Let’s blame it on Google. If the search engine monolith weren’t so dizzyingly successful, its stock wouldn’t have been worth billions of dollars to the 16 company founders and insiders in 2006 who decided to partially cash out. That stock sale did more than make those guys richer. It also unleashed an unanticipated monsoon of tax revenue into California’s coffers, submerging Sacramento’s negotiations over the 2006-07 budget under a comfortable sea of cash.
The housing boom was in full swing as well, so lawmakers were enticed to spend by that political amphetamine known as extra money. There were several billion unexpected dollars to play with. To hear some Republicans explain it, they wanted to prudently lock up that money in reserve as a hedge against years like, well, this one, in which California is $16 billion in the red. But those Democrats. Like that old TV game show Supermarket Sweep, where you try to load your shopping cart with the most expensive groceries before time runs out, they went on a wild bacchanal of spending.
Lawmakers, after all, and Democrats especially, have a reputation for enlarging the government with entitlements and new programs. Leading the charge in 2006 were Assembly Speaker Fabian Nuñez (D-Los Angeles), who will soon give up the speakership, and on some programs, Karen Bass (D-Los Angeles), who will soon take his place.
But let’s look at some of that supposedly rampant and reckless spending. Bass insisted that much of that revenue windfall be used for foster-care programs to help the 70,000 or so California children who had to be removed from their homes to protect them from dangerous neglect or abuse. Dollar for dollar, it was a better use of the money than socking it away in reserve -- even though the state couldn’t afford to sustain the spending, and even though it all might get cut this year.
Under a package of bills carried by Bass, some of them cosponsored by Republican Assemblyman Bill Maze (Visalia), the Legislature raised the foster-care budget by $82 million in new funds beyond what Gov. Arnold Schwarzenegger proposed.
Why foster care? Ideally, children would never become the wards of courts and governments, which are at best poor substitutes for real families. But this is not an ideal world. Children are in fact abused and neglected, and as much as it costs the state and counties to intervene, it costs more to leave them alone. Dysfunctional families impose huge societal costs, and the decision facing lawmakers and policy wonks is whether to spend that money early on, when the expenses are smaller and the damage to young lives is still correctable, or later on.
Those later costs come in the form of all those ills that result from children missing out on a good start life: Jail. Drug abuse. Homelessness. Already, a shocking number of children move swiftly from the oversight of dependency courts to the jurisdiction of delinquency courts. Bass estimates that 50% of current prison inmates had some kind of contact with the child-welfare system.
It’s the same story with much of the rest of the spending. Pay less now and keep kids in group homes? Fine. Spend far more later on criminal justice or mental health -- not to mention lose a taxpaying member of society.
But those savings will be realized sometime in the future. Still, the budget is in desperate need of cuts today. But consider this: Much of the state spending on social services is matched by federal or even county dollars. The 10% across-the-board cuts proposed by Schwarzenegger would indeed save the state 10% -- but remove about 15% in social services.
If the Democrats had put last year’s unexpected revenue in reserve, today’s budget problem might be smaller, but not by much. The matching funds would be lost, California’s long-term social costs would be higher and, in case anyone cares, the state would be failing to do its best to care for the children most in need of help.
That knowledge puts Maze in a tough spot. He is loath to cut the programs helped put in place, but his party is looking for cuts. “I have to explain what the nuances are,” he said. “They’re very sympathetic.”
For Bass, across-the-board cuts are off the table. “I believe the Republicans are open to looking program-by-program” when identifying cuts, she said. But she also doesn’t want to be in this position again and she said she is looking for an alternative, perhaps a ballot measure that would zero in on an identified funding stream. In other words, new taxes.
That’s the choice: prudent, perhaps even forced, reserves; costly program cuts; or new taxes. And foster care, of course, is just a speck of the budget compared with programs such as healthcare and education. But the same analysis applies: Fail to cut or fail to save today, and you leave a larger problem for next year and the year after. Cut or save today and -- well, you leave a larger problem for next year and the year after.
Robert Greene is a Times editorial writer.