California government to spend more than ever in new budget
The budget is the first drawn up since President Trump’s election and includes money for a few programs that Democrats said were a necessary response to political changes. Specifically, it includes $ 50 million to provide legal services to immigrants facing deportation.
But he’s silent about the biggest potential effect of Republican control of the White House and Congress – a major pullback in federal dollars for Medi-Cal, the state’s health care program for the poor. Brown and legislative leaders have said it would be premature to act as long as the fate of the Affordable Care Act remains unknown.
California’s plan for new fiscal year is balanced, in part, by continued strength in tax revenues. It is also based on a staggered start date for some of the spending requests made by the legislature.
$ 183.2 billion in public funds spent
California government spending will hit an all-time high in the budget starting July 1, up $ 12 billion in just one year.
Budgets are made up of three categories of expenditure for government dollars: general funds, special funds, and bond funds. In each of these cases, next year’s budget raises the bar.
The general fund, made up of most personal income and tax revenues, is the state’s main current account. It represents 68% of all spending in the new budget. Special funds are made up of a variety of fees and taxes divided into one-off operations, such as motor vehicle taxes and professional license fees. Bond funds are dollars borrowed, usually with voter approval, for projects such as flood protection, schools, and construction.
85 cents of every state dollar is spent in five budget categories
The state government spends money on hundreds of services and programs. But from a bird’s eye view, five budget priorities exceed all others in the new plan signed into law.
The top spending priorities will cost California taxpayers $ 156 billion:
- Health and social services: $ 60.2 billion, including Medi-Cal health coverage and social safety net programs.
- Kindergarten to Grade 12 public schools: $ 54.2 billion for Kindergarten to Grade 12, an average of about $ 11,000 per student, a large increase from a few years ago.
- Prisons: $ 13.7 billion for prisons and corrections, which includes operations in 35 state prisons.
- Higher education: $ 15.3 billion, including University of California, Cal State University, and community college operations.
- Transportation: $ 12.8 billion, financing operations including Caltrans, the Department of Motor Vehicles and the California Highway Patrol.
$ 8.5 billion ‘rainy days’ cash reserve enough to withstand a mild recession
In 2014, Californian voters tightened the rules for setting aside a portion of tax revenue. This amendment to the state’s Constitution automatically triggers the money set aside in the fiscal year beginning July 1 – a fund that by next summer will total $ 8.5 billion.
Most of that money comes from windfall investment income earned by California’s wealthiest taxpayers, the kind of profits that quickly disappear during an economic downturn. This volatility has been a major contributor to the boom and bust cycles of the state budget of the past.
Combined with a separate short-term cash reserve fund, the independent office of the legislative analyst noted on Thursday that the state has the largest cash reserve at any time in more than 35 years. Last fall, analysts predicted that the California budget had enough money saved to weather a mild recession over the next three years – without tax hikes or major program cuts.
More than 363,000 people now earn a salary from the state government
The size of the California state government workforce is not directly determined by an enacted budget, but the plan must provide money for their wages and retirement benefits.
So where are the 363,630 government jobs funded by this budget? Almost 42% of them are in higher education. The State Department of Corrections and Rehabilitation lags far behind with nearly 15.6% of the workforce.
Growth in the state government workforce has been weak in recent years. The State Department of Finance estimates that there are now about 9 government employees per 1,000 Californians – the same number as in 1970. (The highest in the past half-century, 10 workers per 1,000 Californians, was in 2010-11).
The state budget signed on Tuesday allocates $ 11.2 billion in payments to the California public employee retirement system – a combination of the regular payment and an additional $ 6 billion contribution – and $ 2.8 billion dollars to the California State Teachers’ Pension System.
10:20 p.m .: An earlier version of this article stated that the state operates 22 prisons. He operates 35.
Here’s how $ 183 billion in taxpayer dollars will be spent in California’s new budget
Almost $ 50 million from the new state budget will go to expand legal services for immigrants
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