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Balancing the budget topples hopes

by Hawa Arsala, published on July 1, 2009 at 12:16 PM

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On Tuesday evening, hundreds of workers with the Service Employees International Union (SEIU) congregated at the steps of the Capitol to voice their frustrations with how the state legislature is handling the budget.

Yvonne Walker, President of the SEIU, opened the rally with a fiery speech about how state workers “are on the tipping point,” with the continued proposals to cut state workers’ pay and adding a third furlough day.

Walker described the two-day furlough already in place for state workers as “the equivalent of one month’s pay.” She explained an additional day of unpaid leave would increase the financial burden on state workers, causing some to lose their homes.

Workers were well aware of this possibility as they walked circles around the Capitol lawn, some waving signs that read, “The future face of poverty.”

The impacts of pay-cuts have had severe effects on the lives of the workers.

“I have two children and I cannot afford a fifteen percent pay cut as a single mother,” said Kendra White, a tax technician. She added, “I already can’t pay my bills,” though the further proposed cuts have yet to be implemented.

Richard Wilcox Jr. is an employment program representative who processes employment insurance claims forms. He attended the protest in solidarity for his fellow workers.

“Some of them are at a point where they are actually filing for unemployment insurance claims forms,” seeking the exact help they provide as a part of their job, he said.

Some of the rally attendees held up signs that referenced the safety and well-being of their children. “I’m having to make choices about my kids being in daycare, and in a potentially dangerous situation” said Angela Ramirez, a DMV employee.

“I had to actually check with child services to see if it was okay to leave her home for a few hours out of the day until the lunch hour when I could come home,” Ramirez said.

She touched on current situations at her office that reflect the effects of the budget cuts on the community as a whole. “We’re backlogged, and customers are disappointed that the services are taking a lot longer.”

These services include filing paperwork dealing with DUI offenders. “Getting drunk drivers off the road is getting longer. The paperwork is taking longer,” she remarked.

“We’re doing a disservice to the community, not only the workers but the state of California,” Ramirez said.

Members of the SEIU have pin-pointed many ways to re-direct pressure off of state workers. “We’ve identified $34.7 billion in private outsourced contracts,” Walker said, hoping that the amount of money pouring into private contracts is reduced.

“One idea which I have,” said Wilcox, “is basically we start taxing oil companies for the oil that they drill out of ca public land.” The same is currently done in Alaska where they “actually make enough money where every year the Alaska state government sends its citizens checks.”

While he does not think the possibility of drilling an equivalent amount of oil in California is possible to generate that income, “it could at least offset the hurt.”

The SEIU planned to have a candle-light vigil and spend the night on the Capitol lawn, but some of the coordinators called it off because it looked like the legislature was not going to be in session that evening.

The protest at the Capitol Tuesday evening was a precursor to today’s rally. The SEIU expects over 2,000 workers to convene at the Capitol around noon to rally against the projected cuts.

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July 1, 2009 | 12:21 PM
Are other groups or organizations participating in the rallies, or is it only the SEIU?
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July 1, 2009 | 1:25 PM
Good work, Hawa! You did a great job of using quotes to show how the budget is impacting people's daily lives.
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July 1, 2009 | 1:38 PM
Zachenglund: The SEIU is organizing the event, and I don't know of any other organizations participating, but I don't see why others wouldn't join their cause. Thanks for that question!

Kathleen: Thanks so much! That means a lot coming from the budget Queen!
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edited on  July 1, 2009 | 2:32 PM
The SEIU needs to take cuts like everyone else, if not; the ship of California will take even longer to hit the bottom. I don't feel sorry for these people anymore, they need to look around and see that private companies are making big cuts and working longer hours to stay afloat.

The voters back in May voted down tax increase 2 to 1, so cuts need to be made in balancing the State budget.
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edited on  July 1, 2009 | 5:10 PM
It is a simple problem that there is more money being spent than raised. I do not understand how as a taxpayers we experience cuts in income, but the people who work for us insist they should not get some cuts? How can they be immune?
When things are going well, we all prosper, when things are tough, we all take a hit. From what I understand government workers get to stay home on the days they do not get paid for. Out here in real world competitve business land, we work longer hours for less pay, and try to hold the company together.
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July 1, 2009 | 3:39 PM
When do state bondholders get to bear some pain from budget cuts? Oh, I know. State budget cuts are for low- and middle-income Californians only. They are better able to live with less to balance the state budget.
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July 1, 2009 | 4:23 PM
I have not heard proposals that would affect state bondholders. Do you have a link to any proposals?

How would this work?
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July 1, 2009 | 3:49 PM
Trapper: I really appreciate your sentiments on the issue. From what I gathered, it is true, private companies are making cuts as well! But I think Seth makes a point--many (though not all) of those who are suffering from cuts are the low and middle-income people at the bottom rung of the company ladders. What most of the union workers expressed was a more evening out of the cuts, so people aren't suffering together, rather contributing to the welfare of their state together.

Thank you both for your comments!
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July 1, 2009 | 4:10 PM
What doe's that mean "so people aren't suffering together, rather contributing to the welfare of their state together." Sounds like political double speak so as not to offend anyone.

I propose 15% cuts across the board to balance the budget, that way no one program or agency feels like another is getting special treatment.

Seth, please explain your idea on State bondholders.
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edited on  July 1, 2009 | 5:12 PM
Hawa, most private companies are considered small businesses, where the owner-operator is the first person to take a cut.. Many owners are working without any incomes right now in an effort to save their business. In middle to large size businesses, most upper management is taking 20-50% cuts in pay, middle management 20-30%, and the lesser paid employees take a small, if any, cut. That is real life, and not what the liberal media would like to you know.
It wouldnt take anyove veryu long to do a search of all the companie that have gone out of businesses and all the people at the company have taken a 100% cut.
Only a 15% cut? Thats a fantastic deal considering the condition of the economy!
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July 2, 2009 | 9:57 AM
Thsas, I understand that most private companies are small business, which is why I tried not to generalize. Also, I know that small business owners aren't all upper-middle class income generators, which is why some of the people in these businesses suffering the hardest fall into lower and middle-income brackets as well--especially right now. I know this by speaking to people on the street, the "liberal media" has little to do with what I understand.

And yes, an across the board cut is an evening out of the pay cut worries, but how that would pass is another story!

I really appreciate the dialogue that's being driven here, I am definitely absorbing a great deal of knowledge from you.
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July 1, 2009 | 4:03 PM
Some bondholders of General Motors lost money when it filed for bankruptcy protection and got a taxpayer bailout. Why can’t the state negotiate with its bondholders to bear some pain to help balance the budget?
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July 1, 2009 | 4:17 PM
That's an idea, but if the State ever wants to sell Bonds again they will have fewer investors interested in buying bonds because of this risky record of not paying back what was barrowed. Future investors of bonds would also want a much higher interest rate which will then cost the tax payers of CA even more.
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July 1, 2009 | 4:24 PM
So the State of California should file for bankruptcy?
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July 1, 2009 | 4:39 PM
Federal law permits individuals, businesses and local governments to file for bankruptcy reorganization and sometimes debt forgiveness. States are not covered by the law. No U.S. state has ever declared bankruptcy.

California could keep going by not paying back money it has borrowed. This move is unlikely and the consequences of default would make the state's financial situation worse. It would greatly hurt the state's ability to borrow in the future. Plus, the people California owes money to could go to court to force the state to pay.

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July 1, 2009 | 8:20 PM
Nice job, Hawa. I like the way you included a lot of different experiences and perspectives to make the issue real for readers, and it was nicely written.
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July 1, 2009 | 9:17 PM
Thank you very much, Suzanne! That really does mean a ton to me coming from you!
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July 1, 2009 | 9:40 PM
way to go hawa, great angle! :)))
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July 2, 2009 | 8:36 AM
Ben and Trapper,

There is no need for CA to default on its bonds. Instead, the state could raise taxes on upper-income bondholders.

I doubt that investors will avoid CA bonds as a result of higher taxes on the well-heeled. In the current crisis of financial fragility, investment safety trumps risk.

In terms of federal bankruptcy law, private companies use it to void labor union agreements on pensions and wages. U.S. air carriers have done just that to their union workers.

Currently, the governor is using the state budget crisis similarly to cut pay via furlough days for (most of the) state work force. His recent proposal to reduce retirement pensions for new state worker extends this aping of private sector trends.
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edited on  July 2, 2009 | 1:39 PM
Oh how easily you give of others! Everyone really knows where the money is being wasted and how, but we can't speak of such things! Why do we want to punish the workers and earners, and not campaign endlessly to end the fraud, abuse, and crime?
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July 2, 2009 | 9:45 AM
Thank you Sonia!

And Seth, you raise some really great issues as well. Thanks for bringing in some clarity with examples.
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July 2, 2009 | 2:13 PM
The recession comes from the private sector. That is where the vast bulk of Americans labor. Cutting government spending will weaken the private sector.
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July 2, 2009 | 9:49 PM
Right, if the government owned and controlled more of the private sector there would not have been a recession. Oh wait, they have started to doing that right now with banks, healthcare, automotives… lets see how that goes.
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July 3, 2009 | 9:43 AM
Have you heard of the housing crash? That is what caused the current recession.
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edited on  July 4, 2009 | 12:07 PM
Yes, crreated my a govening body that made it illegal to NOT give homeloans to people who would never actually qualify, with the process overseen and approved by other government departments, and investigated and validated by yet other government departments.
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July 5, 2009 | 8:38 AM
There was over-investment in U.S. real estate, commercial and residential. In sum, we saw too much production chasing too little consumption. This imbalance is nothing new. Investors have partial information about future demand and supply. The rise and fall of too many U.S. industries is proof of that.
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