Teachers Fired To Pay For Huge Corporate Tax Cut — Why?

This post originally appeared at Speak Out California
I’ve been asking around and it seems that most Californians don’t know that the budget deal that fires so many teachers also has a huge tax cut just for big, multi-state and multi-national corporations.
But it’s true. Last month’s budget deal that fires teachers, cuts essential government services, and guts the investments that bring future economic benefits also has a huge tax cut for the largest of corporations. While this part of the deal has been kept pretty quiet, the LA Times had a story, Business the big winner in California budget plan. From the story,

The average Californian’s taxes would shoot up five different ways in the state budget blueprint that lawmakers hope to vote on this weekend. But the bipartisan plan for wiping out the state’s giant deficit isn’t so bad for large corporations, many of which would receive a permanent windfall.
About $1 billion in corporate tax breaks — directed mostly at multi-state and multinational companies — is tucked into the proposal.

But wait, won’t a big corporate tax cut cause companies to come to California, creating jobs? No, they are already here and it will drive them away, because it is paid for by firing teachers.

A study by the nonpartisan Public Policy Institute of California, released in 2005, found that most companies decide where to locate based not on tax breaks but on factors such as the availability of a highly educated workforce. California’s proposed plan would cut spending on higher education by hundreds of millions of dollars.

So how did this happen? This was part of the deal to get a few Republican votes. And why did the Republicans want this so bad? Because they understood who really elected them.
If you look at the independent expenditure reports for the 2008 California election you’ll see a massive amount of last-minute money. For example, in the 19th Senate District, a political action committee (PAC) named “Californians for Jobs and Education” put almost $1 million into just one race: $570,653 into defeating Democrat Hannah-Beth Jackson, and another $373,778 to help elect her opponent, Republican Tony Strickland. When you look this group up on ElectionTrack you learn that this money came from corporations like Arkansas’ Wal-Mart, Blue Cross of Ohio (Ohio?), Reliant Energy, major real estate companies, and from other PACs.
Now it gets interesting. Many of the contributions to that PAC came from other PACs, especially one called Jobs Pac. When you track down Jobs PAC you find that it is a conduit for huge, huge amounts of money coming from large corporations like Philip Morris, ATT, Chevron, Safeway, Sempra Energy, Verizon, big insurance companies, big pharmaceutical companies, big real estate companies … and other conduits like the Chamber of Commerce.
Why did these huge corporations put so much money into California state elections? Because we let them, and because of the return on investment they receive from tax cuts like the one that is forcing us to fire so many of our teachers.
There is a key lesson to learn from this. When it comes time to choose, that is when you can really see who is for or against something — where their priorities really are. And in this case, when push came to shove, in the end who did the conservatives come through for? The large corporations. They danced with the ones that brung them.
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Put Up Or Shut Up, Please

This post originally appeared at Speak Out California.
There was a positive response to the idea from last week’s post, No Schools For You, that suggested,

“If an Assembly or Senate representative demanded cuts to schools, fire, etc. then the schools, fire, etc. in that representative’s district receive the entire cut! This would be an honest application of representative democracy, allowing the citizens of an area to be governed according to their wishes without it affecting all of the citizens in the state.”

Seriously, the leaders of the Assembly and Senate should make the few Republican holdouts an offer: if they think government services to the state’s citizens are such a bad idea they should stop insisting on so much spending in their districts! They say that government spending is a problem, why can’t they take those Republican governors who are refusing to accept any stimulus money as role models and refuse any state spending in their districts. Their constituents can then show their overwhelming support for the anti-government ideology that their elected representatives espouse.
Several years ago, then-Senator Phil Gramm of Texas – a Republican – was one of the loudest to complain and complain about spending and “pork” and “earmarks” in the federal budget. What is called “pork” and “earmarks” are special appropriations of funds by the Congress for specific projects in specific districts: a museum, science lab, agricultural study or bridge that is badly needed is funded by our government. This is what Republicans call “pork” — government doing things that citizens need. Well the biggest, most expensive project in the country at the time was the Superconducting Super Collider, a massive physics lab being built under the ground in Texas, employing hundreds and keeping many construction businesses going. Well, when it came time to cut some spending the Congress took Senator Gramm at his word and killed the project.
So I think that it would be a very good idea to ask the Republican anti-tax ideologues to put up or shut up. Give them the opportunity to put their (take away the) money where their mouths are. If you want spending cuts, let us cut all the spending in your districts — or please shut up.
Your thoughts? Leave a comment.
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California Government Is Good People But The System Is Designed To Fail

This post originally appeared at Speak Out California
I was in Sacramento for some meetings this week, and have a few thoughts and observations.
The first is the most important. The people in and around our government are good, dedicated people who are doing those jobs because they care and want to do the right thing. You don’t make big money in public service. In the last few decades a government job meant less pay than a comparable “private” sector job and a number of working-environment hassles, like the extra procedures (paperwork and bureaucracy) that are required in public positions to involve transparency and accountability. And, of course, they have to put up with the Republican-inspired abuse of people who work for the government. So give these people a break and assume good faith.
After decades of budget cutting our government is universally strapped for resources and it makes for a difficult workday. The things people went into public service to accomplish are being stripped out from under them by the state’s structured-to-fail system (see below). I hope the Bush years trigger some serious thinking about what things would be like without a government, because we are getting close to that possibility.
The state government is now structurally designed to fail — and this latest budget deal compounds the problem. This situation was created on purpose by anti-government ideologues, usually corporate-funded. Thus really is a choice between government by the people or government by a wealthy few who happen to be in control of large corporations. To them government is “in the way” of making money. Government means food and safety inspectors so people don’t get sick and workers don’t get hurt, and protecting workers and the public costs them profits. Government means regulations stopping them from dumping stuff in the water or air and properly disposing of waste costs them money. Government means regulations that make them pay back customers who are overcharges. Government means regulations requiring delivering goods and services that were promised. SO you can see why the hate government and regulation — they keep them from just taking your money and giving nothing back!
So they have used the power that comes from their access to corporate resources to set up a state system that is giving them what they want. They pay petition-gatherers to get anti-government initiatives on the ballot, and then they flood the TV and radio with lying ads that trick people into voting against their own interests — and here we are.
Here are just a few of our designed-to-fail structural problems:

  • Term limits mean that thinking must be short term, and encourages passing problems along instead of solving them, because then the problems will be “not on my watch.” People who are effective in their jobs are forced out, and voters who want to keep them there are prevented from doing so.
  • The campaign-finance system puts corporate-backed candidates in office by necessitating big money to win elections. And corporations, designed to amass resources, are perfect vehicles for pushing the interests of the few who control them.
  • The two-thirds budget requirement means that a few anti-government extremists are able to sabotage the process, keeping any budget from passing and shutting down the state.
  • The disappearance of political reporting in California media means the state’s citizens are uninformed about what is going on. The corporate-owned media concentrates on sitcoms and what Britney is wearing, and does not let the people find out what government is about.
    These are just some of the structural problems, and the system is. of course, structurally designed to keep us from fixing them. The only way we are going to address this is to get lots and lots of people involved. The election of Barack Obama tells us this is possible but I despair at amount of work that will have to be done to accomplish it.
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  • The California Budget Agreement

    Dave Johnson, Speak Out California
    California finally passed a budget. It is a bad budget, cutting essential services, borrowing a tremendous amount, selling our lottery revenues and giving a huge tax break to big out-of-state companies. Each of these came from demands by the very, very few Republicans who agreed to vote for the budget at all will, of course, just get us through another year while making it ever more difficult to pass future budgets.
    California’s 2/3 requirement means that a few corporate-funded extremists can hold the rest of us hostage. So they had to make a terrible deal to get the three Republican votes required by the 2/3 rule, or else lay of tens of thousands and stop paying California’s bills. We the People of California were all held hostage to that threat.

    Continue reading

    CA’s Budget Problem Is Paragraph 10

    This post originally appeared at Speak Out California
    Today’s San Jose Mercury News front page story is about California’s budget problem: that they are still one vote short. But Californians reading the story are not told why one more vote is required, not are they told who it is required from — until the 10th paragraph. The 10th paragraph reads,

    The votes were there in the Assembly. But in the Senate, only two Republican senators were prepared to buck party orthodoxy and vote to raise taxes. Three were needed.

    Even in this 10th paragraph readers are not informed that every Democrat is voting for the budget.
    Before this paragraph, readers are told that “lawmakers” cannot agree and that “the deal still was held hostage by the thinnest of margins.” But there is nothing telling them who or why.
    The reason this is such a problem is that the people of California need this information, to help them play their part in the functioning of our state government. The voters need to know who to hold accountable or they will not make their wishes known through calls to their Assemblymember’s or Senator’s office. And they can’t make informed decisions at election time.
    This is typical of stories about the budget impasse — across the state the major newspapers, radio and TV stations are not giving the voters the information they need in order to participate in their government. The result is that the state is becoming ungovernable — and going broke.
    So let’s be clear about what is happening here. California’s elected Republicans have all signed a “no-new-taxes” pledge with Grover Norquist’s organization. (He’s the guy who says the plan is to make government small enough to “drown in a bathtub.”) So now they see the budget crisis as an opportunity to force mass layoffs of state employees and reductions in support for people who need things like state-supplied oxygen tanks. They call that “reducing government.” And even with all the budget cuts that the Democrats have all voted for, they still will not vote to pass a budget. They want more, and then more, and then they want the state government to go away.
    This is ideology. They repeat an ideological mantra that will ruin the state. And they say this is their goal — to get rid of government. They say government is bad. They say government spending is bad. They say taxes are bad. They say corporations are good. Ideology.
    California can not continue to fund our schools, universities, roads, public safety, firefighters, health services, services to the poor, blind and elderly, provide funding for local government, etc. without additional revenues. Do the Mat (George Skelton, LA Times):

    It’s Republican dogma in the Capitol that to vote for a tax increase is “career-ending.” Even if true — and there’s evidence both ways — so what?
    These are folks, after all, who sermonize against making politics a career, publicly pretend to worship term limits and preach the virtues of private enterprise. You’d think they’d be eager to return to the private sector. Yet, they’re afraid to risk losing out on their next political job.

    Another item not reported is that the Republicans demanded a huge tax cut for large corporations — the very kind that are killing off California’s smaller independent, job-creating businesses.
    And they still won’t vote for the budget. And the public still doesn’t have a chance to learn what is going on here.
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    Something Good On CA Budget Mess?

    This post originally appeared at Speak Out California
    There is some good news on the prospects of getting a budget in California. Eleven California newspapers including Sunday’s San Jose Mercury News carried a near-unprecedented front-page editorial titled, Outrageous budget fiasco has shamed California, calling out the Republicans for not participating in the budget process, saying,

    “… [M]ost of the blame for the immediate crisis falls on Republicans in the Legislature, who this past summer — to a person — signed a pledge to not raise taxes. … Democrats and the Republican governor have offered significant compromise, but GOP lawmakers cling to ideological purity — schools, health care and other essential responsibilities be damned.”

    The reason this is good news is that this is a sign that California’s media may be beginning to explain to the public that there is indeed a bad actor in this fight. Until now the public has been hearing from the media a simplistic “they’re fighting like children in Sacramento” or “both sides refuse to compromise.” Nothing could be further from the truth.
    The fact is that the Democrats have voted for cut after cut, and have tried and tried to reach a compromise. They are trying to govern the state. But every single elected Republican signed a pledge with a Washington, DC anti-government organization — the one that said they want to “drown the government in a bathtub” — promising to vote against any budget that increases state revenues in any way. They took what they call “the pledge” and have refused to budge and refused to compromise in any way.
    California’s major media is finally, finally starting to bring these facts to the public, which means that the public will begin to apply the pressure that is needed in a democracy to move the Republicans and get them to participate in the budget and governing process.
    And in the longer term, this information means the public will be able to decide whether they really do want to elect people who hate government — and who take vows to defund government — into positions of responsibility for managing the government.
    If we cannot get an increase in revenues California’s economy will be in real trouble. On a national level Rush Limbaugh says he “wants Obama to fail” and in California the far right is driving failure as well. We need responsible information sources to reach California’s voters with honest information.
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    Our Businesses Thrive On The Infrastructure We Built

    This post originally appeared at Speak Out California
    The key to California’s successful business environment are education and infrastructure. It is not an accident that our semiconductor and computer and Internet industries, and biotechnology and pharmaceutical and genetic engineering and our other world-class competitive industries developed in California instead of in “low tax” states like Mississippi and Alabama. These industries thrived here because of our well-educated people and our modern, well-maintained infrastructure.
    There has been a dramatic wealth-building return on our investment in education and infrastructure. Investors could count on California as a good place to start and grow a business, and it has paid off.
    But how much would it cost if businesses had to pay fair market value for use of the infrastructure that We, the People built? What would it cost if companies had to pay the full education cost every time they hire someone who was educated at a California public school or state college or university?
    What would it cost if companies had to pay to be provided with police and fire protection? Should companies pay a fee to have the police investigate, catch the perpetrators, and then put them through the criminal justice system?
    What would it cost if companies had to pay fair value to use our roads and air- and seaports.
    What would it cost if companies had to pay for access to the legal system that We, the People set up. We passed the laws and paid for the courts. We set up the entire legal structure.
    We, the People pay to regulate (and apparently bail out) the banking and financial system. What would it cost if businesses had to pay us for setting up this system that (used to) keeps our money sound?
    This is what government and taxes are for. We, the People built up California’s comprehensive physical, legal, cultural, education and societal infrastructure. Businesses rely on that infrastructure, and we want them to thrive. This benefits us all. Many, many people became wealthy by betting on California as a great place to do business, and we are proud of that. Now it is tome to give something back.
    Building and maintaining that infrastructure does cost money, and that is where taxes come in. For several years California has been cutting taxes and cutting back on our investment in education and infrastructure. Businesses cannot continue to thrive as they have if we continue along this path. We have reached a point where the tax-cutting has brought our state’s education spending to the second-lowest per-pupil of all the states! We have been and are deferring maintenance on roads and other infrastructure. We are cutting back on all essential services and we still have a $40 billion budget shortfall!
    Our companies are getting a good deal. If we charged fees that were based on the actual value of the service that the infrastructure provides businesses would have to pay much, much more than any level of increased taxes companies and wealthy individuals might be asked to pay to help California meet the budget shortfall. The businesses and individuals who thrived because of the infrastructure we built need to contribute to the future by agreeing to pay taxes to help invest in rebuilding that infrastructure.
    The payoff is clear. As I wrote above, there is a reason that Silicon Valley and genetic engineering and other wealth-creating industries developed in states like California and Massachusetts instead of “low tax” states like Mississippi and Alabama.
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    California – The State Of The State Is Ungovernable

    This post originally appeared at Speak Out California
    “People are asking if California is governable.” Governor Schwarzenegger said in the State of the State address today that California faces insolvency within weeks. He said there is more gridlock in Sacramento than on our roads, if that is possible.
    The governor gave a very short speech, saying there is no sense talking about education or infrastructure or water or anything else as long as we have this huge $42 billion deficit.
    But the fact remains that the state’s requirement that 2/3 budget-approval requirement means that the state is, in effect, ungovernable. A few anti-government extremists are able to continue to block the budget, refusing to compromise or even negotiate, demanding that the state lay off tens of thousands of workers, slash medical help for the elderly, slash police protection and firefighting capability, slash funding for courts, raise class sizes to 40 or 50 students, stop repairing roads and levees and everything else the state government does.
    David Greenwald writes at California Progress Report wrote, in State of the People is Grim: More Budget Cuts Are Exactly the Wrong Prescription,

    “Budget cuts totaling $16 billion over the last three years have already had severe consequences for the people of California. And the Governor’s proposed 09-10 budget would further harm California families and our economy with an additional $17 billion in cuts to schools, health care, homecare, and state services.”

    Leading up to the speech, David Dayen at Calitics wrote, in The State Of The State Is, Well, You Know, “Typically he has done this speech to coincide with the evening news. This year he’s trying to hide it.”
    We at Speak Out California want to invite readers to come up with some solutions for the budget mess. We are working on some ideas for a prize for the best ideas.
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    The “Tax Freedom Day” Trick

    This post originally appeared at Speak Out California
    It takes a 2/3 vote to pass a budget in California. As we have seen this means any budget that does not completely meet the hard-core anti-tax, must-cut-government position of the Republicans in the legislature is voted down. Even though there is enormous public support for government – schools, roads, firefighters, etc. – they will not compromise at all. They demand that we gut the government, lay off tens of thousands of workers, or nothing. So California races toward economic ruin.
    What do your taxes buy you? The average person benefits greatly from strong government. By gathering together into a community that is jointly managed (i.e. government) people can pool their resources and accomplish great things that cannot be accomplished by people who are on their own. Roads and bridges are examples of things that people cannot accomplish individually. Police, firefighters, public schools are other examples. Law and courts and a monetary system are still more. And then there are benefits like Social Security and the “safety net” of programs for people who lose jobs to food programs for those of us without enough to eat.
    The reason we have almost everything that we value as a society, our education and (until recently anyway) jobs, the internet, buildings that don’t easily burn down or blow away, drinkable water coming to our houses and sewage systems leaving them and (until fairly recently, anyway) a health care system that stops epidemics is our government. All of the businesses we see around us exist because of our government — a corporation cannot even exist without the government that establishes it and the legal system that maintains it.
    But there are some who would personally benefit more in the absence of government than in its presence. History has taught that there are some who would organize themselves to take what others have worked to build rather than do that work themselves. One need only look at the walls built around cities in the past to understand this. There have also been organized gangs and other criminal enterprises that take rather than build, and more recently we have seen that organized predatory enterprises also find ways to victimize and prey on people. Fraud, confidence and ponzi schemes, consumer scams and all manner of trickery prey on people who are left unprotected by their community. Government is what has always protected regular people from such predators.
    Government — the people banding together to guard and accomplish their interests — serves to protect people from those who would just take rather than work with the rest of us to build.
    So why did Ronald Reagan famously say “government is the problem” in his first inaugural address and he loudly and repeatedly attack the idea of taxes? The foundation and strength of government is the taxes it collect. Taxes are what provide government with its strength to do all of the good things described above. This is why anti-government ideologues reason that the way to cut government (and thereby bring in its alternative) is to cut taxes. They say that if they can just cut out the foundation of government, it will fall. Or, more famously, that they can “drown it in a bathtub.”
    One way that anti-government ideologues have worked to accomplish this is to turn people against their own government, tricking people into misunderstanding how taxes work and what government does for them. last week, in What Are Tax Brackets, I explained how one of these tricks works — that you only pay bracket rates taxes on income that falls in that bracket, not on all income earned up to that bracket.
    Another way they turn people against taxation and government is to misrepresent how much is collected and how it is used. Exaggerated statements like, “We pay half our income in taxes” are commonly heard, along with under-representation and misrepresentation of the benefits we receive from government.
    “Tax Freedom Day” is one example of this technique. Tax Freedom Day is a product of The Tax Foundation, which is funded by the very same collection of right-wing donors that fund the Heritage Foundation, Cato Institute and so many other components of the anti-government “conservative movement.”
    Tax Freedom Day is widely publicized by corporate media, and usually described as being when “the average American” has earned enough income to pay their taxes. Tax Freedom Day for 2008 is April 23. To calculate Tax Freedom Day the The Tax Foundation adds up all the taxes paid to the government from all sources, but it only includes certain forms of income. It doesn’t include capital gains income, for example, yet includes capital gains taxes on the tax side of the calculation. These misleading calculations of course result in a much higher tax amount than “the average America” really pays. So while they say that 30.8% of “our” income went to pay taxes in 2008, anyone reading this who looks at their own tax bill can see that their taxes are substantially lower than this figure.
    So the next time you hear about Tax Freedom Day, keep in mind who is making this claim, and why.
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    Why California Can’t Pass A Budget

    Dave Johnson, Speak Out California
    Sunday’s CBS show 60 Minutes featured our own Governor Schwarzenegger! One of the things said on the show was the following,

    “The governor proposed to close that budget deficit half with tax increases and half with budget cuts. Republicans and Democrats opposed him.”

    This is why California does not have a budget.
    I don’t mean that we do not have a budget because “Republicans and Democrats” oppose the Governor, won’t compromise, won’t “meet half way,” etc. or that “Democrats won’t agree to cut spending” as most of the public is told. I mean that we do not have a budget because the public is told that this is the reason. If the public understood the real reasons that we do not have a budget, representative government would work and the citizens would apply the necessary pressure to bring about the passage of a budget.
    It is simply a fact that the reason we do not have a budget is that a small number of extremists are blocking the passage of a budget and are doing so because they can. They have voted against every budget compromise offered. They have been able to get away with this because the public believes that both sides are refusing to compromise. The Democrats have agreed to cuts and have moved more than half way. The Republicans refuse to move at all.
    Our news outlets are not meeting their responsibility to keep the public informed. This failure is contributing to our state’s inability to govern itself.
    And by the way, we at Speak Out California wish you a Happy Holiday Season!
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    California Republicans Admit Taxes Needed – Still Refuse To Allow Them

    This post originally appeared at Speak Out California
    California Republicans finally, finally submitted what they claim is a plan to attack the budget deficits, detailing specifics of the cuts they are demanding. The plan they submitted only cuts the deficit in half, thereby admitting (but not admitting) the urgent need to raise taxes to cover the other half of the deficit.
    The Republican plan guts public schools, community colleges, Medi-Cal, transit, mental health and many other programs. And yet it still leaves half of the deficit in place. So it isn’t really a “plan” at all. It is just one more extremist demand that we gut public schools.
    A phrase like “guts schools and programs” becomes abstract when it is heard often enough. So what does this mean to the average Californian? What kind of education will children receive as we push to 40 or more students per classroom? Will they be safe if the district cannot afford crossing guards or buses? Will any of us be safe after police and firefighters are cut back? Do we go another decade without improving mass transit or even repairing roads and bridges? Will epidemics spread as health care is cut back? What about three-hour lines at the DMV? And what happens to people’s ability to train for jobs when community colleges are cut way back?
    The Republicans demand that we sacrifice the education of an entire generation of school-aged Californians, so that a few wealthy people and corporations can become even wealthier! Their benefactors are covered — with their kids are in $20,000-a-year private academies. But what will this do to the economic future of the rest of this generation, and to the future of California? They don’t care.
    This process as it has unfolded over so many years has shown us that California is ungovernable until we remove the current 2/3-requirement system that allows a small group of extremists to hold the state hostage.
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    California Republicans Demand Mass Layoffs

    This post originally appeared at Speak Out California
    How do California’s Republicans think California should solve the state’s budget crisis, which results from people being laid off and losing their houses? They are demanding nothing less than mass layoffs of state employees.
    Every single budget compromise that has been negotiated has been rejected by the Republicans. They say there is one, and only one, budget solution they will vote for: mass layoffs of state employees and contractors. They want the state’s teachers fired, construction employees fired, firefighters fired, DMV workers fired, medical workers fired and mass firings from the rest of the state’s departments. And when they are done with that they demand cutbacks in medical care for the elderly, disabled, blind, and everyone else.
    How are they getting away with this? Why aren’t these few members of the legislature being recalled by enraged citizens? Part of the problem is the way this is being presented to those citizens by the information sources. The issue is presented as “the Legislature” and “politicians” who “won’t compromise” as if “both sides” are at fault. They report on the people who are working hard to solve the state’s problems as if they are squabbling children and the public takes away the idea that government is a distant unsavory game that should be avoided. Take this Merced Sun-Star headline, for instance: “Our View: Governor, Democrats and Republicans need to compromise.” The editorial begins,

    “As California’s financial troubles intensify daily, leading Democrats continue to blame Gov. Arnold Schwarzenegger for failing to win Republican votes for a budget solution.
    . . . Democrats will have to offer concessions if they want their counterparts to compromise on tax hikes. So far, Democrats have failed to make even the most reasonable of concessions to save California from insolvency.”

    The editorial just misinforms the public about what is going on! Repeatedly the Democrats have compromised, giving up more and more, but the Republicans have refused to compromise in any way. They just say, “No taxes” and that is that. THIRTEEN paragraphs down, the second to last paragraph, begins,

    “To be fair, Democrats in the last special session made some real concessions — agreeing to $8.1 billion in cuts to state programs — in their elusive search for a budget deal.”

    Oh, really, to “be fair” they mention this, in spite of the headline and the rest of the editorial, any members of the public who are still reading can learn that the Democrats have offered BILLIONS in cuts to state programs to try to get the Republicans to move even an inch away from demanding mass layoffs.
    California will remain ungovernable and will slip further into economic distress as long as a small minority is able to block budgets, and as long as the public’s sources of information continue to mislead.
    Click through to Speak Out California