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From Golden State to 19th-century backwater

California's budget crisis is threatening its entire welfare and healthcare programmes. The state may never be the same

• 
• • Sasha Abramsky
  • guardian.co.uk, Thursday 28 May 2009 22.00 BST
  • Article history

Imagine a state that considers itself progressive, cutting edge, the envy of the world. Imagine a state with the globe's fifth largest economy. Imagine a state, population 37 million, with more wealthy people than practically any other spot on earth. Imagine a state that once had by far the best public infrastructure in America and a voting public that was deeply committed to its premier institutions.

Now imagine that state so cash-strapped, because of decades of anti-tax revolts and irresponsible, unfunded, spending mandates, that it can't pay even its basic bills and is hoping to sell off prized public lands and buildings to plug just a tiny fraction of its deficit.

Welcome to California. America's Golden State is so deeply in the hole that governor Arnold Schwarzenegger has just announced $5bn in emergency spending cuts, and plans a further $3bn in cuts a few days from now. This is on top of the tens of billions of dollars pared from the budget last year, cuts that already have removed vast sums of money from the state's schools, furloughed thousands of workers and shuttered numerous state agencies.

On the cutting block: the entire state welfare programme. That's $1.3bn. Plus, in ending all welfare in California, the state will lose another nearly $4bn in federal matching funds. California will be, according to Wednesday's papers, the only state in America – and quite possibly in the western world – that doesn't provide even subsistence benefits to impoverished children.

Let me reiterate that. If Schwarzenegger's cuts go through, California, which has long prided itself on being a place where nobody goes entirely without, where the safety net takes care of the most vulnerable, will soon make Mississippi and Louisiana – where thousands were left to drown after Hurricane Katrina – look generous and far-sighted when it comes to anti-poverty programmes.

What else will go? The entire state-funded healthcare programme that currently provides healthcare to nearly one million low-income children. All state money for the running of state parks. Nearly a billion dollars from higher education budgets. Not far shy of a billion dollars in money used for rehabilitation services (drug treatment, education, job training) for prisoners. Oh, and don't forget the $55m that will be saved from reducing the state's commitment to fund Aids tests.

To use words like "counter-productive", or "short-sighted" to describe these cuts doesn't begin to do justice to the scale of the disaster being mapped out in Sacramento. The state is essentially going to step back into the 19th century and watch while millions fall into destitution, while illnesses go untreated, while school services are decimated and while addicts who want help are turned away.

Can anyone think of a few likely consequences down the road? Well, how about rising crime, epidemics, increased illiteracy rates, the spreading presence of shanty towns, increased gang violence as the informal economy fills the vacuum left by these state rollbacks.

Of course, it's possible that Schwarzenegger is simply playing a brilliant game of political brinkmanship. Perhaps he's hoping the Feds will ultimately step in and bail California out, that the spectacle of Californian state government in its death throes will simply prove too unpleasant for Washington to stomach.

Or perhaps he's hoping legislators will show a glimmer of rationality and, biting the bullet, actually raise taxes enough, in tandem with some necessary spending cuts, for the state to continue providing vital social services at a time when 11% of its workforce is unemployed and millions more are in poverty. Or maybe he's hoping a consortium of billionaires – Hollywood moguls, Silicon Valley whiz kids, agricultural tycoons and the like – will ride to the rescue with huge donations or loans to the state.

If he is, he's likely pissing in the wind. California's in the hole it's in partly because of the national economic meltdown, but the scale of its troubles is homemade.

It's because the voting public is utterly schizophrenic: through the initiative process it has repeatedly voted to limit the state's ability to raise taxes. And, at the same time, it has voted again and again for expensive programmes for one needy group after another. It doesn't take a rocket scientist to conclude this combination is inherently unsustainable. So why should the Feds or wealthy private donors pull California's chestnuts out of a fire largely of its own making?

And as for the hope that legislators in Sacramento will suddenly see the light and behave like grown-ups, well, there's scant evidence they're moving in that direction. New York Times columnist Paul Krugman recently wrote that California is becoming a banana republic. That's probably being charitable. The state's political system has been a scandal for years already.

California's political leadership has consistently shown a stunning absence of backbone, intelligence and foresight. It is chronically dysfunctional, hobbled by term limits that deprive Sacramento of experienced political figures who have spent the time learning how to wield power effectively, at the mercy of special interests pushing their pet policies via the initiative process.

Sacramento has a Republican minority as insanely ideological as the worst of the rump-GOP in Washington. And it has a Democratic majority unable to adequately protect social programmes during economic downturns and equally unable to articulate a coherent vision that explains to a cynical public just why those programmes are needed.

When hard decisions have to be made, they are routinely shunted off to be dealt with by popular initiative rather than by the elected officials themselves. And, as routinely, when crunch-times arrive, paralysis sets in along the corridors of power.

We're sliding down the rabbit hole now. Old certainties are gone. A new California is emerging. It's surreal. The sun is still shining. People still swim and jog. They look happy. The flora and fauna are still beautiful.

And yet, make no mistake, a societal upheaval is underway. The state is reinventing itself again. And this time, with the public largely unengaged and unaware, it is doing so in an ugly, stupid, immature way that should bring howls of "shame" from the rest of the nation.