The leading candidates in the California recall election have
repeatedly vowed to protect educational funding and access, but
they have a shortage of viable options to deal with the
state’s budget problem.
California is projecting a budget deficit trend of $8 billion
per year, and economists agree that cutting expenditures and
raising taxes are the only real options.
However, many of the candidates looking to replace Gov. Gray
Davis insist that they can preserve funding for education, repeal
student fee hikes, and simultaneously solve California’s
budget problems.
Many of the leading candidates in the recall ““ including
Democratic Lt. Gov. Cruz Bustamante, Green Party candidate Peter
Camejo and Independent Arianna Huffington ““ have said that
they would work to repeal fee hikes if elected.
There is concern in the higher education community that
increased fees could decrease access to colleges and universities,
but economists argue that retracting fee hikes could be severely
detrimental to the quality of higher education.
“Rolling back fees sounds good, but if a university
can’t raise fees, the quality of education could
decrease,” said Mark Peterson, chairman of the UCLA policy
studies department.
Peterson said if public colleges and universities do not have
the ability to raise revenue by raising fees, faculty could face
cuts, and technology and library resources could deteriorate. In
addition, wealthy private universities could entice prestigious
faculty to move there if public universities cannot support
them.
Community colleges would be hardest hit if fees were repealed,
because unlike the University of California and the California
State University systems, they don’t have external sources of
funding like research grants and private donors.
California’s budget is extremely important to the UC
because a large portion of its budget comes from the state. The two
are inexorably tied ““ the UC faced $410 million in cuts as a
direct result of California’s $38 billion deficit last
year.
Bustamante, Camejo and Huffington have all proposed raising $1.3
billion by closing loopholes they say corporations use to avoid
taxes. Economists doubt it will be enough.
“Most of the money from closing corporate loopholes would
go to local governments, which would indirectly decrease pressure
on the state government, but won’t get you anywhere close to
$8 billion,” said Daniel Mitchell, a joint professor at The
Anderson School at UCLA and the School of Public Policy and Social
Research.
“The bulk of revenue for the state comes from sales tax,
income tax and corporate profits ““ you have to raise money
from there,” Mitchell added.
Bustamante’s plan would spend $2.43 billion on education
and roll back community college fee increases. In order to support
this funding and reduce the budget deficit, Bustamante proposes
raising taxes on alcohol by $0.25 per gallon, cigarettes by $1.50
per pack, and increasing taxes on the top 4 percent of
Californians. He says he would also crack down on Medi-Cal
fraud.
“We would raise a total of $8 billion,” said Ardie
Zahedani, a member of Bustamante’s campaign policy staff.
But Mitchell said taxes of this magnitude would do little to
relieve a budget crisis that would leave California saddled with a
structural deficit of $8 billion per year.
Other candidates proposals for the budget crisis include
Huffington’s plan to stop the Delano II prison project;
McClintock’s plan to cut the vehicle licensing fee, workers
compensation, and government committees and programs he deems
wasteful; and Camejo’s plan to institute a “fair
tax” by which the wealthy would pay the same percentage of
their income in taxes as the poor ““ about 11.3 percent.
Arnold Schwarzenegger has said he can balance the state budget
without cutting education, but has not yet given a concrete
plan.
Mitchell sees Camejo’s plan to radically restructure taxes
as the only viable one. But he said even if Camejo wins, his budget
plan would be “dead in the water” because two-thirds of
the Legislature would need to approve it, adding that the
Legislature probably wouldn’t do so.
It is unlikely that any of the other plans would raise enough
money to solve California’s budget woes. Stopping the
construction of the Delano prison as Huffington suggests, for
example, could save a substantial portion of the project’s
$600 million price tag, which Huffington would use in order to
support rolling back fee hikes. But it would not provide enough
money to make a dent in the increasing budget deficit.
Similarly, McClintock’s plan would make cuts and decrease
spending, but it probably would not raise enough revenue to bail
California out of its current crisis.
Ultimately, all of the candidates’ plans are focused on
the next fiscal year, when it is not even clear that California
will be able to make it through the current one intact. In
addition, much of the money the candidates plan to raise would be
spent on education, leaving little money to pay down the deficit,
and possibly necessitating cuts in the future to keep California
fiscally solvent.
But several obstacles impede the road to solvency.
California’s credit rating is suffering, and the uncertain
political climate of the recall election is making it difficult for
the state treasurer to sell the bonds necessary to keep the state
afloat.
“The recall itself has made dealing with the budget crisis
more difficult, not less difficult,” Mitchell said. “It
has made it more likely that California will have a budget crisis
this year.”