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State's middle class getting less for its tax dollars

NEWS ANALYSIS

Prized programs like higher education and freeways have been sacrificed for years, a trend likely to be accelerated by new increases.

March 01, 2009|Evan Halper

SACRAMENTO — Middle-class Californians have long griped about paying more taxes than they might pay elsewhere, but for decades this state could boast that it gave them quite a bit in return. Now that contract is in doubt.

A modern freeway system, easy access to superior universities and progressive health programs used to be part of the compact. Even local schools plagued with financial problems continued to offer small classes, innovative after-school programs and advanced arts and music curricula.


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But at a time when taxes are about to rise substantially, the services that have long set this state apart are deteriorating. The latest budget cuts hit public programs prized by California's middle class particularly hard -- in some cases at the expense of preserving a tattered safety net for the poor -- following years of what analysts characterize as under-investment.

The governor's signature on the new spending plan, some experts say, has accelerated the sunset of a way of life in California.

"Twenty years ago, you could go to Texas, where they had very low taxes, and you would see the difference between there and California," said Joel Kotkin, a presidential fellow in urban futures at Chapman University in Orange. "Today, you go to Texas, the roads are no worse, the public schools are not great but are better than or equal to ours, and their universities are good. The bargain between California's government and the middle class is constantly being renegotiated to the disadvantage of the middle class."

The reasons are varied. The cost of services continues to outpace inflation. Programs are being squeezed out by things the government was not providing in the halcyon 1950s and early 1960s, including Medi-Cal and some welfare programs. And the state has been reluctant to embrace new ways of funding services while holding back state money to plug other holes in the budget.

"We keep shifting money over to programs where there has been rapid growth, like prisons or healthcare," said Ross DeVol, director of regional economics at the Milken Institute, a Santa Monica think tank. "Ultimately, you pay a price for that."

Perhaps nowhere has that become more obvious than in the state's freeway system. Even the infusion of federal dollars on their way from Washington will make only a small dent in repairing the shoddy network of roads that once was a sturdy backbone of the state's economy. The patchwork of local sales tax increases being put in place in various communities to fund transportation projects also will go only so far.

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