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CA Budget - Why Are We Spending So Much More?

by: zeroh8

Mon Apr 27, 2009 at 16:58:50 PM PDT

The California Budget is a mess. That is bad news but the really bad news is that this mess is really complicated.  And then the Assembly wants us - the voters - to somehow make sense of things and make the hard decisions.

I tend to think that the problem with the California State Budget is spending.  But I haven't been able to find out exactly what all of this increased spending is going for.  So I worked up some numbers - based on the data from the Legislative Analyst's Office web site (they are reputable aren't they?) and put together the following information so I can understand it better.

zeroh8 :: CA Budget - Why Are We Spending So Much More?
I am not sure if you were here in California back in 1998.  I was - right here in Burbank - and I thought things were going pretty good back then.  I didn't get the feeling that the state government was in financial trouble. Things seemed to be moving along smoothly.  Back then, here is what the state was spending for me (and for every other Californian) out of the General Fund at that time:

California Government Department
1997-98 Per Capita Spending

Criminal Justice $158
General Government $132
Health $258
Higher Education $202
K-12 Education $648
Resources & Environmental Protection $25
Social Services $189
Transportation $7
Total $1,619

Next I checked to see how much they were spending for me in 2008:

California Government Department
2007-08 Per Capita Spending

Criminal Justice $343
General Government $146
Health $523
Higher Education $311
K-12 Education $1,047
Resources & Environmental Protection $52
Social Services $248
Transportation $37
Total $2,707

Then I calculated how much more the state government decided to spend for me in 2008 than they were spending for me back in 1998 (remember that is when I thought things were going just fine):

California Government Department
2007-08 less 1997-98 Per Capita Spending

Criminal Justice $185
General Government $14
Health $265
Higher Education $109
K-12 Education $399
Resources & Environmental Protection $27
Social Services $59
Transportation $30
Total $1,088

Wow, what a difference 10 years makes!  Maybe they needed $185 more for combating crime and building all those new prisons. It still sounds like a lot. I won't complain about spending $27 more for the environment.  And even the extra $30 for transportation might be okay. The $14 extra for general government is not worth fighting over either but I don't think they deserve any increase the way they are running things.

But did they really need to go spend another $265 for me on Health? I don't get the feeling that the health care system in California is all that much better than it used to be. How about the extra $109 for Higher Education? Did the universities and state colleges get 50% better when they got 50% more money in the past 10 years?  Are there 50% more students? Did the other schools (K-12) improve 60% when they decided to spend 60% more on them?  I know they didn't get a 60% increase in enrollment since the total population only increased 16.5%. They got $399 more to spend than they had back in 1998 from each Californian. Now I think education is important, but there needs to be a connection between spending more money and having better schools. We should have some amazing schools with that sort of money. Social services got $59 more.  I didn't see exactly where this went - it is just labeled as "Department of Social Services" in the detail I found. I like to think of California as being progressive, so that could be okay by me, but it does add up to an additional $4 Billion.

So in total, the people that run California decided to spend an additional $1,088 for me in 2008 than they spent for me in 1998.  Like I started out, I thought things were going pretty good back in 1998.  If the California government just spent for me today like they did back then, I would be happy.  And that would mean that the state would spend almost $42 billion less ($1,088 x 38 million Californians).  Hey, doesn't that number sound familiar?  Isn't that the original projected deficit?  Maybe it is just a freaky coincidence.

My numbers are in constant 2008 dollars, so I can't explain the extra spending on inflation.  The New America Foundation presentation on the same topic is impressive, but they base their analysis mostly as a percentage of Personal Income - which has undoubtedly grown in the past 10 years.  My point is that no matter how much we are earning, why should we be spending so much more?


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Dude (0.00 / 0)
health care costs have far outpaced the rate of inflation.  This has nothing to do with California, but the unsustainable health care system as a hole, forcing states and the government to fill in the gaps.

As for the rest, we're 47th per capita in overall education spending and we have the second-lowest state employees per capita in the United States.  The problem has nothing to do with spending.  Real per capita spending, which accounts for both inflation and population, has risen 2.2 percent in the past decade.

Don't make such fun with numbers.

Thanks for the link (0.00 / 0)

I will check out the link to the 2.2% increase.  It looks like their numbers are from the Legislative Analyist's Office which is the same source for my numbers so it will be interesting to see how they come up with such a different number.  I am not trying to make fun of the numbers, I am just trying to figure it all out.

[ Parent ]
Lots of wingnuttery to debunk here (0.00 / 0)
Whether you're passing it along unwittingly or wittingly, I'll let you explain.

Much of the "increase" in K-12 funds is illusory. When Arnold cut the VLF in 2003 that money had to be backfilled by the state. That backfilling is listed on the books as "spending" and so it appears as a huge "spending increase" when in fact it is no such thing. Schools didn't actually get more money. It's an accounting trick.

You also seem pretty ignorant of some rather fundamental changes that have happened to California over the last ten years. First, our population has grown. Second, our population has aged. Third, health care costs have soared across the board, far faster than inflation. All of that is reflected in the numbers above.

Most importantly, though, you argue a spending increase is somehow bad. How exactly is this so? I challenge you to explain to us why government spending is bad. Looks to me like this is little more than peddling right-wing talking points from the Howard Jarvis Association.

Ultimately this all shows why comparing numbers from 1998 and 2008 with no explanation or context whatsoever is an intellectually dishonest exercise in disinformation.

You can check out any time you like but you can never leave

Definitely not a wingnut here (0.00 / 0)

Thanks for your information about the K-12 spending.  One of the reasons I posted this information was to have others who know more about the big picture point this sort of thing out. If the VLF was funding education it may have been going directly to the local school districts and never hitting the state budget. It is important to look at the total picture and I will look into that further.

A government spending increase isn't necessarily a bad thing.  However continually spending more than you are bringing in as income is not the way to manage the budget. I don't like the fact that every year there is a budget crisis in California and I am just trying to figure it out.

My numbers only talk about the spending side of the equation. I should look further into the tax revenue side of things to see how the state's income looks over the same time period. I have seen where the sales tax increases may be necessary because of the way that more of the economy is going through non-tax services and through the internet.

Trust me, these are definitely not someone else's talking points, just my attempt to educate myself.  

[ Parent ]
First line is the most interesting (0.00 / 0)
To me, the increased spending on prisons--compared to the relatively static costs elsewhere--speaks volumes. The explanation of healthcare increases is consistent with what I've read elsewhere.

But our prisons are currently under court control because of inhumane conditions. How can we spend so much, with such poor results? Truly this seems an area ripe for some investigation.

I think this is a really useful discussion (0.00 / 0)
So I thank you for taking the time to get the numbers.

As is mentioned, health costs are increasing far greater than the official rate of inflation - like 10-20% per year. My health insurance cost doubled in 5 years, so the state is doing quite a bit better in holding down costs compared to me personally.

I am not certain how they are all calculated. I know, from trying to extract them, that the k-12 number comes out very differently if you include new school construction and their bonds, versus just the amount sent to schools for their ongoing operations. I believe it is also true that we have had a population increase of kids relative to adults. Regardless of how that is accounted, the best California has done for k-12 spending is to be in the middle of the pack, and if you count only money sent to schools for operations, we are between dead last and third to last. So, I don't think you can argue that we overfund k-12 education. For your "we should be getting better schools" - while I agree our kids need the best, there's a certain amount that's just required to keep them open. We barely spend that.

I didn't have a kid in school in 1998, so I can't make a direct comparison. I believe that since then there was an initiative to lower class sizes for k-3, which would be at some additional costs. I do know that the last two years have seen a sharp decline in our school budget, and that from the documents I've seen, in general school finance has gotten tighter, not more generous, in the last 10 years. Some of that may be going to inobvious costs, like for example the cost of teacher health insurance.

Schools (both university and k-12) are investments. They pay back in lower costs in other budget areas (prisons, social services) and in higher tax revenues.

Also note that in the 80's, our schools and universities were neglected infrastructure-wise, and that some spending has been needed to repair and replace buildings.

Are community colleges accounted with higher education or with k-12 in those numbers, or not at all?

Fry, don't be a hero! It's not covered by our health plan!

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