“Data released by the IRS in January [2009] showed the average tax rate paid by the richest 400 Americans fell by a quarter, to 17.2%, and their average income doubled to $263.3 million through the first 6 years of the Bush Administration.” (Business Week 12/10/09)
While the coffers of the biggest banks may be healthy enough to repay their billion-dollar bailouts, city and state treasuries are empty, despite the stimulus package. Detroit faces a $300 million budget gap for fiscal year 2010 (20% of its general fund budget), New York $6.6 billion, and Los Angeles over $528 million (www.pewtrusts.org/philaresearch).
The states are in no position to step in. The magnitude of California’s crisis may set it apart, but it is by no means alone. According to the National Association of State Budget Officers, “states will have faced $256 billion in budget gaps between fiscal year 2009 and fiscal year 2011” (Fiscal Survey of States, December 2009).
The recession has hit both sides of the balance sheet hard. Revenues from income and payroll taxes, sales taxes, and real estate transfer taxes fall as unemployment and foreclosures rise. Expenses skyrocket with the intensified demand for services caused by the economic downturn.
Big business’ 30-year campaign for “smaller government,” championed by Republicans and Democrats alike, has successfully limited the ability of state and local governments to take on debt and/or raise taxes. To meet their huge budget shortfalls, they slash expenditures by cutting services and workers, through furloughs (unpaid days off) and layoffs.
The corporate recessionary spiral strikes twice in the public sector. Laid-off workers stop contributing taxes and also begin to require more services - from online job search hours at the local library and community college classes, to public utility assistance and food stamps.
Working-class people need the jobs and services our cities and states provide. While cities don’t eliminate corporate tax incentives, they close libraries and fire stations and lay off case workers, day care providers and teachers. Our safety, our health, and our children’s futures are compromised by each paramedic, lab technician, teacher’s aide, or bus driver lost.
Public sector unions can play a leading role in the fight back against service cuts, but they must also decisively reject tax increases on the working class as the only alternative to cuts and layoffs. The California Faculty Association, which represents instructors in the California State University system, has united with student groups to organize informational picketing, marches, and rallies to build support for a national day of action on March 4. They call on Governor Schwarzenegger to fully fund higher education.
We need a coalition of unions, youth organizations, and community groups to resist cuts. Public sector unions should reach out to the people they serve, educating the public with working-class arguments to defend and expand services. Mass mobilizations could force states, cities, and the federal government to fully fund the services we need by taxing the rich and ending the wars.
