New Sacramento Math
What can be said about the Governor's proposed state budget for 2008-2009? What has been widely reported is the effort of his administration to impose "across the board" cuts of ten percent to all government agencies. It is clear when you actually look at each department in the budget that this is not necessarily the case. Many agencies are not subjected to the reduction, and the ten percent in many cases is based on their 2007-2008 expected expenditures, which actually result in a net increase in expenditures for the new budget year.
As demonstrated in Chart 1 below, the actual change in General Fund expenditures from Current Year (2007-08) to Budget Year (2008-09) is a reduction of only 2.3 percent and some state agencies actually experienced a net increase. It should also be noted that the 2007-08 proposed expenditures of $103.4 billion are in fact $1.1 billion higher than the $102.3 billion level approved in the 2007-08 Budget Act. So, the Current Year spending "reduction" is actually an increase of $1.1 billion.
Furthermore, (see Chart 2) looking back over the past five
years it is clear that even if the Governor's proposed budget-balancing
reductions are approved, total state General Fund expenditures will have
increased by nearly $25 billion (over 32%). It is difficult to
understand how a five-year spending increase of nearly $25 billion has been
decried as "draconian" spending cuts. This must be some
new kind of "Sacramento math."
| Spending Increases by Agency | ||||
| Current Year vs. Proposed Budget | ||||
| (Dollars in millions) | ||||
| Revised 2007-08 to 2008-09 |
||||
| AGENCY | 2007-08 | 2008-09 | Change | % Change |
| Legislative, Judicial, Executive | $3,914 | $3,787 | -$127 | -3.2% |
| State and Consumer Services | $597 | $608 | $11 | .8% |
| Business, Transportation & Housing | $1,526 | $1,679 | $153 | 10.0% |
| Resources | $1,804 | $1,657 | -$147 | -8.1% |
| Environmental Protection | $91 | $86 | -$5 | -5.5% |
| Health and Human Services | $29,577 | $29,298 | -$279 | -0.9% |
| Corrections and Rehabilitation | $10,096 | $10,268 | $172 | .7% |
| K-12 Education | $42,045 | $39,411 | -$2,634 | -6.3% |
| Higher Education | $11,803 | $11,699 | -$104 | -0.9% |
| Labor and Workforce Development | $104 | $98 | -$6 | -5.8% |
| General Government | $1,816 | $2,407 | $591 | 32.5% |
| TOTALS | $103,373 | $100,998 | -$2,375 | -2.3% |
| Spending Increases by Agency | ||||
| Over the Past Five Years | ||||
| (Dollars in millions) | ||||
| 2003-04 to 2008-09 | ||||
| AGENCY | 2003-04 | 2008-09 | Change | % Change |
| Legislative, Judicial, Executive | $2,544 | $3,787 | $1,243 | 48.9% |
| State and Consumer Services | $462 | $608 | $146 | 31.6% |
| Business, Transportation & Housing | $499 | $1,679 | $1,180 | 236.5% |
| Resources | $950 | $1,657 | $707 | .4% |
| Environmental Protection | $81 | $86 | 5 | 6.2% |
| Health and Human Services | $22,762 | $298 | $6,536 | 28.7% |
| Corrections and Rehabilitation | $5,389 | $10,268 | $4,879 | 90.5% |
| K-12 Education | $32,457 | $39,411 | $6,954 | 21.4% |
| Higher Education | $8,780 | $11,699 | $2,919 | 33.2% |
| Labor and Workforce Development | $113 | $98 | -$15 | -13.3% |
| General Government | $2,290 | $2,407 | $117 | 5.1% |
| TOTALS | $76,327 | $100,998 | $24,671 | 32.3% |
As is the custom, the legislative budget committees will now begin examining the proposed budget for the next fiscal year. We have also been called into a new special session to consider current year reductions. Given a possible deficit of over $14 billion, current year reductions are a necessary element of the solution. I will keep you up to date on developments as they progress this year.
