California budget: $7 billion in cuts, tax breaks for big business

The budget imposes cuts in social spending in California that dwarf the budget cuts in Illinois, New York and every other US state. It sets in motion a mechanism of continuing austerity aimed at dismantling the remains of a system of social protection and economic underpinnings for working families, the poor and the disabled.

The budget technically meets the requirements, insisted on by the Republican legislative minority, that there be no new taxes and no further borrowing. It also creates a series of permanent corporate tax breaks that will work to further impoverish the working class at a time when millions of Californians are facing foreclosure and homelessness.

In return for a one-time, two-year suspension of some corporate tax credits, the budget rewards California businesses with two kinds of new lucrative tax breaks: it refunds businesses in so-called bad years from taxes that they paid in more profitable years, and it allows businesses to transfer tax credits among divisions.