Agendas, budget shortfalls hurt the elderly
California’s government has many agendas contained within its 2024-2025 budget, but the state claims it lacks the financial resources to meet its Master Plan aspirations. Agendas cost money. Your money. The state is over $68 billion short of its budgeted operating expenses and will operate in the RED, but state leaders allege “all will be well” once business tax hikes and cuts in state agencies’ budgets take effect.
However, the California Department of Finance, Los Angeles Times, Associated Press, Fox News, and others believe state revenue is more than sufficient to meet its agenda, but funds are being grossly mismanaged leading to poor service delivery and cuts in services to state residents.
The state’s budget reserved billions of dollars to provide services to illegal immigrants—including free gym memberships—while clearly abandoning the needs of the state’s elderly, its middle class, and K-12 students. The governor and legislature have persistently refused to cut costly programs to illegals and that continues to attract more illegals into the state, a population now exceeding 2 million, or 0.5% of the state’s population.
The state faithfully supports its illegal minority as at least one-third of its illegal residents are on Medi-Cal or a similar state-provided welfare program. The once projected $100-billion surplus from just two years ago has disappeared causing a fiscal destabilization of the state. David Crane from the non-profit Govern for California said, “The deficit is a result of expenditures” and critics continue to accuse Democrats of mismanaging the state’s finances, including the bizarre enactment of AB2847 known as the “Excluded Workers Pilot Program,” or the payment of unemployment benefits to illegals that allegedly worked during the COVID-19 pandemic. The legislature asserted illegals placed themselves at risk while working during the pandemic thus earning this state benefit. The state, despite the massive budget deficit, continues to pay $300 in weekly unemployment benefits at a price tag of approximately $32 billion per year through 2025.
No matter your views on immigration, seriously, the state’s seniors and businesses are hurting from California’s inattentiveness to its fiscal responsibilities and its obsession with supporting illegal immigrants.
The governor’s revised budget eliminates the state’s food program to prevent low-income seniors from having food insecurities, but the budget will continue to support disabled illegal immigrants needing healthcare and other services. Plus, 66 skilled nursing facilities have closed in the past four years due to excessive, state-imposed fees and overregulation. That has also affected seniors in need of a higher level of care.
Businesses will not get the promised tax cuts which, say employers, will cause a “scramble to scale back on employees or inventory to cover the cost of an unexpectedly higher tax bill.” This is the second time in five years that the state has promised business tax cuts but reneged on its promise. In addition, the revised state budget will include a two-year temporary tax hike on businesses with more than $1 million in taxable income, but it is doubtful the state will keep yet another promise of eliminating the temporary tax especially if the state is reaping more income.
What are businesses doing about paying higher taxes and coping with California’s continued broken promises?
According to the Hoover Foundation, in the last three years, California lost eleven Fortune 1000 companies, whose exits have negatively affected California’s economy. Much smaller but rapidly growing unique businesses, such as Envirotech Vehicles (a manufacturer of zero-emission commercial vehicles) and Maxar (a leader in developing space technology), have left the state taking their innovative ideas, money, and employees with them.
Since April, the governor and legislature have asserted the state’s $20/hr. minimum wage hike to fast-food workers is a success. However, USA Today, CalMatters, MSN Money, National Public Radio, and the Wall Street Journal report the extra money only helps workers if the worker remains on the payroll. Fast-food restaurants have cut 9,500 jobs opting for robotics over people and have implemented hiring freezes. Consumers are paying up to 22% more for their not-so-happy meals. The minimum wage increase was not aimed at working class families but rather younger and inexperience workers. Fast-food restaurant employers say they cannot afford to dedicate resources to workers usually under the age of 24 with a turnover rate of 100% within a year of hire. The program has clearly failed.
Unfortunately, the state continues to listen to union leaders instead of business owners. Chapman University researcher Raymond Sfeir said, “…the increase will bring layoffs, higher prices for consumers, more use of technology and restaurant closures.” The Los Angeles Times reported Rubio’s Coastal Grill has closed 48 California locations, Red Lobster has closed many state locations, Round Table Pizza and Pizza Hut have also closed many franchises in the state. In fact, both pizza franchises have terminated 1,300 delivery drivers because of the increased wages and deliveries no longer bring in revenues. The fast-food wage legislation has been labeled as “one of the uglier pieces of legislation to have come out of Sacramento.”
Indeed, California’s unemployment rate did edge higher in May, reaching 5.42%, a 0.12% increase since February, according to Sfeir. Another fallout has been the expectation from workers in other industries to receive the same or higher minimum wage, for employment, including the assisted living industry—caregivers want $20/hour or more—with costs passed along to the elderly, a class of persons being neglected, even abused, by the state.
California’s insistence upon providing welfare and other benefits to illegals comprises a sizable portion of the state’s budget and the legislature wants to continue all benefits at taxpayer expense but to the detriment of citizens and businesses. Recent census data shows California’s population has declined to 38.8 million, a drop of over 600,000 since 2020, attributed to the exodus of jobs, businesses, retirees, and employable persons.
Furthermore, the state’s labor unions, especially the Service Employees International Union, are angered by the delay of implementing the minimum wage of $25 per hour to 426,000 healthcare workers (mostly ancillary positions, not critical nursing positions). The implementation delay is predicted to save the state $2 billion, an amount disputed by labor unions who want hospitals to cover the additional costs, a move that will drive up the cost of healthcare in California. Also, $15 billion in tax breaks to the state’s business community will be delayed for three years. Newsom justified this by stating the state was preserving programs that expand “behavioral health services and combating homelessness.”
Enter Planned Parenthood, one of the governor’s biggest donors. It is insisting the governor stick with “an agreement” he made with the organization and others to increase reimbursement rates to Medi-Cal providers who have opened their practices to Medi-Cal recipients, a big portion of Planned Parenthood’s clients. It wants the state to use taxes collected from managed care organizations (MCOs) to pay medical providers. In fact, the 2024 ballot will have a measure to permanently establish the MCO tax to increase reimbursement rates to healthcare providers, especially those who perform early and late-term abortions, known as the “women’s health program” one of the biggest programs offered by Planned Parenthood.
The state’s Medi-Cal budget stands at $6.9 billion that includes many illegal immigrants. At least, the state’s program of “internet for all” was placed on hold. However, the voter-approved Prop 98, minimum funding guarantee for schools and community colleges, will also be delayed—again. This has angered the California Teachers Association which has been openly critical of the governor.
So, what is really going on in California? Somehow get more money to spend or have better government to responsibly spend it?