California State Budget Crisis Not Caused by the Recession

California State Budget Crisis Not Caused by the Recession



The budget crisis in California was artificially created by cutting taxes on the wealthiest people and corporations. The current “crisis” is a shock and awe process designed to undermine wages and unions in the state and force labor concessions to protect corporate profits.

According to the California Budget Project, tax cuts enacted in California since 1993 cost the state $11.3 billion dollars annually. Had the state continued taxing corporations and the wealthy at rates equal to those fifteen years ago we would not have a budget crisis today.

Half of all state revenue comes from personal income taxes paid by working people, and another third comes from sales and use taxes. The result is that as a percent of income, taxes hit the lower paid workers the hardest. Corporations only pay for about 1/10th of the state budget. The rest of us are bailing out the rich by accepting massive budget cuts at a time when less spending will only exacerbate the economic situation.

Unions and working people need to say no to massive state budget cuts, and fight for every service and job possible.


Peter Phillips
Professor of Sociology
Sonoma State University.