, UC administrators are somewhere just below the managers of Wall Street brokerage houses when it comes to increasing their wealth while the rest of us struggle during one of the worst recessions in the last 150 years. But, to fully grasp the severity of the situation, there are two additional pieces of the puzzle that must be added.
Last month, after a special session, the Governor and the Legislature agreed to place an 11.1 billion, that's right, billion, dollar water bond on the ballot for possible approval in November 2010. Leaving the serious environmental issues aside, as it appears that the passage of the bond will facilitate projects that will result in the further degradation of the Sacramento-San Joaquin River Delta, there is the insescapable fact that it will increase the debt service obligations of the state. Even without the passage of the bond, these obligations are substantial:
Hence, there is a sinister synergy. Generally, as the state has become increasingly reliant upon the issuance of bonds to finance its operations, more and more of its tax revenue is being collected to distribute to wealthy bond purchasers who do not have to pay California state tax upon their interest income. In other words, there is a regressive redistribution of income from the broad tax base to wealthy bond purchasers. As the percentage of state revenue required for debt service increases, we can anticipate even more draconian cuts in state services going forward.
More specifically, there is also a redistribution of income from state workers, students and recipients of existing state services to UC administrators and the judiciary. If the water bond passes, this redistribution will become even more pronounced as they find themselves subsidizing new water projects for the benefit of agribusiness and southern California developers. In the absence of a shockingly good economic recovery, it is hard to see the future here as anything but bleak. And, even more alarmingly, it appears that the debt service noose is about to strangle the federal government as well.