Skip to comments.California's general fund spending has dropped -- but that doesn't tell the whole story
Posted on 08/18/2012 10:57:28 PM PDT by SmithL
Democrats say voters need look no further than California's $91 billion general fund budget to see how dramatically they have cut. That spending total is 11 percent below the state's pre-recession peak.
But the number can be misleading.
While California has cut education and services for the poor, budget writers also have relied on creative revenue streams and accounting maneuvers to move programs off the general fund books rather than cut them.
That has made comparisons difficult and, experts say, contributed to state bookkeeping disparities that have emerged in recent weeks.
"We've been through a period of extreme financial difficulty where each year's budget package has involved many complex changes," said Jason Sisney, a deputy at the nonpartisan Legislative Analyst's Office. "Frankly, it's so complex that it defies easy description. Not to say it's bad, but it's complex, and we've done a lot of it just because of the scale of problems we've had."
While the general fund has fallen 11 percent since 2007-08, California special fund spending grew more than 47 percent over the same period, from $26.7 billion to $39.4 billion this fiscal year.
If Brown's tax initiative passes, the state expects to set a record high for total budget spending at $142.4 billion, surpassing the $138 billion amount in 2007-08. That includes spending from bond funds, special funds and the general fund.
(Excerpt) Read more at sacbee.com ...
Who would want to invest in California bonds?
California sales tax revenue down 33.5% vs estimates
Compared to Budget
Total Revenues: -$475 million (-10.1%)
Income Tax: $12 million (0.4%)
Sales Tax: -$295 million (-33.5%)
Corporate Tax: $57.1 million (27.4%)
Compared to 2011
Total Revenues: -$468.8 million (-10%)
Income Tax: $156.2 million (5%)
Sales Tax: -$390.7 million (-40%)
Corporate Tax: -$26.4 million (-9.1%)
sales tax down 33%? That is enormous.
Let’s see, simple math.
If $91 billion reflects an 11% cut, then $91/.89 = $102.2 billion original general fund spending.
If off budget spending went from $26.7 billion to $39.4 billion then it increased $12.7 billion.
Current general fund spending of $91 billion plus the increase in off budget spending of $12.7 billion equals total comparative spending of $103.7 billion. Wow, that’s actually an increase in spending being sold to the public as a decrease! That’s also how Clinton made it appear he had a surplus!
Be careful in your comparisons as most governments include borrowed money as revenue when the show their financials!
They also counted upon huge taxes from the recipients of Facebook stock when it went public. Instead, the stock is worth bout 1/2 of the IPO opening day offering.
Those ‘taxes’ were counted into the last budget revenues that California passed in 2011-2012 budget.
The money just isn’t there.