1. California State Budget
SBAC, February 2010

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

3. Budget Facts
What’s the projected size of the budget gap between now and the end of ?

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

5. 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

6. 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%)

8. 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

9. 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

10. “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”

11. Problems California faces
How did we get here?

12. Causes of current shortfall

13. 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

14. Governor’s “solutions”?
NONE of them

15. 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”

16. 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

17. What are other solutions that YOU propose?