As one of California’s denizens who also has school-aged children, I was quite interested to learn about a site called Next10, through Lazy Man’s post called “Can You Fix California’s Budget”? Next10 asks you questions about how you stand on certain issues that have an impact on the California budget, and based on your responses, comes up with a new, proposed budget. Their questionnaire is aimed to determine how you’d prioritize issues for the sake of resolving the budget crisis.
The California Budget Crisis: How Do We Close The Budget Gap?
Here’s a sampling of the issues which received the most responses:
- 40.7% of respondents want to reduce spending for K-12 pupils in California. The consequence here is that spending will fall below 28% the national average. Unfortunately, schools are already hurting with many resources and programs being cut each year, and are relying more and more on volunteers and fundraising to cover gaps in services.
- 52.5% want to reduce Medi-Cal eligibility for undocumented and new immigrants and are open to eliminating some health care programs for low income people.
- 40.8% want big reductions in human services programs (is this what is called welfare?). This will of course, affect the aged, disabled and poor children and families.
- 50% (including Lazy Man, by his own admission) are willing to release less dangerous inmates and those who end up violating parole.
- 55.4% want to keep unemployment and training benefits as they are.
- 48.3% want income taxes to be raised for the wealthy. There’s a recommendation here for reinstating higher tax brackets for those earning $300,000 a year and above.
- 53.3% want to increase the corporation tax rate. With taxes growing more slowly than corporate profits, increasing taxes in this case makes sense to me.
- 42.8% are for limiting tax breaks.
Let’s cap this with an image of the California Budget projections over the coming years (numbers are in billions). Click the image for a larger picture:
It’s going to be interesting to see how this budget situation will be addressed. Our family will be feeling the effects of this crisis for years to come, with fewer services in our schools. We’ve already experienced some of the fallout firsthand; for instance, just this past school year, our public school lost its principal when she unexpectedly retired (rumored to be because of financial reasons). On top of this, my child’s class ended up with a substitute teacher for most of the year. To add insult to injury, how about this: our school district happened to be invested in Lehman stock last year, and was part of an investment pool that lost a reported $150 million after the Lehman bankruptcy!
For more of my thoughts on this, check out the article: Coping With The Recession In Silicon Valley.
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{ 11 comments… read them below or add one }
SVB
Guess when you have to “spend less than you earn” when you are earning less, it becomes really tough. It’s easy to figure it out between a couple than with the number of legislators you folks have on the west coast. And your kids are not unionized, which makes things easier when you have to cut on their say “piano lessons”. Try that with the LAPD or fire department!
I’m more intrigued by the loss and investment of your kids “school trust” in Lehman! Our church went through a similar thing with another mini Madoff like “ponzi scheme”! Unlike a church where you can ask the congregation to “step up”, it is a shame that this whole mess has affected our education system and your child. Maybe a better way is not to have a totally free education system, but a heavily subsidized one where you have to pay say $15 a month for each kid you have in school. This way, when the world falls apart, at least there is still some steady revenue. Food for thought?
Oh if we ran our homes like this! If we spend more than we make someone will come and start taking things away.
My suggestion would be to have California start printing counterfeit US money. With all the tech companies out there, they could easily find the expertise to do it. Run the Cali-Mint for a few months, and they’d have enough money to pay off the debt.
I’m surprised that folks have overlooked this solution.
There are a bunch of draconian “options” not considered by that budget widget. One would be to do a hard reset of state pensions, particularly for lavishly paid local officials (who are part of state expenses due to the odd arrangement of state and local finances in CA). There are large numbers of people on local pension rolls making over $200K/year, starting in their 50s, with full medical. (The top paid guy is a local official in a small CA town who pumped his pension close to $500K/year!)
The net-present-value of these pension plans, when reckoned as annuities, are worth many millions each.
I’ll believe in “sacrifice” when I see it from the State’s political class. Until then, I’ll vote against every tax increase and encourage everyone to do the same.
If balancing the budget means cutting on education costs and laying off teachers, then I would rather gladly pay just slightly more. This is a very touchy subject. I would opt for more efficient government spending, a more efficient bureaucracy, less luxuries for our politicians, but that’s not really going to happen.
I agree completely with Foobarista.
We should stop government pensions, especially for elected officials.
Taxpayers no longer get pensions and neither should government officials.
They should be given a 401k plan with contribution matching.
Why was a public school investing in stock? Was that a pension plan or something?
Due to the recent economic crisis people have realized the importance of budgeting. The crisis stemmed from the fact that people where borrowing too much, spending too much, and not saving enough.
Quoting The Governator
“Our wallet is empty. Our bank is closed. And our credit is dried up.”
California’s 38 million people and GDP of $1.8 trillion is the largest in the US. Its economy is bigger than those of Russia, Brazil, Canada, or India.
How could it be allowed to slip so far and so fast?
Why doesn’t the state cut state legislature salaries, they get paid ridiculous amounts already and look how they have gone and screwed up our state economy. That would save so much money right there. It really makes me angry that they won’t take any responsibility and instead want to tax the general public more for the mistakes they have made. What is your opinion of the California deficit. What do you think should be done?
One of the biggest problems with the over spending in CA is with the illegal immigrants. It affects the hospitals, education, welfare, and prisons. Women labor in the parking lots of the hospitals and come in at the last minute to deliver and have a US citizen. Write that bill off to the taxpayers. The kids go to public schools with the class sizes getting huge. Classes are taught in both English and Spanish, taking twice as long to get 1/2 of the material. No wonder CA in the botton 4 of the states. These people are signed up under welfare further soaking the taxpayers. Look at the 10 most wanted in the large cities in CA and you will see at least 9/10 of them are immigrants. Good for them escaping the law, but their friends/gangs are mostly in the prisons.
Let INS do their job (they are not allowed to) and CA might be in the black again.
The politicians don’t have a backbone to gather them up and throw them out.