May Gray in San Diego and Big Budget Blues in California: Will We Rise to the Challenge?
An avalanche of fiscal pain is about to roll down from Washington. Who will pay to price?
In the wake of a failed sales tax measure in San Diego last November, the inevitable deficits and scarcity that that loss has created has led to cuts and acrimony, with Mayor Todd Gloria taking the budget axe to parks, libraries, and other neighborhood services while sparing police spending. Progressives on the City Council have sharply criticized the mayor’s priorities as Axios reported last week, “Council Member Sean Elo-Rivera, said in a statement Wednesday, that Gloria is proposing ‘irresponsible and cruel’ budget cuts that harm vulnerable residents rather than requiring ‘wealthy corporations and tourists’ to pay their share.” Community uproar over cuts and the council’s pushback may be setting up a showdown between the mayor and the council, who can adjust the budget and override a veto with a supermajority.
Of course, the city’s structural budget deficit could have been prevented years ago had it not been for San Diego’s free lunch history that led it to treat its pension fund as a piggy bank rather than raise sales taxes a small amount so that its revenue base was comparable to other large cities in the state. But that level of fiscal sanity was nowhere to be found in our fair city, either in the halcyon days of GOP reign or today under the present regime. Until that reality changes, there will be more pain in the forecast. May gray will likely head into June gloom.
And the more working-class neighborhoods that voted in favor of the recent city sales tax measures will bear a larger brunt of the pain than the more affluent ones who largely opposed the tax measure and rail against new ones. So it goes in the place where happy happens. Let’s hope the City Council prevails here and pushes for the kind of revenue moves that Elo-Rivera is suggesting.
Looking into the distant horizon, there is more suffering in the forecast with the state of California announcing an additional $12-billion budget deficit on top of the existing one. And this is yet to account for the potential billions more in cuts to come if Trump and the GOP have their way and pass on huge new obligations to the states while gutting revenue with their insane tariffs. And as folks lose aid and access to health care from the federal government, the social, economic, and political costs will all roll downhill to the states, with California in particular peril.
One thing is very clear, the agenda of the national GOP, whichever faction wins their current internal battle over the budget bill, means millions of Californians ill. As the California Budget and Policy Center points out, our state was far from a paradise for working people before the current crisis, so the coming cuts will be rubbing salt in old wounds:
Although California is now the fourth largest economy in the world, millions of Californians aren’t sharing in our state’s prosperity. More than 7 million state residents lack the resources to meet basic needs, over half of renters have unaffordable housing costs, and more than 1 in 5 households experience food hardship. Black, Latinx, and other Californians of color disproportionately face these challenges due to centuries of structural racism and long-standing inequities in opportunity that have been structured into budget policies, past and present.
Compounding these challenges, policies being pursued by the Trump Administration and Republicans in Congress will further drive-up costs, making it even harder for families and individuals to make ends meet. For example, the Trump Administration’s sweeping tariff policy will add to the economic challenges facing people with lower incomes because tariffs are essentially regressive taxes. Plus, economists have warned that the drastic and chaotic nature of these tariffs could plunge the economy into a recession, exacerbating the economic challenges facing families, workers, and businesses. On top of this, the budget package currently advancing through Congress would slash federal funding for health care, food assistance, and other vital services, jeopardizing the health and well-being of millions of Californians. This includes:
· Massive cuts to funding for Medi-Cal and efforts to repeal or undermine the Affordable Care Act that would cause Californians to lose health coverage, have fewer benefits, face higher health care costs, and experience more difficulty getting care;
· The largest cut to SNAP food assistance (CalFresh in California) in history that would put low-income families and individuals at greater risk of hunger by taking away some or all of their food benefits; and
· Terminating many immigrants’ access to vital programs, including denying Medicare to lawful permanent residents who have worked and paid taxes to support the program, denying SNAP to refugees, asylees, and other humanitarian immigrants, and denying the Child Tax Credit to US citizen children in mixed status families.
In sum, from the state to the local level, California is facing a grave threat to the wellbeing of millions of its residents. The state budget is already a disaster, leaving us even more vulnerable to the relentless attacks coming our way from Trump and company. It brings to mind the bluntly honest statement of intent from the Trump administration that their aim is to “inflict trauma.”
As the CBPC notes:
Access to affordable health care, housing, and nutritious food is necessary for all Californians to thrive. But Republican federal budget proposals would pave the way for deep and harmful cuts that would take health coverage, nutrition assistance, and other essentials away from millions of Californians who are already struggling to make ends meet in the face of persistently high inflation and the high cost of living. These cuts would increase poverty and hardship, widen race and ethnic inequities, and make it harder for workers to maintain their jobs in exchange for funding huge tax giveaways for the wealthy.
In addition to cuts to federal funding for programs and aid, trade policy will also have brutal impacts on the state budget and, consequently, hurt millions of Californians. As Cal Matters reports, “the most significant risk to tax receipts is undoubtedly from Trump’s tariffs. California estimates that revenues would be $16 billion higher next year if not for the president’s sweeping import duties, which Newsom sued last month to block.”
But rather than taking a principled and courageous stand, Governor Newsom has pivoted right as he positions himself to be the anti-woke Democrat running for President in 2028, punching down rather than up by aiming at programs that serve the poor rather than eye any way to increase revenue. As the Los Angeles Times reported, not everyone in the Democratic coalition is jazzed about the Governor’s shameless triangulation:
“While California leads the fight against Trump’s extremist attacks on our neighbors, our co-workers and our families, we must stand strong behind our values here at home,” said David Huerta, president of SEIU California, in a statement. “Instead, the governor’s proposed budget reads more like a CEO wishlist — sticking it to the working poor to protect tax breaks for the rich, and continuing to hollow out good, middle-class jobs.”
This, of course, is the central point. How can we even begin to fight the emboldened billionaire class in our country if the leader of the left coast is afraid that if he asks the superrich to help solve the state’s budget crisis so the burden doesn’t exclusively fall on the most vulnerable, he may not get to be the next President?
Hence, the fundamental cowardice of the proposed budget. As the CBPC observes, “The governor’s revised budget also fails to propose any major tax policy changes to increase state revenues to address the shortfall, avoid cuts, and buffer against emerging federal threats, even while federal leaders are preparing to give away more than $4 trillion in tax cuts to high-income households and corporations.”
The bottom line is simple: you can’t fight oligarchy if you are afraid to even raise a glove against it.
Where does this leave us? In California we can either surrender to the logic of scarcity and pit neighbor against neighbor as the ship sinks or we can look to where the resources really are and ask whether we have the courage to actually address the gaping inequality of wealth and resources that threaten not just to close our local library but destroy our nation’s democracy. If we rise to the challenge, perhaps we can provide a worthy model for the rest of the country rather than a pathetic set of talking points for our ambitious governor.
