— John Seiler
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Walters:

One of Brown’s pitches has been that the budget would represent the lowest relative level of spending in decades, just over 5 percent of personal income. And other Democratic political figures echo that theme.

State Treasurer Bill Lockyer delivered a speech to the Sacramento Press Club last week in which, among other things, he repeated that figure and noted that former Gov. Ronald Reagan’s last budget (1974-75) was 6.02 percent of personal income.

Could it be that California’s budget is relatively lower now than during the Reagan era? Yes, if you take the very narrow definition that Brown and Lockyer are peddling. No, if you look at the broader picture.

According to a historic chart maintained by the state Department of Finance, Reagan’s last general fund budget ($8.3 billion) was, indeed, 6.02 percent of $139 billion in personal income at the time.

The 2012-13 general fund budget ($91.5 billion) that Brown and legislators have agreed to enact is 5.2 percent of today’s personal income, about $1.77 trillion.

So by those numbers, the Brown-Lockyer mantra is correct.

However, it’s comparing oranges and apples because the current budget shifts $6 billion-plus in spending from the general fund to a special fund to pay for Brown’s “realignment” of some services from the state to local governments. When special funds (which also include Caltrans, the Highway Patrol, the Department of Motor Vehicles and other large functions) are included, the picture changes.

With special funds, Reagan’s last budget totaled $10.3 billion or 7.4 percent of personal income while Brown’s 2012-13 budget, including realignment, etc., is $130 billion-plus. That’s 7.5 percent of personal income, slightly higher than Reagan’s number.

One of Brown’s pitches has been that the budget would represent the lowest relative level of spending in decades, just over 5 percent of personal income. And other Democratic political figures echo that theme.

State Treasurer Bill Lockyer delivered a speech to the Sacramento Press Club last week in which, among other things, he repeated that figure and noted that former Gov. Ronald Reagan’s last budget (1974-75) was 6.02 percent of personal income.

Could it be that California’s budget is relatively lower now than during the Reagan era? Yes, if you take the very narrow definition that Brown and Lockyer are peddling. No, if you look at the broader picture.

According to a historic chart maintained by the state Department of Finance, Reagan’s last general fund budget ($8.3 billion) was, indeed, 6.02 percent of $139 billion in personal income at the time.

The 2012-13 general fund budget ($91.5 billion) that Brown and legislators have agreed to enact is 5.2 percent of today’s personal income, about $1.77 trillion.

So by those numbers, the Brown-Lockyer mantra is correct.

However, it’s comparing oranges and apples because the current budget shifts $6 billion-plus in spending from the general fund to a special fund to pay for Brown’s “realignment” of some services from the state to local governments. When special funds (which also include Caltrans, the Highway Patrol, the Department of Motor Vehicles and other large functions) are included, the picture changes.

With special funds, Reagan’s last budget totaled $10.3 billion or 7.4 percent of personal income while Brown’s 2012-13 budget, including realignment, etc., is $130 billion-plus. That’s 7.5 percent of personal income, slightly higher than Reagan’s number.

Expanding the fiscal context even further, when about $5 billion in bond funds and $70 billion-plus in federal funds are included – as the actual budget legislation does – spending in the new budget totals well over $200 billion or close to 12 percent of personal income, which is about the national average of states.

Read more here:
http://www.sacbee.com/2012/06/27/4591431/dan-walters-is-californias-budget.html#mi_rss=Dan%20Walters#storylink=cpy

— John Seiler

Overspending isn’t California’s problem

Face it: More budget cuts won’t pay for everything the state needs.

SACRAMENTO — It’s budget time in Sacramento, so conservative politicians are dusting off an old shop-worn mantra.

All together: We don’t have a revenue problem, folks, we have a spending problem.

OK, there is some truth to that.

Sacramento, for example, still is spending way too much money on former Gov. Arnold Schwarzenegger’s showboating car tax cut.

Yes, that crowd-pleasing slash in the vehicle license fee — which had existed for many decades without a public fuss — resulted in a $6-billion annual spending burden on the state treasury. That’s because the car tax revenue had gone to local governments. When Schwarzenegger cut it in 2003, he kept sending an equivalent amount of money to the locals anyway.

Here’s another spending waste: Trying to execute murderers. I’m all in favor of executing these scum, if only we’d do it.

But we’ve executed a mere 13 in the last 34 years. Meanwhile, according to a major study last year, it costs an extra $184 million a year to house condemned killers on death row, compared to letting them rot in a hole without the possibility of parole. (There’ll be an initiative on the November ballot to end capital punishment in California.)

Here’s one more example: Paying off Schwarzenegger’s “economic recovery bonds.”

You may remember. He charmed the Legislature and voters in 2004 into borrowing $15 billion to balance that year’s budget. We’re still paying off those bonds — at double the sticker price, including interest.

In the new budget, that debt payment will amount to $1.3 billion.

But regardless of these nutty expenditures, it would be ludicrous to claim that spending is out of control in Sacramento. During the dot-com boom, yes. Now, hardly.

As a proportion of Californians’ personal income, total state spending will be only slightly higher in the new budget than it was during Ronald Reagan’s final year as governor in 1974. Spending out of the general fund — the state’s deficit-plagued main cash box — will be slightly lower than under Reagan.

Legislators and governors have been whacking away.

Compared with the economic peak of budget year 2007-08, current general fund spending is down 16%. True, the Legislature shuffled off some of the general fund burden to other funds. Even so, total state spending is down 2%.

Don’t think they’ve chopped enough? Then you probably don’t have a kid in public school.

State funding for K-12 schools and community colleges dropped 20% between 2008 and this year, according to the Finance Department.

Between 2008 and 2011, according to the legislative analyst, 32,000 teaching jobs were eliminated. Almost all districts reduced their school year; one-fifth of them by a full week.

Art, music, libraries, counseling, tutoring — all cut, if not eliminated.

Class sizes have increased in all grade levels.

And if Gov. Jerry Brown’s proposed tax increase is rejected by voters in November, K-12 schools and community colleges will be slashed $5.5 billion more. That would probably mean an even shorter school year.

Scare tactic? If you believe that, it’s a bad bet.

The University of California and Cal State University system also would be docked $250 million each if the tax initiative fails.

What has happened at California’s once-esteemed, formerly affordable public universities is shameful.

Tuitions over a five-year period rose 73% at UC; 84% at Cal State. Twenty years ago, they were $2,824 at UC; $1,308 at Cal State. Now students are looking at $12,192 and $5,970 respectively — if the taxes pass.

Over a four-year span, state funding was cut nearly $1 billion annually each at UC and Cal State.

OK, somebody should put a lid on excessive compensation for chancellors and presidents and other robed mucky-mucks. But they are not what’s breaking the universities.

Neither are state pensions busting the state, despite the brouhaha.

Yes, many local governments are straining under the weight of retirement burdens. But they’re not a significant cause of Sacramento’s red ink. Only 2.4% of the general fund will be spent on pension contributions for state employees. Even a 401(k) plan could cost that much.

Want more spending cuts? How about parks?

Good luck trying to find a camping spot at your favorite state park this summer. It’s still not clear how many are going to be shuttered for lack of state funds and how many will be rescued by nonprofits and local people. At any rate, many have been allowed to deteriorate.

But no group has been pounded more than welfare moms and their sick kids, and the low-income aged, blind and disabled.

One example: The maximum monthly welfare grant for a family of three is $638. Back 23 years ago when Republican George Deukmejian was governor, it was $694. But only about 25% currently receive the maximum grant.

SSI/SSP — the federal and state subsistence programs for the aged and disabled — has been reduced to the absolute federal minimum. Grants now are around $860 per month. Whenever the feds sent out an increase in recent years, the state tended to pocket it.

Medi-Cal payments for the care of poor people are the lowest in the nation. Rates are so low that many doctors won’t even treat the poor. Dental and vision care for adults were eliminated in earlier budget cutting.

Sacramento doesn’t have a spending problem. Its problem is an outdated, roller-coaster tax system that doesn’t generate enough revenue to pay for what California demands and deserves.