California's budget woes continue
Dear John,
Gov. Gavin Newsom released his 2023-24 state budget revision today with a projected $32 billion deficit. Now state legislators will have to grapple with how to address the shortfall. Senate leaders claim they can do so without cutting spending on state programs, but the reality is a fiscal reckoning is long overdue.
In just the last ten years, California’s General Fund budget has grown by 84 percent after adjusting for inflation and for population growth, according to CPC senior fellow Edward Ring.
Why is state spending increasing at such a staggering velocity?
For starters, state prison system costs rose 29 percent over the last 10 years, even though California’s prison population declined by 43 percent.
Per student spending from kindergarten to college has also spiked over the last decade: 97 percent at California's community colleges, 73 percent in the Cal State system, 38 percent for the UC system — and a whopping 53 percent in K-12 public schools.
The Golden State has also seen huge increases in spending by the Department of Social Services, and escalating costs for SNAP (Supplemental Nutrition Assistance Program) and OPEB (Other Post-Employment Benefits) — health benefits state employees receive during retirement.
And don’t forget the billions spent on California’s failed homeless policies.
CalMatters reports the state has spent over $20 billion on homelessness programs in just four years since 2018-19, but “during that time, the number of unhoused people in the state has increased by nearly a third.”
And, of course, no list of state budget ineptitude would be complete without the ultimate example of government waste — the state’s disastrous high-speed rail project. Each new cost estimate paints a worse picture than the last. Updated cost ranges include up to $33 billion for the Merced-to-Bakersfield segment and as much as $127.9 billion for the whole track from San Francisco to Anaheim.
California can’t even manage to produce basic financial reports. The state has spent $1 billion of your taxpayer dollars (and ten years of work) on a new financial system called Fi$Cal — the Financial Information System for California — to facilitate the production and release of the audited financial statements public entities are required to release each year. But a new state auditor’s report says even Newsom’s Fi$Cal fix needs fixing.
As policy analyst Marc Joffe explains, “California has now failed to complete its audited financial statements within the federally established nine-month deadline for the last five years in a row…No other state government has been so consistently late.”
As legislators begin to unpack Newsom’s revised budget, they ought to stop playing fiscal shell games and instead dig into where they can advance government accountability and transparency — and yes, program cuts.
Instead, taxpayers should expect this budget cycle to end with more of the same: excessive spending on grandiose proposals that do nothing to improve the standard of living in California.
Another thing that won’t change? The state's spending trajectory. Expect it to keep going up.
Read the full article by CPC Research Manager Sheridan Swanson.
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Radio Free California #276: It's Not about the Money
Cornered by his own reparations commission’s trillion-dollar demands, Gavin Newsom says he’d rather talk about anything else. Having failed to teach, Oakland’s striking teachers turn to calls for environmental justice. And, state officials warn of a coming California recession. All on this week's podcast with CPC president Will Swaim and CPC board member David Bahnsen. Listen now.
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California Reparations Plan Explained: The California Reparations Task Force voted to approve recommendations to be delivered to state lawmakers that range from repealing Prop 209 to paying billions to Black Californians. In February, CPC president Will Swaim joined California Insider for a fascinating, in-depth discussion on California’s reparations plan and the real history of Black Americans in the Golden State. Watch now.
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