Jerry Brown’s deficit teeter-totter game

May 23, 2012

By Wayne Lusvardi

Imagine a teeter-totter with a chubby boy on one end and a thin boy on the other.  The teeter-totter can be balanced either by two chubby boys or two thin boys.  It can be balanced heavy or balanced light — either way will work.

Under Proposition 58, California is required to balance its budget.  California Gov. Jerry Brown wants you to believe that the California budget needs to be balanced heavy or high. That is apparently how he is coming up with his $16 billion state budget deficit. It is not a lie to say the budget needs $16 billion to be balanced — however, it is possible that the budget could be balanced without the $16 billion.

Even the State Legislative Analyst now acknowledges there is no need to cut $5.5 billion from the K-12 school budget.  This statement essentially undermines the need for Brown’s $8.5 billion tax increase on the November ballot.

Composition of the General Fund

There are several pots that make up the state budget. Brown wants you to look at the pot of the state operating-budget — called the general fund — shown in Column 1 in the table below.  The general fund has declined only about 10 percent, or a total of $10 billion, since the peak of the Mortgage Bubble in 2007.  The prior reported state budget deficit was estimated to be just about ten billion dollars. But Brown now says the falling tax revenues have made the general fund budget deficit increase to $16 billion.

Sales and income tax receipts have reportedly declined.  But total expenditures including Federal fund transfers have increased 8.1 percent, or a total of $15.84 billion, from 2007 to 2012 (see Column 7 below).

Overall state spending in California is up, even though some components of the budget have decreased.

The “general fund” (Column 1 in table below) can be gamed to the point where it is meaningless.  As writer Alyssia Finley of the Wall Street Journal writes in her article “Will California Ever Learn”:

“For the past several years legislators have been using special funds [fees earmarked for special purposes –- see Column 2 below] to pay for programs that are usually financed by general fund spending.”  This is what the term “fungible” means –- the funds can be applied to several categories.

The best number to look at is Gross Spending Minus Federal Funds (Column 5 below).  Based on that, the state budget is running less than a $1 billion –- or 0.5 percent –- shortfall.  That is without considering President Obama’s and California Attorney General Kamela Harris’s $18 billion foreclosure bailout for California.  Brown is diverting about $410 million of that bailout into the general fund.

Moreover, according to the state Department of Finance website, 85 percent of the $749.5 billion in General Fund Deficiencies – or $635.1 million – are in Medi-Cal.

Public education is not shown as running a deficiency. The apparent reason is that public schools “sell well” with middle-class taxpayers while Medi-Cal can’t be sold to the public as convincingly.

The California budget is teetering — but Its imbalance is caused by chubby-boy spending, not skinny tax receipts.

Historical Budget Expenditures

Fiscal Year (1)General Fund (2)Special Funds (3)Totals (4)Bond Funds  (5)
Budget Totals
w/out Federal Funds
(6)Federal Funds (7)Expenditure

Totals Including Federal Funds

(8)Special Fund For Economic Uncertain-ties
2007-08 102.985 26.673 129.659 8.405 138.065 56.211 194.276 1.296
2008-09 90.940 23.843 114.784 7.601 122.386 73.089 195.475 -7.391
2009-10 87.236 23.514 110.750 6.250 117.000 89.088 206.089 -6.112
2010-11 91.549 33.432 124.981 6.000 130.981 84.764 215.745 -3.797
2011-12 86.512 35.587 122.100 13.141 135.241 78.703 213.945 -1.704
2012-13 92.553 39.824 132.377 4.950 137.327 72.784 210.112 1.131
Change in Dollars -$10.4 +$13.15 +$32.38 -$3,455  $738 +16.573 +$15.84  0.17
Percent Change Minus10.1% Plus51.6% Plus2.1% Minus41% Minus0.5% Plus
29.5%
Plus8.1% Minus12.7%
Source: California Department of Finance

37 comments

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  1. Ulysses Uhaul
    Ulysses Uhaul 23 May, 2012, 08:16

    You could go mad…strapped to a wheel chair like Hannibal Lector with spit spewing from your hockey mask and wailing “I Love You Jerry”.

    Reply this comment
  2. Rex The Wonder Dog!
    Rex The Wonder Dog! 23 May, 2012, 08:38

    All Jerry Clown needs to do is FREEZE gov pay and benefits levels for 5-10 years, and even with a freeze like that they will still be FAR ahead of the real world employees who get far less in both pay and benefits, and no job security at all.

    But he just gave the prison guard union a HUGE pay increase-HUGE- and that is just not going to stop until the tax hikes are stopped. So When the Clown Pension taxes fail he will have to get serious about freezing pay and benefits.

    Reply this comment
  3. Hondo
    Hondo 23 May, 2012, 10:22

    With the HUUUUUGGGE amount of money the unions will throw at the tax increase ballot measure, its likely it will pass. But you have to look a Illinois and Connecticut. They both had HUUUUUGGGEEE increases in taxes and look where they are now, especially Illinois. They still can’t balance their budgets. Illinois still has HHHUUUUGGGE budget deficits.
    Jerry Brown promised us an honest budget, without smoke and mirrors. What Kali got was more ducts and chutes and smoke and mirrors that a Halloween haunted house. A balanced budget ended up 17 billion in the hole.
    Happy Halloween Kalifornia.
    Hondo

    Reply this comment
  4. Beelzebub
    Beelzebub 23 May, 2012, 10:27

    All Clown needs to do is implement state mandatory E-Verify to chase away all the illegal leeches and we would find a minimum of $10B in expenditure savings. That in conjunction with cutting government pay and going to defined contribution retirement programs for the trough feeders would put the state back into the black.

    But none of that will happen. Why??? Because of massive political corruption and fraud. That’s why! There’s alot of money in corruption and fraud – as long as you are on the right side of it. Especially when the enforcement arm is deliberately asleep at the wheel!!! 😉

    Reply this comment
  5. Beelzebub
    Beelzebub 23 May, 2012, 11:07

    Btw, Wayne. This was a very informative article and I thank you for it. I learned something that I did not know. The extent to which these fraudsters are diverting funds from baskets of money not intended for general fund revenue is horrendous and just goes to show how far gone this State is.

    My compliments on the article. I would never find such detailed information in the mainstream media.

    Reply this comment
  6. Wayne Lusvardi
    Wayne Lusvardi 23 May, 2012, 11:22

    Please note: all the numbers in the table are in billions of dollars.

    WL

    Reply this comment
  7. Generoyb
    Generoyb 23 May, 2012, 11:53

    Where is the complicit main stream media on this? Yup, you got it

    Reply this comment
  8. Ken
    Ken 23 May, 2012, 14:03

    I’m gonna read this about six times and get back to you! In the meantime, this sentence cannot be correct. Check the metrics.

    “Moreover, according to the state Department of Finance website, 85 percent of the $749.5 billion in General Fund Deficiencies – or $635.1 million – are in Medi-Cal.”

    Reply this comment
  9. Ulysses Uhaul
    Ulysses Uhaul 23 May, 2012, 14:05

    How long till the collapse?

    My neighbor told us seniors not to worry. They have a diversified selection in their gun vault to keep the hoards at bay!

    On second thought…where is my Cabelas mail order catalog?

    Reply this comment
  10. Wayne Lusvardi
    Wayne Lusvardi 23 May, 2012, 14:43

    Ken:
    Click on the link embedded in that sentence. You can see for yourself the Dept. of Finance website and where I got the numbers.
    WL

    Reply this comment
  11. Beelzebub
    Beelzebub 23 May, 2012, 14:50

    “My neighbor told us seniors not to worry. They have a diversified selection in their gun vault to keep the hoards at bay!”

    I have news for you, dear. Obama, the long legged mac daddy, is screwing you over while I type. He is raising your Medicare premiums while taking away routine services that have been traditionally provided to seniors. If he is reelected you will be darn lucky if you aren’t eating dog food so that you can pay your medical bills. No exaggeration.

    Reply this comment
  12. The Ted Steele System
    The Ted Steele System 24 May, 2012, 06:06

    Beezygirl– Why would you continue to use a phrase that many feel is a racist term? Are you a troll?

    Reply this comment
  13. Wayne Lusvardi
    Wayne Lusvardi 24 May, 2012, 07:13

    It should be pointed out the Redevelopment is a “Special Fund.” When Gov. Brown phased out redevelopment he essentially shifted $5 billion in potential property taxes from the “Special Fund” category to the “General Fund.”

    Reply this comment
  14. Beelzebub
    Beelzebub 24 May, 2012, 07:21

    “Why would you continue to use a phrase that many feel is a racist term?”

    Up early this morning, aren’t you Mr. Race Baiter???

    I have already proven to you that the origin of ‘mac daddy’ is take from the french language and has nothing at all to do with race. In fact, it was directed originally toward caucasian french and english men. The ‘long-legged’ add-on was actually coined by a black minister, Rev David Manning. Is Rev Manning a racist?

    And I have used the term to describe both Jerry Clown and George W. Bush. It can appropriately be used across the political spectrum as I have shown.

    You are like one of the provacateurs who attend peaceful rallies and try to provoke physical confrontations. IMO people like you should be banned from the human race.

    Reply this comment
  15. Ted Steele, American
    Ted Steele, American 24 May, 2012, 10:31

    “I have already proven to you…”

    LOL—- you’ve proven nothing to me. Except maybe that your posts continue to use the highly offensive phrase. Is it that you just are not bright enough to make up your own phrases? You have to use dodgy phrases from Rev . Manning that by most accounts are considered to be questionable regarding context and race? I mean if the journalists out here used that term in the articles posted here don’t you think that would be fair comment? Do you think it’s disrespectful to the office of the President to refer to any office holder as an urban pimp?

    You have proven little.

    Reply this comment
  16. The Ted Steele System
    The Ted Steele System 25 May, 2012, 06:42

    Beezy– you have not proven anything to me. How could I be a race baiter??? I don’t use provocative racial statements like you do. Why don’t you stick to the topics?

    Reply this comment
  17. Beelzebub
    Beelzebub 25 May, 2012, 10:52

    “I mean if the journalists out here used that term in the articles posted here don’t you think that would be fair comment?”

    I’m not part of the politically correct journalism world. I’m a free man! 😀

    I have already proven that the phrase “long-legged mac daddy” is not racial in origin. Intelligent people have already accepted it.

    “Do you think it’s disrespectful to the office of the President to refer to any office holder as an urban pimp?”

    There are different kinds of pimps. Obama is a poltical pimp. In fact, he’s the biggest political pimp. That’s why we call him “long-legged”.

    Long legged mac daddy is applicable to all races. I have used the term interchangably on the boards. It is not race specific. You are just a race-baiter who’s trying to create something that’s not there. Don’t you have some sort of rally to attend today? Can’t you go to a college tuition rally or a medicare rally and try to stir up some trouble there instead of coming here, Mr. Provacateur? 🙂

    Reply this comment
  18. Ted Steele, American
    Ted Steele, American 25 May, 2012, 11:02

    Wow– you just don’t answer the questions…afraid of the truth?

    You don’t find gross disrespect to the office calling the President of our nation that term?

    You are confusing “proved” with “proved to me”. You have proven nothing to me little buddy. The use of that term tells us all more about you than it does about our President.

    Reply this comment
  19. Beelzebub
    Beelzebub 25 May, 2012, 12:00

    “You don’t find gross disrespect to the office calling the President of our nation that term?”

    The POTUS has shown complete disrespect and disregard for the common ordinary citizen in America who plays by the rules and follows the laws of civilization.

    So why would anyone owe him respect in return??? Is he a King with absolute power??? heh. Perhaps you’d be happier living an autocracy where you get to worship people who crap on you. We aren’t there YET. heh.

    “You have proven nothing to me little buddy”

    You don’t count because you have proven to me over the course of time that you don’t have much brainpower.

    I was referring to intelligent people. 🙂

    Reply this comment
  20. Ted Steele, American
    Ted Steele, American 25 May, 2012, 15:44

    I guess you still can’t answer the qustion?

    Hmmm…..While you may dislike the current occupant of our Presidency I guess you don’t want to answer the question:…Doesn’t your calling him a racialy questionable term for urban pimp demeans the office that many of us Americans hold dear?

    Or is the real truth that you don’t care?
    Or are so slow that you can’t articulate a more clever moniker without so much disrespect for the office?

    Discuss-

    Reply this comment
  21. Beelzebub
    Beelzebub 25 May, 2012, 16:20

    “I guess you still can’t answer the qustion?”

    I answered the question. Go ask a 5th grader to explain it to ya.

    “Doesn’t your calling him a racialy questionable term for urban pimp demeans the office that many of us Americans hold dear?”

    “racialy”?? There you go again. Substantiating your tuition rip-off at your alma mater.

    IMO Obama is a political pimp. He pimps common ordinary law-abiding, productive American citizens. That’s what he does. Hence, my disrespect is earned.

    “Or are so slow that you can’t articulate a more clever moniker without so much disrespect for the office?”

    I don’t disrespect “the office”. I disrespect Obama. Depending on who the President happens to be – that’s who gets my respect or disrespect. As far as I know Americans have done that since the Founding Fathers authored the US Constitution. You need a crash course in American national culture. Are you a recent immigrant by chance??? Oh wait, I forgot. You’re a philo grad from an American University, ain’t ya??? heh. You embarrass me. Seriously, no joke. You really do.

    Reply this comment
  22. Wayne Lusvardi
    Wayne Lusvardi 25 May, 2012, 17:40

    To give another example of transferring monies between general, special, bond, and Federal funds, the Strategic Growth Council, an entity created under AB 732 in 2008 to allocate Cap and Trade taxes was funded with monies from the Water Bond Act of 2006. In other words, bond monies are funding part of the operational costs of the Secretary of Natural Resources, the secretary of Business, Transportation and Housing, the secretary of Environmental Protection, and the secretary of the Office of Planning and Research — all of which should be funded from the General Fund. The Strategic Growth Council was allocated $500,000 in bond money. I’m sure the heads of these cabinet level departments then took credit for cutting their operating budgets – when what they did was just shift costs on to bond funds.

    Reply this comment
  23. Martie Turner
    Martie Turner 26 May, 2012, 09:32

    Jerry Brown is lying about Ca being broke and should be jailed for perjury. Look at the Comprehensive Annual Financial Report and you will see that they are hiding $577 billion in investment fund balances that aren’t being reported by the California State Government on its budget report? Under their own law.This report is kept from the public.On a budgetary basis, the State’s funds are classified as either governmental cost funds or nongovernmental. Governmental cost funds derive their revenue from taxes, licenses, and fees that support the general operations of the State. The appropriations of the budgetary basis governmental cost funds form the annual appropriated budget of the State.
    Crooks are what they all are.Every state , county, city has Comprehensive Annual Financial Reports .

    link..http://realitybloger.wordpress.com/2012/05/25/california-government-hides-billions-from-taxpayers/

    Reply this comment
  24. The Ted Steele System
    The Ted Steele System 26 May, 2012, 09:44

    Beezyboob— Using a phrase about urban pimps in the context you use it demeans the office of the President and says more about who you are as a person and nothing about the office holder. Everyone out here knows it but you. Ever notice the phrase is only used by you and maybe one other tool out here?

    discuss-

    Reply this comment
  25. Beelzebub
    Beelzebub 26 May, 2012, 09:57

    “Beezyboob— Using a phrase about urban pimps in the context you use it demeans the office of the President and says more about who you are as a person and nothing about the office holder”

    Screw you teddy. I already explained the phrase and it’s context. You’re just another ignorant provocateur trying to create problems for 5 minutes of fame. If you don’t like me disrespecting the POTUS call the Secret Service and report me. heh. See what they tell ya. heh. You need to relocate to Zimbabwe and apply for citizenship. People with your philosophy are welcomed with open arms there. And maybe you can attend the University of Zimbabwe and try a do-over on that college degree of yours!!! HAH! 😀

    Reply this comment
  26. The Ted Steele System
    The Ted Steele System 26 May, 2012, 15:48

    I mean don’t you have any self respect? Demeaning the President with a term most find racially insensitive, at a minimum, makes you look pretty ignorant.

    Does that bother you?

    Reply this comment
  27. Beelzebub
    Beelzebub 26 May, 2012, 16:32

    “I mean don’t you have any self respect?”

    Sure I do. That’s the reason I stand up for myself and point my finger at a ‘long-legged mac daddy’ when I see one. I have called out many naked emperors in my day. And I’m not about to stop now! 😀

    “Demeaning the President with a term most find racially insensitive, at a minimum, makes you look pretty ignorant”

    My disrespecting the POTUS has nothing to do with race. It has to do entirely with his behavior. He has earned my disrespect. Every ounce of it. He is a political pimp IMO.

    There, does that make you feel better? 🙂

    Reply this comment
  28. the Ted Steele System
    the Ted Steele System 26 May, 2012, 18:11

    Well little man– when you throw terms out there widely considered racial— expect to be called out.

    The use says alot about you.

    Reply this comment
  29. Beelzebub
    Beelzebub 26 May, 2012, 18:25

    “The use says alot about you”

    Quite frankly, I don’t give a flying frack what you think about me.

    In fact, if you thought highly of me I’d be worried and schedule an appointment to see a shrink! 😀

    Reply this comment
  30. the Ted Steele System
    the Ted Steele System 26 May, 2012, 21:59

    good point— I would be crazy to think highly of you.

    Reply this comment
  31. Beelzebub
    Beelzebub 27 May, 2012, 07:32

    “good point— I would be crazy to think highly of you”

    You’re obsessed with me, chump. That’s why you always direct posts to me. From the start of our discussions on these boards – you were always the provoker – you always took the initiative to attack me for my viewpoints. Don’t forget that. And I brought it to your attention many times. So when people fire back at you man-up and accept it. Otherwise spend your days in a playpen with a pacifier stuck between your lips. This board is for adults. We talk about adult issues. If you can’t handle it without resorting to provoke others for their viewpoints that differ from yours – then leave.

    Reply this comment
  32. Ted Steele, Associate Prof.
    Ted Steele, Associate Prof. 27 May, 2012, 10:19

    hmmmm…lol…..you can’t not respond to my comments…..mmmmmmm….living in your empty head……..cozy

    I rarely attack you for your viewpoint…..to quote George Will ref to Donny Trump….you’re a bloviating ignoramus. I do call you out when you use obvious racial epithets about our nations’ President. Get used to it little man.

    Reply this comment
  33. Beelzebub
    Beelzebub 27 May, 2012, 10:56

    “I rarely attack you for your viewpoint…”

    BS. I have copied posts that prove you are a liar. You outright called me a ‘racist’ which is not only a lie – it’s slander.

    Keep it up, chump.

    Reply this comment
  34. Ted Steele, Associate Prof.
    Ted Steele, Associate Prof. 27 May, 2012, 11:35

    LOL– anytime you use phrases well known to many as racial slurs expect to be called out. Slander? Hmmmmm – you mean libel?

    Truth is a defense.
    Your good name tarnished Mr. Beezyboob? Is that your family name?

    Stop whining.

    Reply this comment
  35. Beelzebub
    Beelzebub 27 May, 2012, 13:46

    I bet when you go to the animal exhibit at the county fair even the swine complain when you try to pet them.

    Reply this comment
  36. Ted
    Ted 27 May, 2012, 17:27

    mmmmm……like a small child……mmmmmm

    Quick! Post now troll!!!!

    Reply this comment

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