Poisonous Budget Spider Uncovered

FEB. 28, 2011

BY WAYNE LUSVARDI

There is a line in Sir Walter Scott’s novel Ivanhoe where a gentleman is…

advised to remember that all the wealth he had acquired by sucking the blood of miserable victims had but swelled him like a bloated spider, which may be overlooked while he kept in a corner, but would be crushed if it ventured into the light.

So it was with Jerry Brown, who, like a Brown Recluse Spider, ventured out from his dark corner of the Governor’s Office and into halls of the State Legislature Budget Committee meetings this past week, as reported by Katy Grimes in “Is An All Cuts Budget Ahead?

Now that the light is shining on Brown’s proposed budget, it should be clarified that his projected $25 billion State General Fund Budget deficit is over an 18-month period and really equates to $16.6 billion on an annualized basis.  It may be less than this if tax revenues exceed budget projections.

Brown’s foray into the halls of the Legislature raises a question: How bloated is state government? Perhaps much more than Governor Brown wants to report. The portrayal in the media is that state agencies and public schools have been cut to the bone. But consider the following:

1. Schools. The Legislative Analyst’s Office found that union protectionism of certain non-core job “categories” in K-12 schools made school district budgeting nearly impossible. So the legislature partly “deregulated” the categorical programs and most school districts did not have to lay off any core teachers in 2010. The LAO indicated more “categorical” jobs could be deregulated, meaning there still is some fat in the budget.

For example, my local school district in Pasadena, with a $200 million annual general fund budget in 2009, had a $35 million cut (about 17.5 percent cut) for 2010, but laid off no core teachers, despite claiming that they did lay off teachers.

Despite this cut, the California Department of Education website indicates that the Pasadena Unified School District spends about $1,000 more per student than surrounding wealthier school districts in San Marino, La Canada, Arcadia, etc.  This translates into $18 million more than surrounding school districts or the  Los Angeles County average spending per student.

2. Community Colleges. The funding formula for the state community college system is based on counting numbers of students at the start of each semester in order to figure out Full Time Equivalent teacher funding. But as anyone knows who ever attended junior college, many students drop out or transfer to other classes before the midterm. So the current funding formula is inflated.

If the formula were shifted to count students, say, after midterm tests, the funding could be cut without having to cut teachers.

3. Housing. The Department of Housing and Community Development cut nearly half of a billion dollars ($490 million) and didn’t have to lay off anyone.

According to Jeff Macedo, public affairs representative for the CHCD, only $38 million in Federal funding was cut from HCD’s budget for 2011-12 as a result of the one-time Disaster Recovery initiative funded last year.

One could go on and on with examples of how inflated funding formulas are with each state agency.

If Gov. Jerry wants to be more than a symbolic ascetic monk-like figure, he will have to do some real budget cutting to gain more credibility with the voters for the continuation of his oxymoronic package of “temporary” but permanent taxes.

Right now, I think many voters are suspicious that there is much, much more budget cutting that could be done without having to cut essential services.

Moral: Brown Recluse Spiders that dash across open floors are risking being metaphorically squashed by taxpaying foot soldiers wearing combat boots.

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  1. Wayne Lusvardi
    Wayne Lusvardi 28 February, 2011, 16:37

    Jeff Macedo, the Public Affairs representative for Housing and Community Development (HCD), and this author have been sending emails back and forth and I thought it best to clarify my above article.

    First, compliments to Mr. Macedo for doing an outstanding job of responding to my questions. Unlike other state agencies that have refused to respond to this journalist’s questions, Macedo has provided very honest and complete answers.

    Second, it should be clarified that what I am pointing out in the above article are examples where state agencies or legislators cut back their budgets by deregulation (K-12 schools), by changing funding formulas (community colleges), and by curtailing bond issues that may or may not be needed (HCD) to reduce their budgets, with minimal or no layoffs of core staff. Layoffs of public employees just adds to the unemployment burden. So the above article is critical of Governor Brown but can also be read as complimentary to state agencies where merited.

    Here are Jeff Macedo’s comments by email which he has approved for posting:

    ————————————————————-

    I just read the story you just posted and am surprised at the view of our budget versus our staffing levels. By saying that we cut $490 million without laying anyone off makes a spurious connection. HCD has definitely lost staff, which was addressed in my first set of responses. In addition, the great bulk of the budget reduction was due to award programs that have been affected by the pause. Again, HCD manages our staffing levels judiciously. The upcoming budget proposal reflects those positions that have been eliminated and funding in those categories has been reduced.

    I’d hope that you update your blog post to include the information I had originally provided you. To say that the HCD budget reduction reflects an inflated budget is wildly inaccurate and unfair. — Jeff

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