California State Budget 2010-11 SBAC, February 2010

Overview Budget facts Problems California faces Governor’s “solutions” …and their problems Alternate solutions

Budget Facts What’s the projected size of the budget gap between now and the end of 2010-11?

Budget Facts Gap = $ 18.9 billion ($19.9 with reserve) = Projected revenues + prior year balance (negative this year) – expenditures – reserve

Put in the following in order of General Fund spending: Budget Facts Put in the following in order of General Fund spending: K-12 Education Higher Education Corrections Health and Human Services

Budget Facts General Fund spending: K-12 Education = $36 B (43%) Health and Human services= $21 B (25%) Higher Education = $12 B (14%) Corrections =$8 B (10%)

Budget Facts What your fellow Californians think: 49% of adults (48% of likely voters): Corrections accounts for the most spending 37% of adults (40% of likely voters): Solve budget problems using mostly cuts

Budget Facts What your fellow Californians think: 58% of adults (61% of likely voters): Protect K-12 education from cuts 60% of adults (59% of likely voters) : State could cut spending and still provide the same level of services

“Budget reform should take place at the ballot” Budget Facts What your fellow Californians think: 72% of adults (69% of likely voters): “Budget reform should take place at the ballot”

Problems California faces How did we get here?

Causes of current shortfall

Governor’s “solutions”? What new taxes did the Governor put forth in his January Budget Proposal? Oil Severance Tax Alcohol Excise Tax Increase the top PIT brackets Apply sales tax to some services

Governor’s “solutions”? NONE of them

Governor’s “solutions”? $8.5 B in cuts $6.9 B in federal funds…or cuts and reduction/elimination of certain tax credits $4.5 B in “fund shifts”

Governor’s solutions? Cuts to employee compensation (5-5-5) More cuts to health and human services (MediCal, Healthy Families, IHSS, CalWORKS, etc.) Cuts to corrections $1.2 B from receiver and from sentencing changes “Trigger” cuts Eliminate CalWORKS, Healthy Families’s children benefits, and MediCal optional benefits; and take another 5% from state workers and MORE

What are other solutions that YOU propose?