Yee Briefs Sunset Demos on Budget

By Jonathan Farrell

Even though California State Sen. Leland Yee arrived late, he was well-received by those who gathered to hear him speak at the Taraval Police Station on June 24.

He was there for a Town Hall Meeting sponsored by the Sunset Democratic Club and the Sunset Heights Association of Responsible People (SHARP). Yee told the audience of about 30 people that he was late because he was working on the state budget.

Also on hand was Bob Twomey, Assemblywoman Fiona Ma's chief of staff.

The news from the capital was not pleasant. The fiscal crisis has stressed relations between Democrats and Republicans in the Legislature.

"We are in an extraordinary time of a serious economic down turn," Yee said.

Even though California is traditionally among the strongest state economies in the nation, Yee said, as of now the Golden State has a serious cash flow problem.

"People don't realize what a serious problem the sub-prime loan rate debacle caused," he said.

Yee said the economy actually began showing danger signs in 2007. The measures that were placed on the ballot for Californians to vote upon were in hopes of raising some revenue through various taxes to make up for budget shortfalls. Yee said that since the measures did not pass, the struggle to allocate funds began to intensify.

The state might have to start handing out IOUs, instead of payments, to meet its obligations, he said.

Yee also noted that the current budget has dramatically changed the way in which the state conducts day-to-day business. The state has about a $24 billion shortfall, mostly due to increased labor costs, federal cutbacks and lower tax and fee revenues.

The Democrats forwarded a budget to Gov. Arnold Schwarzenegger that called for $11 billion in cuts and $9 billion in new taxes, but the governor has said he would veto it.

The Republicans have been adamant about holding to their "no tax" pledge in the Legislature, saying the state has a spending problem, not a revenue problem. With the boom-time economy of the last decade, California's revenue jumped billions of dollars to a height of near $100 billion a year a couple of years ago. The Legislature spent that money as fast as it was coming in, expanding the state's edicts and hiring more state employees, of which there are now more than 200,000.

As the state's economy continues to deteriorate, many low- and middle-income Californians are finding it increasingly difficult to make ends meet. Consequently, more Californians are turning to income support and related programs, such as Healthy Families, Medi-Cal and CalWORKs for assistance.

"Over the past nine months, we have cut over $25 billion in vital services and programs that Californians depend on. These cuts are having a devastating impact, not only on the people who utilize these services, but on California's overall economic recovery," Yee said.