Opinion: Could an Arnold-Style bond save the state?
If there’s one word that properly describes the massive budget cuts proposed by Gov. Gavin Newsom in May, it is “slapdash.”
Until the governor ordered the vast majority of Californians to shelter at home indefinitely to stem the spread of the coronavirus, no one expected more than routine changes in the annual May revision of his proposed state budget. But the lockdown brought instant recession, worse in some ways than the Great Depression of the 1930s.
That stunned state budget planners. The May revise shows they reacted swiftly, but not surgically. Rather than pick off items containing waste, they slashed almost everything, from state parks to health programs to public schools and universities.
Even a cursory look at the planned cuts shows one consistent thread: The neediest will be hit hardest. For some, survival itself is threatened.
There is a solution to all this, one last used in 2004 by ex-Gov. Arnold Schwarzenegger at a time when the state also faced a huge budget deficit promising almost as much harm as Newsom’s May revise. The movie muscleman suggested borrowing our way out of the crisis, getting voters to approve a $14 billion-plus bond. It was paid off 11 years later during flush times when the final payment was hardly noticed.
A bond twice that large could solve virtually all today’s problems, and was first proposed by Jim Wunderman, CEO of the business-oriented Bay Area Council. If most economic experts are correct and California’s fundamentals remain sound enough for a major comeback after a vaccine debuts, this is an obvious way out.
Failure to do judicious borrowing could lead to great suffering and even death for some of the state’s most vulnerable residents. Perhaps the neediest are clients of the In Home Supportive Services program, which sends caregivers into homes of the elderly poor a few hours daily, helping with everything from bathing to basic house cleaning.
The cut Newsom’s staff proposes to this program could end up costing far more than it saves, financially and in human terms. “This could give people a choice between being helped to get out of bed and shopping for food,” said Claire Ramsey, staff lawyer for a group called Justice in Aging. “The program is vital in ordinary times because it keeps people out of nursing homes, which cost much more than this kind of care. But now there’s an absolute need to keep people out of hospitals and nursing homes (where almost half California’s coronavirus deaths have occurred). This cut can lead directly to sickness and death.” Not to mention sky-high hospital and nursing home bills dwarfing any budget savings from the program cutback.
Newsom also proposes eliminating Community Based Adult Services and Multi-Purpose Senior Services programs, which offer some similar services.
Consequences of these moves can be even more serious than the effects of opening schools late this summer and fall, as six of California’s largest school districts say might happen because of proposed cuts. Yes, that’s important. The less time children spend in school, the more their future can be impacted, even if they tune into virtual, computerized classes.
Early childhood education, formerly a Newsom pet program, also could be slashed, one likely result being that poor kids will fall farther behind the wealthy than they are now.
The good news here is that state legislators appear opposed to most of the worst planned cuts. The bad news is they don’t know where to find money to avoid them, short of tax increases.
A bond answers that quandary. Borrowing to see vital programs through this time amounts to investing in the state’s future.
Wunderman points out that higher taxes would be unpopular, and probably unwise, in a time of high unemployment and uncertainty for thousands of businesses. A bond, he said, could help avoid the worst fiscal effects of the virus, also letting California exploit historic low interest rates.
It makes sense, it could save lives and misery and it would not burden today’s taxpayers much. So it’s high time state legislators take the initiative back from the governor. Put a bond on the November ballot and follow the Arnold example.
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Email Thomas Elias at firstname.lastname@example.org. His book, “The Burzynski Breakthrough: The Most Promising Cancer Treatment and the Government’s Campaign to Squelch It,” is now available in a soft cover fourth edition. For more Elias columns, go to www.californiafocus.net.