cara convention10/12/08page no. 1 “i see one-third of a nation ill-housed, ill- clad,...

CARA Convention 10/12/08 Page No. 1

“I see one-third of a nation ill-housed, ill-clad, ill-nourished…

The test of our progress is not whether we

add more to the abundance of those who have much; it is whether we provide enough for those who have too little.”

Franklin Roosevelt's second inaugural speech, from January 20, 1937

CARA, October 12, 2008

Lenny GoldbergExecutive DirectorCalifornia Tax Reform Association

Susie SmithDirector, Californians for Economic Security Insight Center for Community Economic Development (www.insightcced.org); [email protected]; (510) 251-2600 x108

The budget disaster: Why it happened and Where to go from here


Presentation Overview

• The good, the bad and the ugly:08-09 Budget Cuts (Susie)

• Structural Budget Problems (Lenny)• What to do about it? (Lenny)• Introducing a new tool to fight the cuts:

the Elder Economic Security Standard & Coalition (Susie)

• Discussion – Q&A


08-09 Budget Woes: “War on Seniors!”

• MAJOR cuts to safety net programs• Many cuts will result in loss of federal match

dollars• Permanent TAX CUT = $965 million in lost

revenue, starting 2011• Permanent suspension of state SSI COLA in

2008 and 2009- 68% of SSI recipients are disabled, 2% blink and 29%

aged



• Health-related issues:- Keeps 10% cut to Medi-Cal provider rates, until 3/1/09

(temporarily crt restraining order to implement)- Requires paperwork 2x/yr for children in Medi-Cal- Increases Healthy Families Program premium contributions

for some families by $2-$3 per child/month- APS, line-item veto cut of $11.4 million Allows caps as low as

$1,500 per child per yr for dental coverage provided to kids in Healthy Families Program

- Reduces rates to health, dental, and vision plans that provide coverage thr the Healthy Families Program by 5%



• Eliminates $11.7 million for the California Discount Prescription Drug Program

• $13.2 million reduction to CDA programs- Senior Community Employment Program - Multipurpose Senior Services Program- Alzheimer’s Day Care Resource Centers- Home Delivered Meals Programs- Senior Legal Hotline


08-09 Budget Woes, cont’d

• CalWORKS - Suspended COLA for CalWORKS grants for

low-income families, 4th year in a row!- $70 million line-item veto cut to funding that

counties use to provide child care and help parents find work

Other major cuts in Child Care & Development, K-12 Education, Higher Ed & Transportation!


How did we get here?Revenue background

• Long-term structural deficit: $6 billion from “car tax” cut

• Plus: $3 billion in paying off previous bonds (how we got through the last time)

• Plus: other transfers of funds from GF (Prop 42, 1A)

• Plus: good fortune for Schwarzenegger: abusive tax shelters and tax amnesty

• Plus: slowdown in growth = $15 billion


Budget agreement

• Cuts of $10 billion, including $3.3 in education from expected growth

• Vetoes: Senior rental and homeowner assistance

• Revenue accelerations, and future large corporate tax cuts: “carry backs” and credit manipulation

• “Securitizing” the lottery• Future budget restrictions


Political environment

• Why so different from 1991 re 2/3 vote:- Few mod. Republicans (Wilson, Maddy,etc)- Term limits- Safe seats- Gingrich/Norquist takeover of Republican party:

“no new taxes” as article of faith- The pledge- A perfect storm? Vs. Majority voteT4CF Organizing effort: Revenue and Republicans


What’s next?

• Lottery and budget restrictions on special election ballot, likely June 2009

• Revenues also?• Budget re-opened now, revenues and

cuts? Already $3-5 billion in deficit• Planning the turnaround, for the June

2010 ballot


Where do we go from here?

• Revenues: repeal permanent loopholes, add new revenues on the June 2010 ballot

• Short term revenue options: top brackets, loophole closing, oil, services

• Change 2/3 vote for taxes: “Taxpayer Right to Vote” as solution?

• Longer term (November 2012): reassess commercial property for cities, counties and schools = $5 billion

• [Option : Constitutional Convention]


What will it take to get there?

• Unity: labor, seniors, education, health care, public safety, etc

• The fiscal recovery/turnaround of California has to become a widely-shared priority

• Can we get there?


Elder Economic Security Standard: A New tool can help reframe the budget battle!!

The Elder Economic Security Initiative is..

• National, statewide, and local data-driven coalitions to help families and seniors make ends meet

• Part of a national movement, with grass-roots component

• Guided by state and regional steering committees


• County-specific cost-of-living index for retired people 65 and older

• Min. Income needed for housing, food, health care, transportation, other basic needs

• Individual and Couple

• 3 Housing Types

• Based on public data sources

CA Elder Economic Security Standard Index: New Tool for Round 2 of the Budget Battles


Elder Standard ExamplesSan Francisco and Humboldt Counties

Monthly Expenses

San Francisco County Humboldt County

Owner w/o Mortgage

Renter, One

BedroomOwner w/o Mortgage

Renter, One

Bedroom

Housing $418 $1,239 $368 $551

Food $308 $308 $231 $231

Transportation $202 $202 $202 $202

Health Care = Good $293 $293 $378 $378

Miscellaneous @ 20% $244 $244 $236 $236

Elder Standard Index Per Month

$1,465 $2,286 $1,415 $1,598

Elder Standard IndexPer Year

$17,580 $27,432 $16,985 $19,176


San Francisco County (2008)One Adult with One Preschooler and One School-age Child

$57,658

$19,469$10,392

$17,600

$19,469

$-

$57,658

Federal PovertyLevel

Average CalWORKswith Food Stamps

Benefit

Full-Time MinimumWage Job

San FranciscoCounty Self-

Sufficiency Standard

100% of the

Federal Poverty Level

40 hour per week

job at $27.30/hr*

$38,938Two full-time

minimum wage jobs$9.36/hr

* Note: The Self-Sufficiency Standard includes the net effect of the addition of the Child Care and Child Tax Credits and the subtraction of taxes.


How the Standards Are Used

As a budget & advocacy tool for advocates and policymakers• Make case to protect against cuts (e.g. LAO’s

office)• Elder Standard demonstrates we need MORE,

not less• Media briefings• Assembly Member Beall’s food hearing• Create responsible and effective public policy• SF, LA & statewide resolutions to modernize FPL• CARA Resolution – thank you!!


But why not use the FPL to fight the budget cuts?

• Developed in 1963-64, by Mollie Orshansky of the Social Security Administration- 1955 Food Survey = 1/3 of after tax income on

food- USDA thrifty food plan (designed for temporary

or emergency use) x 3 = poverty

• Varied by family size, but not age• Same amount in every state


Why not use the FPL to fight the budget cuts, cont’d?

• Based on 1950’s consumption patterns

• Incorporates outdated and inadequate food measure

• Measure of deprivation, not stability• The inflation adjustment (CPI)


Building the Movement for Change

• Expand Coalitions• Advance national momentum

- Bloomberg’s recalculation of NYC poverty- Congressional hearings- Obama endorsement- Villaraigosa interest- CA Joint Resolution

• Unite family and elder economic security coalitions

• Expand research (e.g. demographic, LTC)

• Join the movement! Listserv, advisory committees


For more information on CFES, contact:Susie Smith or Jenny Chung Californians for Economic Security (CFES)Insight Center for Community Economic Development Oakland, [email protected] or [email protected] (510) 251-

2600

To find the Family and Elder Standards for your county, go to:1) Elder Standard:

http://www.insightcced.org/index.php?page=elder-standard-county

2) Family Standard: http://www.insightcced.org/index.php?page=ca-sss

Contact Information

cara convention10/12/08page no. 1 “i see one-third of a nation ill-housed, ill- clad,...

Documents

budget woes

budget agreementcuts

budget disaster

lotteryfuture budget

tax amnestyplus

workother major cuts

lowincome families

abusive tax shelters