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MARIN COUNTY'S NEWS MONTHLY - FREE PRESS
(415)868-1600 - (415)868-0502(fax) - P.O. Box 31, Bolinas, CA, 94924

July, 2009


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Governor's Budget Proposals Mirror Third World Structural Adjustment Policies

California Governor Arnold Schwarzenegger's proposal to bridge the state's $24 billion budget deficit by shredding the state's social safety net through far ranging cuts to such areas as education, health care, social services, and public transportation is both disingenuous and fiscally irresponsible, especially since polls show that a majority of California voters oppose these cuts.
Worse, Schwarzenegger's proposals will actually cost the state more than $24 billion down the road by exacerbating poverty, creating mass unemployment, breeding ignorance and illiteracy, and producing a public health crisis throughout the state.

This can be extrapolated from a 2006 study published by the American Journal of Public Health.

The study found that when New York City submitted to a set of austerity measures and social spending cuts similar to what Schwarzenegger has proposed in order to balance its budget and avoid bankruptcy in 1975, the resultant crime wave and public health crisis that ensued cost New York roughly five times more ($50 billion in 2004 dollars) in medical costs than the budgetary savings ($10 billion) associated with decimating the city's public health, education, and social service programs.

If it cost New York $50 billion in medical expenses alone in 1975, it is easy to imagine what would happen in California today. The Golden State's current budget deficit of $24 billion is nothing compared to what it would take to deal with the masses of unemployed, uneducated, sick, and homeless individuals the state will have on its hands, if the legislature goes along with Schwarzenegger's proposed cuts.

Moreover, many of Schwarzenegger's cost-cutting ideas would actually do away with efficiently run, low-cost state programs in favor of high-priced, private sector solutions.

For example, Schwarzenegger has proposed to virtually eliminate the In-Home Supportive Services (IHSS) program by changing eligibility requirements for people who receive IHSS, which provides care to seniors and the disabled in their own houses instead of state-subsidized nursing homes.

However, it costs between $60,000 to $80,000 dollars to care for individuals in a nursing home versus $10,000 per person through the IHSS program.

Similarly, the California Department of Mental Health has been using private contractors to staff institutions like the Atascadero State Hospital instead of civil servants, even though private contractors typically earn $78-$95 an hour more than their civil servant counterparts.

Schwarzenegger is right when he says that, "They [his proposals] represent a transformation of what services Sacramento can provide and how those services are delivered."

The transformation that Schwarzenegger is calling for relies on the same Third World-style fiscal austerity/structural adjustment policies that have succeeded in enriching a small class of wealthy elites in developing countries while simultaneously entrenching poverty and creating squalid living conditions for the vast majority of citizens throughout the Third World.

These observations call into question the governor's true intentions as well as those who resist calls for beefing up the state's revenues. Is it really about being fiscally responsible? Or is it about eliminating the state's ability to create a more equitable society through public policy in order to enrich a select few through tax breaks, tax credits, and subsidies that favor the wealthy and politically connected?

If the governor is really serious about fiscal responsibility and getting California's economic house in order, he should abandon his blunt instrument approach and embrace the budget proposal advanced by the American Federation of State County & Municipal Employees (AFSCME) which found $44 billion in recurring revenues to balance this year's budget and all others thereafter.

AFSCME's approach would fundamentally orient the direction of the Golden State toward a future where all Californians will be served by the greater public good.

Willie L. Pelote, Sr. is an Assistant Director of the American Federation of State, County and Municipal Employees (AFSCME), AFL-CIO. AFSCME's 1.6 million members provide the vital services that make America happen. With members in hundreds of different occupations - from nurses to corrections officers, childcare providers to sanitation workers - AFSCME advocates for fairness in the workplace, excellence in public services and prosperity and opportunity for all working families. He can be contacted using the following information:


AFSCME
1121 L Street #904
Sacramento, CA 95814
(916) 441-1570
[email protected]
www.calafscme.org



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