Proposition 2: A bad idea for California

California Governor Jerry Brown’s Prop 2, nicknamed the “Rainy Day Fund,” is a theft of our tax money. As a proposed amendment to the state’s constitution on the November 4th ballot, it would make this theft permanent. Prop 2 sets aside a percentage of the surplus billions in unexpected 2013-14 tax revenues, without restoring the $15 billion in brutal, devastating budget cuts beginning in 2008 and ’09, thus contributing to the highest poverty rate in the country.

Under Prop 2, our own hard-earned surplus will be used as a buffer against the costs of future Wall Street gambling, and not against the austerity conditions affecting vulnerable families on Main Street.

In the last six years, California has slashed billions of dollars from vital programs, hitting women and children hardest of all. Poverty rates have spiraled upward, increasing seven times faster than the rest of the nation. One in four children live in poverty. Californians have lost education, job training, and childcare funding. Families have been pushed further down into the hopelessness of poverty and dependence. (See “Down the Up Escalator: How the 99  percent Live in the Great Recession,” by Barbara Garson.)

Women and families on CalWORKS are forced to exist on incomes 41 percent below the federal poverty level, which for a family of three is only $19,530 annually.

CalWORKS is California’s “welfare to work” program, which provides cash assistance and job-related services to low-income families, including over 1 million children. The cumulative impact of recessionary budget cuts to CalWORKS is nearly $4 billion, translated as $3,000 for each of these children. Monthly grants for a family of three are now at an impossible level of $638/month, and after years of not keeping up with inflation, are worth half as much as they were worth 20 years ago. This is the case, even with the 5 percent increase in March 2014 and the 5 percent increase that will go into effect in March 2015.

To make matters even worse, women and families in California are “allowed” to be poor for only 2 years in their total lives.

This gives new meaning to the word “temporary” in the current Temporary Assistance to Needy Families (TANF). When Aid to Families with Dependent Children (AFDC) was “reformed” (i.e., killed) by Pres. Clinton and Congress in 1996, its replacement, TANF, put a 5-year lifetime limit on receipt of government assistance. In July 2011, California first reduced this time limit to 4 years, and then in 2013 to only two years.

We don’t need to change the rules by amending our state constitution.

Current rules governing reserve funding allow the governor to waive them annually, to buffer the people against otherwise damaging austerity cuts. But under Prop 2, the governor must first declare a state of fiscal emergency before releasing even a half of the reserves. The other half will be sequestered for 15 years to repay long-term debt to banks! As Chris Hoene, Executive Director of the California Budget Project has said, “If voters tried to drill into the details of this, its likelihood of passing would be much lower because it’s too complicated to understand.”

Jerry Brown claims Prop 2 will make California fiscally responsible. But there are other, better choices. Ellen Brown, of the Public Banking Institute, has argued for establishing a state-owned bank that can substitute for a rainy day fund. In the wake of the Progressive movement of the early 20th century, North Dakota established a stand-alone state bank in 1919, untethered to Wall Street, and was able to fully escape the devastating credit crisis of 2008. But although both houses of the California state legislature voted for a state bank feasibility study in 2011, Jerry Brown vetoed this idea. By dismissing such a successful alternative, Gov. Brown has been fiscally irresponsible.

Of the five statewide propositions on the California ballot this November, the Courage Campaign, a progressive voter bloc, has singled out Prop 2 as the only one on which it recommends a No vote, for many of the same reasons outlined above. The Courage Campaign polled such organizations as ACCE Action, ACLU, various unions and environmental organizations, some of which take no position on Prop 2; but all of those that do, recommend a No on 2. The California Council of Churches has also opposed it. Progressive public opinion has spoken.

Cathy Deppe is co-chair of the Los Angeles chapter of 9to5, the national association of working women. She has previously written for the PW on low minimum wages.

Photo: Courage Campaign, Facebook.



Cathy Deppe
Cathy Deppe

Cathy Deppe is an activist writing from Los Angeles.