In most ways, what happened at the polls yesterday (or perhaps what did not happen as most people did not vote) is only symbolic in terms of the bigger scheme. The voters were asked in a way to codify an imperfect and in the end insufficient budget deal from February to balance the budget shifting, borrowing, repaying, and eventually capping future spending.
The voters rejected such overtures and probably Assembly Majority Leader Albert Torrico hit the nail on the head when he said last night:
I am certain in the coming days we will analyze the exit polls that will provide us with less information than usual since a possible record low turnout was expected. The official totals are not available just yet, but it was reported the turnout for instance in Sacramento County was around 17 percent.
What I suspect the polling will show though is a number of different reasons for the results. The left largely rejected these measures because they bit into vital programs and did not solve the overall deficit. Prop 1A was a convoluted layering of four separate initiatives that had something for everyone to vote against–and they did. The right voted against what they perceived as tax increases in Prop 1A and I’m not sure the objections to the rest, but it seemed to be portrayed as a tax increase from the start which doomed it from the right’s perspective.
As I said on Friday though, if the numbers were such that the $6 billion in budget savings would have substantially closed the budget, then I would have held my nose and voted for them. Reducing the deficit from $21 billion to $15 billion at best was just not worth it.
The Governor is likely to use this as a misguided and probably wrongheaded mandate to slash the budget.
The governor has threatened to make up for the lost revenues by cutting an additional $2.3 billion from elementary and high schools and community colleges; borrowing $2 billion from cities and counties; transferring some state prison inmates to county jails and some illegal immigrant prisoners to federal custody, and slicing deeper into health, social services and other programs.
More importantly as the Capitol Weekly opines, this may mark the end of another Schwarzenegger era.
“It may mark the end of Gov. Arnold Schwarzenegger as a compromising moderate willing to talk tough, but ultimately postpone the state’s hardest budget decisions… It remains to be seen what type of political phoenix emerges from the ashes of the governor’s latest initiative defeat. Schwarzenegger has been known to reinvent himself after ballot box losses before.”
Schwarzenegger strategist Adam Mendelsohn:
“In some instances, a loss is as much a mandate as a win, It’s clear that he carries a mandate to cut the California budget down to the bone.”
However, Governor Arnold would be wrong to take that from these results. First, the progressive left joined the right to vote against this. Second, the election really wouldn’t have changed much had it passed and it does not really change the reality having failed. $15.4 versus $21.3 billion just isn’t that much of a difference.
The Sky Is Falling
The election was insufficient to prevent the sky from falling anyway, but the sky is falling today over California. We have survived longer than perhaps we should have with some tricks, borrowing, shuffling of monies, etc. That all stops now.
As Dean Florez, Senate Majority Leader told me now a month ago, this is an all-cuts budget. The Governor you know believes that, he said as much last week.
We have already cut $9.3 billion from education. The Governor is immediately threatening two more billion. And to close the rest of the deficit you can safely assume another three to five billion. The sky is falling on education in California. People want to argue that we were not doing a good job of educating our youth in this staff at the place we were at when we were somewhere like 25th in per pupil spending–do you honestly believe we will be better when we cut $15 billion??? If you do, you need a lesson in reality.
We are going to cut money from health coverage for the poor.
We are going to cut money that goes to things like First Five and other early childhood interventions.
We are going to cut money that goes to programs for at-risk youths.
We are going to cut jobs across the state.
Students are going to pay more to go to colleges and as a result some won’t be able to go. In addition we are accepting fewer students.
Teachers will be laid off.
Prisoners will be released early.
The sky is falling. The only question now is how bad it will get. Whether it will plunge the state of California into depression. And whether the state of California will take the rest of the country down with it.
The Governor has already threatened to take $2 billion that is supposed to go to local governments in terms of property tax revenue provided through 2004’s Prop 1A. That means that you are going to see a higher deficit locally and more cuts there.
Yesterday the Yolo County Board of Supervisors voted by a 3-2 vote with Provenza and Chamberlain dissenting to stop county medical coverage for illegal immigrants. The total savings from the medical cuts is somewhere around $1.5 million but that goes beyond the bit that goes to help illegal immigrants. That means increased pressure on the emergency rooms and we will likely see higher costs down the line. In addition this sets us up for a major health outbreak should something more serious than the Swine Flu emerge, whole segments of the population may transmit disease without knowing.
Frankly this is the tip of the iceberg. It is going to get ugly.
I urge people to get involved, now is when the public is needed the most. It starts at the local level. Tonight we are having a townhall meeting. I urge people to attend. It is from 7 to 9 pm at the Veteran’s Memorial Center on 14th Street in Davis. We will discuss Davis’ budget problems. These are budget cuts that will affect people in a very personal way.
Unfortunately the picture regardless of last night’s outcome was bleak and it will likely get worse in the coming weeks and months. Now is the time for people to engage.
—David M. Greenwald reporting
M1 – Cut legislative pay by 20%
M2 – Legalize Marijuana
M3 – Free all the prisoners on minor drug offenses
M4 – Privatize services starting with the prison system
M5 – Eliminate defined benefit pension plans for all new state and local employees
http://globaleconomicanalysis.blogspot.com/2009/05/hooray-for-california-propositions-1a.html
M1 – Cut legislative pay by 20%> pennies
M2 – Legalize Marijuana> problem is that this is a federal issue
M3 – Free all the prisoners on minor drug offenses> agree
M4 – Privatize services starting with the prison system> infeasible and will probably create worse problems down the line
M5 – Eliminate defined benefit pension plans for all new state and local employees> infeasible and probably not legal.
This is from the LAT Michael Finnegan:
“By rejecting five budget measures, Californians also brought into stark relief the fact that they, too, share blame for the political dysfunction that has brought California to the brink of insolvency.
“Nearly a century after the Progressive-era birth of the state’s ballot-measure system, it is clear that voters’ fickle commands, one proposition at a time, are a top contributor to paralysis in Sacramento. And that, in turn, has helped cripple the capacity of the governor and Legislature to provide effective leadership to a state of more than 38 million people.”
“M4 – Privatize services starting with the prison system”
I don’t like what I have heard about the Bush administration privatizing significant parts of the Iraqi operation — paying independent contractors significantly more than military personnel, Blackwater. Seems like it would have been cheaper and less troublesome not to have privatized.
Along the same line, I can only imagine what would have happened had we privatized Social Security along the lines proposed just a few years ago going to 401Ks. Talk about a disaster of epic proportions.
I’m all for cutting back on plum retirement packages, but we have to reasonable about it.
The Governor is likely to use this as a misguided and probably wrongheaded mandate to slash the budget.
David, it really sounds like you expect Schwarzenegger to fit a square peg in a round hole. Where do you want him to find the money to not slash the budget?
You shouldn’t think that I want to see the budget slashed, because I don’t particularly. I just don’t see what choice he has.
Ahhh…. I wake up and read the paper and get a huge smile on my face. Its a great day in California! So perhaps now we can finally get around to having the idiots in Sacramento declare bankruptcy, cancel all of the ridiculous union inspired state labor agreements and start over.
Every single day, the news gets better and better. Eventually, the giveaway artists in Sacramento will have to stop shoveling money to their union buddies and either quit or do whats right.
State worker unions are what bankrupted the state of California.
Greg:
I think you raise a fair point here. I’ve run through the budget a few times and I’m not sure where we are going to find the money TO slash the budget enough to close the deficit. I say that because there are several problems:
First, there are propositions that require monies to be spent–and can only be changed by a vote of the voters like yesterdays– that limits how much we can cut
Second, there are monies that if we cut we lose stimulus and other federal funding so it’s self-defeating
Third, when we do slash programs and spending, we are cutting jobs for the most part which means that we lose money in unemployment benefits, we push the economy down, it will cut into tax revenues, so what appears to be cuts may not end up cuts
Fourth, we cut money to preventative and investment programs not only will we harm the economy, we also probably lose money in the long run.
It costs about $10K per pupil to educate but five to six times that much to incarcerate. So in the long term, cutting the budget is a bad proposition for us.
The bottom line here is that we are in a world of hurt and there is not a clear way out.
Services are going to be cut whether we like it or not. So where do we make the cuts? If we can’t cut education, we can’t cut for insurance to illegal immigrants, where do the cuts go?
I’m pleased with the passage of 1F.
“Fourth, we cut money to preventative and investment programs not only will we harm the economy, we also probably lose money in the long run.”
For the moment, the long run is not the question. The state obviously has a crisis in the short run. You have said that the Governor will read the vote as a “misguided” and “wrongheaded” mandate to slash the budget. But it sounds like you would slash the budget too if you were the governor, simply because you would have no choice.
Likewise the other day you said that UCOP (and by association, Katehi) had the students’ blood on its hands for raising fees. You also said that the state shouldn’t balance the budget on the backs of its workers. But if you had Yudof’s job, what choice would you have other than to do both?
[quote]The Governor is likely to use this as a misguided and probably wrongheaded mandate to slash the budget.[/quote]What power does the governor have to slash the budget on his own? [quote]The governor has threatened to make up for the lost revenues by cutting an additional $2.3 billion from elementary and high schools and community colleges; borrowing $2 billion from cities and counties; transferring some state prison inmates to county jails and some illegal immigrant prisoners to federal custody, and slicing deeper into health, social services and other programs.[/quote]He can do that without legislative approval?[quote]Schwarzenegger strategist Adam Mendelsohn: “In some instances, a loss is as much a mandate as a win, It’s clear that he carries a mandate to cut the California budget down to the bone.” [/quote]It’s not news that deep cuts will have to be made. That’s the result of the declining state revenues (since last year), not the result of yesterday’s election.[quote]However, Governor Arnold would be wrong to take that from these results. First, the progressive left joined the right to vote against this.[/quote]What ideas is the progressive left pushing? Are you thinking of our progressive left member of the assembly, who is going to bat for the special interests (fire fighters) who financed her campaign? [quote]We have already cut $9.3 billion from education. … The sky is falling on education in California. [/quote] Fair enough. However, go back 10 years. Consider in 1999 dollars how much we were spending on education, then. Then consider how much we will spend in 2009 (in constant dollars). My guess is we will be spending more and more per pupil. So was life so terrible in 1999? No, it wasn’t. The crisis of 2009 — not just in education but in virtually every program the state spends money on — is that its increases over the last decade have been well beyond a sustainable rate of inflation. And then when we get a downturn, the cuts look brutal (and they are painful). If instead, as 1A would have done, we budgeted more sensibly year to year, not inflating our budgets beyond a sustainable amount, we wouldn’t have put ourselves in this position. [quote] People want to argue that we were not doing a good job of educating our youth in this staff at the place we were at when we were somewhere like 25th in per pupil spending–do you honestly believe we will be better when we cut $15 billion??? [/quote] This is the crazy logic of the Davis City Council budgeting process. See what other cities are blowing money on and match or exceed their largesse. It doesn’t matter where California ranks among the 50 states. There are many states which spend much less than we do and get better results. What matters, fiscally, is that we keep our growth of spending on education and other programs within our means. Educationally, it also matters a lot that we get the most bang for our buck with each dollar spent. When we have a convoluted financing system — as we do with categoricals — too much of the money in California education is spent on administering these programs, not putting the money in the classroom. [quote]The Governor has already threatened to take $2 billion that is supposed to go to local governments in terms of property tax revenue provided through 2004’s Prop 1A. That means that you are going to see a higher deficit locally and more cuts there.[/quote]This is one reason we should have approved props 1D and 1E. First 5 and the dedicated mental health programs would have lost from them. But by rejecting those props, the state will essentially steal the same monies from counties (and cities), so that other, perhaps more important programs at the local level will be wiped out entirely, while the dedicated programs have even more money than they know how to spend.
Cut, cut, cut. It’s long overdue.
The sky won’t be falling, it will (at worst) be resetting to where it had been a decade or two ago. I see nothing wrong with that.
Classroom sizes increasing, and teachers being laid off? Despite being the parent of two… frankly, I don’t mind. Education budgets soared after ’96 in California in order to reduce classroom size, but little improvement in achievement was seen. I consider smaller classrooms *a luxury*. Going back to the classroom sizes that you and I had as children simply doesn’t equate to an apocalyptic event.
So, cut, cut, CUT! I agree with the interpretation that these results are a mandate for the governor to cut to the bone.
Also, I don’t think the governor wants to make cuts. Noone wants to do that. But there is little choice. The problems can’t be put off anymore. Also, I’d like to reiterate rich’s point: this isn’t simply about the governor. The legislature has to take responsibility for CA’s financial situation and whether cuts are going to happen. For that matter, the state was dragged into debt by passing all of those bond initiatives, which included many multi-billion dollar education bonds. We passed them, getting a lot of short term spending on education, but that just punished us in the long run because education cuts are going to have to be made to pay off the debt we have accumulated through those bonds. I’m sorry but you can’t borrow and spend your way out of problems. Eventually the whole scheme collapses on itself.
Rich,
I couldn’t agree more. The idea that we’re in some sort of nightmare scenario because we’re “25th in national spending” is bizarre.
This isn’t the kind of competition any responsible parent, school, district, or government should be engaged in. If we all aspire to being better than our peers, then it’s no more than a numeric arms race (with little real-world implication) that ends up right where we are: on the verge of bankruptcy.
Can you imagine doing the same on the scale of an individual family? Look around the block, and make sure you’re spending the most money on after-school tutoring for your children… if not, put more money into it! is that really sane?
Martin: [quote]M1 – Cut legislative pay by 20%
M2 – Legalize Marijuana
M3 – Free all the prisoners on minor drug offenses
M4 – Privatize services starting with the prison system
M5 – Eliminate defined benefit pension plans for all new state and local employees [/quote]M1 — Legislative pay may be too high. It’s by far the highest of any state. However, that won’t solve any problems. It’s a very small portion of the state budget. I would guess, also, that for every dollar in salary and and per diems and benefits we pay Mariko Yamada, for example, her office costs us 10 dollars. (That is, the cost of travel, computers, repairs, rent, supplies & equipment, gas and electric, staff salaries + benefits and satellite offices add up to maybe 10 times what we expend on our assembly member.) So if you want to save money in this area, then cut by 20% the amount budgeted not for member’s salaries and benefits but the amount budgeted for all expenses accrued by all members.
M3 – This has already been done.
M4 – If it would take away power from the prison guards’ union, then this makes sense. However, it’s worth noting that private companies which provide public services tend to build up political capital over time. That is, they pay off legislators with campaign contributions and before long, those so-called private companies end up costing the taxpayers even more than public enterprises do. Think of how defense contractors make money with massive overcharges and building weapons’ systems we don’t need. It’s not as if those “private” companies have anything in common with free enterprise.
M5 — there is a ballot measure ([url]http://www.reason.org/news/show/1006943.html[/url]) in the works to reform the pension system in the state. It’s obviously in great need of reform. However, I would not count on the majority of California voters saying yes to a change. It seems like the only initiatives which pass are those in which a majority thinks it is getting a benefit from the program and someone else will be paying the bill. Hence, we pass multi-billion bond measures (e.g., high speed rail) with no tax increases to pay for them. We pass taxes on cigarettes and the very rich to pay for health and welfare programs, because we don’t smoke and aren’t rich, so we don’t mind those taxes being raised. … We tend to vote down reform measures, because the affected special interests will mount overwhelming campaigns against them, making it seem as if the voters have nothing to gain and everything to lose by reform. (Also, these reforms often throw in too many ancillary ideas, making them hard to understand and not obviously necessary.)
“Classroom sizes increasing, and teachers being laid off? Despite being the parent of two… frankly, I don’t mind. Education budgets soared after ’96 in California in order to reduce classroom size, but little improvement in achievement was seen. I consider smaller classrooms *a luxury*. Going back to the classroom sizes that you and I had as children simply doesn’t equate to an apocalyptic event.”
What would you see as significant improvement in achievement over the past 13 years of small class sizes? Davis students have made improvements on standardized tests during that time. I guess this will be an experiment we will run on our children to see if standardized test scores improve or not.
The legislature has to take responsibility for CA’s financial situation and whether cuts are going to happen.
This comment stands on one of the basic fictions of California politics. Yes, the legislature “has to” take responsibility for the state budget, but it almost can’t, because it needs a 2/3 supermajority to pass one. A supermajority rule may seem like a method to make the legislature accountable, but it actually does the opposite, it weakens responsibility. If you are a state legislator and you don’t take financial responsibility, your vote counts twice as much as if you do.
It’s interesting that no type of state proposition in California is bound to a supermajority. The state legislature is bound to a supermajority, and so are city property taxes after Prop 13; but not state propositions. As written, the state constitution takes responsibility away from politicians and gives it to the voters. Yesterday the voters used their responsibility to blame politicians.
So yes, someone “has to” take responsibility for the state budget, but not necessarily the state legislature. Eventually, that someone will be the bond market, or the federal government. I don’t really blame the voters either, because they have their own jobs, they don’t have time to study the state budget. The populist budget rules are simply California’s bad luck.
“However, go back 10 years. Consider in 1999 dollars how much we were spending on education, then.”
This comment stands on another basic fiction of the state budget, which is that the budget has somehow grown beyond the bounds of the state economy. I do not know about education specifically, but the budget as a whole has stayed at a constant fraction of the economy since before 1999. Given what has happened to the prison system, education might well have been trimmed back slightly, as a fraction of state GDP.
Most of the increase in the state budget is due to inflation, and some fraction is due to population expansion. All of the rest is due to the fact that the state is a little wealthier, per person, than it was in 1999. Do you want California to be an employer who ignores prevailing wages, and only marks salary to inflation? “We don’t care how much you could get paid at some other job; we set our pay scale based on inflation and that’s it.” What you would get is civil employees who hold even on some absolute scale, but whose salaries slowly slide down the skill ladder.
I wouldn’t be surprised if some types of state salaries already fit that description. Accept a pay cut for the privilege of working in the California public sector, and don’t complain because your salary has been adjusted for inflation since 1999.
Greg: Very good comments, glad to see you posting here. I just came from the Speaker and Pro Tem’s press conference, they seem to get it. The voters they said want the legislators to fix it. And as Steinberg said, paraphrasing, I’m a liberal, but I think raising taxes at this point would be a mistake.
The debate now is over what to cut. I bring in Bobby Lee and Davis Parent to address a couple of key points here.
First, Bobby, education along with health care are obvious targets since they are two of the bigger pots of money, but I think it is a mistake not to look at corrections. I think there are areas of sentencing, parole, and other issues that have been screaming for reform for quite sometime and if we do the cuts in the right way we can reform and save money.
To Davis Parent, “The idea that we’re in some sort of nightmare scenario because we’re “25th in national spending” is bizarre.”
I think you’re missing a point here, we were 25th in per pupil spending BEFORE we cut $15 billion from the budget. I would have to do the math that I don’t have time to do right now, but I’m going to guess that pushes us into the 35th to 40th range. Those figures don’t take into account cost of living, so if we adjusted it, well you can figure out where I’m going with this.
You consider smaller classrooms a luxury? Are you aware that in numerous studies, performance is pretty strongly linked to class size? As a parent in Davis, I suspect you’re probably right that your kids will be relatively okay, but for the at risk kids in the failing schools in the cities, this is their life and more importantly this is our future. You’re basically condemning some of these kids to a really bad life. And if you want to say many will end up there anyway, you’d be right, but this is going to make much worse.
I’ll stop there for now.
A few months ago, the Sac Bee published a comparison on how California spends money in comparison to other states. We were #1 in what we pay to keep prisoners in cages, #1 in what we pay welfare recepients, and #47 on what we spend on our kids for schooling. So what are we going to cut? You guessed it–schools. I’m old,and my kids are out of school, but I am sorry for the futue of the state.
“I think you’re missing a point here, we were 25th in per pupil spending BEFORE we cut $15 billion from the budget. I would have to do the math that I don’t have time to do right now, but I’m going to guess that pushes us into the 35th to 40th range. Those figures don’t take into account cost of living, so if we adjusted it, well you can figure out where I’m going with this.”
In a link I posted on another thread, California was 30th in 2006. 2007 numbers might be available, but probably not 2008 at this point.
Context is also important. Ten+ years ago Calfornia was much lower in state funding. It has been slowly climbing up and peaking only recently. You can’t see the full benefits of higher level funding unless you can sustain it for several years, a decade or longer. In other words, we may never know how good things could have been at a higher funding level, because now we are sliding down.
DJUSD looks like an exceptional district among California school districts. In many other states, however, it is only average.
[quote]It’s interesting that no type of state proposition in California is bound to a supermajority. The state legislature is bound to a supermajority, and so are city property taxes after Prop 13; but not state propositions.[/quote]A simple majority of state voters could A) end the 2/3rds budget rule; or B) modify Prop 13’s rules. [quote]I do not know about education specifically, but the budget as a whole has stayed at a constant fraction of the economy since before 1999.[/quote] A constant fraction? Really? Do you have a source for this statement? Given that our state economy has been so inconsistant for the last 10 years, a constant fraction seems very odd.
This is what I know ([url]http://www.dof.ca.gov/budgeting/budget_faqs/information/documents/CHART-B.pdf[/url]): in the 1998-99 fiscal year, the state government spent $72.56 billion (not counting bond funds). In the 2007-08 fiscal year, the state government spent $129.66 billion (not counting bond funds).
Our population ([url]http://www.google.com/publicdata?ds=uspopulation&met=population&idim=state:06000&q=california+population+data[/url]) was 33.5 million in July of 1999; it grew to 36.7 million in July of 2008.
Adjusting for population growth, our per capita spending at the state level inflated year over year by 5.59 percent. Over that same period, the state’s cost-of-living ([url]http://www.dof.ca.gov/HTML/FS_DATA/LatestEconData/documents/BBCYCPI.xls[/url]) inflated by 3.1 percent over the same period. Therefore, the expenditures of the state government grew 80% more per year (5.59/3.1) than did the general inflation rate.
And THAT is why we are in trouble, now.
What could we have done differently? We could have restricted our state government’s expenditure growth to say the CPI + 1 percent per year (to allow for population and technological growth). That would have meant a growth in expenditures of 4.1 percent per year instead of 6.66 percent.
If we had inflated at 4.1%/year, the state would have spent $104.17 billion in 07-08, $25.49 billion less than it actually spent. Over that decade, the state would have saved $109.73 billion; and we would not be in the mess we are in, today.
Interesting to follow the results for Yolo Co. See
[url]http://www.yoloelections.org/returns/[/url]
As usual, Davis tended to buck the trend for the rest of the county, showing surprisingly solid support for 1A and 1B.
I disagree with the other Davis parent on the question of per pupil spending. California has a higher cost of living than average (by far) and also greater student needs (by far) in terms of English language learners than most other states. Maybe not in Davis, but students in many many parts of California have high needs that require more spending (ELL and reading teachers, for example) – and the teachers need to be able to afford to live here.
The impact of lowered class size is most strongly felt by students with higher needs – English learners and low income children. Davis may not have as many of these children but other parts of CA sure do.
Regardless, one of the main reasons school spending has increased is Prop 98, which was passed by the voters in 1988 and mandates continual increases in school spending. These kinds of initiative measures make it hard for the legislature to have much flexibility in spending.
[quote]Do you want California to be an employer who ignores prevailing wages, and only marks salary to inflation?[/quote] I want California to pay salaries and benefits it can afford and sustain, so that state employees don’t have to face massive layoffs every time the economy turns south. In the last 10 years, compensation to state employees has skyrocketted. You would have to have your head buried deep in the sand to not know that. We have gone from a very luxurious pension program for all state employees to an absurd one which, we are now discovering, is completely unsustainable. This change took place under Gov. Davis 10 years ago, because the state employee unions financed his campaigns for office and he paid them off. That is old, old news.
As long as we are getting long lines for government jobs — fire dept. jobs in Davis, for example, get more than 100 qualified applicant for each opening — we know we are paying too much. Most public sector jobs don’t have unreasonably high salaries. (Teachers, for example, even though California has the highest teacher salaries, are underpaid in salary.) The excess is in everything else: public pensions, in general, are much too high by 100-fold; non-cash benefits (holidays, vacation, sick time, etc.) are in most cases 2-3 times more generous than workers in the private sector get; job security for veteran workers far exceeds that of the private sector; health benefits and long-term care benefits blow away what most ordinary taxpayers who are funding these benefits get; and so on.
Because we have allowed the cost of govt labor to grow so far beyond a sustainable rate, all but the most senior govt employees are at the risk of losing their jobs or losing time to furloughs. That is no way to do business.
The problem that I see is a very different problem. We can look at the costs of labor, but I suspect when we crunch the math, the problem is largely fluctuations on the revenue side.
What I see as the problem is that we budget basically year to year. Which means we are budgeting on the jagged line of revenues. In good years, we increase spending, but in bad years it is difficult to cut spending. So we borrow and the problem compounds itself.
Instead of budgeting year to year, I suggest we use past revenues to produce a revenue trend line and we budget to the trend line, doing a course correction on the trend line each year. So in good years, the trend line moves up, in bad years it moves down. In good years we save the difference between the trend line and the revenues to create a fund that helps us augment the trend line in bad years.
Things look worse now because this economy is about the worst we’ve seen, but I think we need to change our approach and that will help to fix the other things that I agree are concern, especially when we are talking about fairly wealthy people getting 200K and larger pensions, that’s just absurd.
Appreciate Rich for digging up the numbers, and I’d really like to see Greg rebut them in some detail.
My BS meter also went into the red as soon as I saw Greg’s claim that spending had remained constant as % of the economy over the past decade. I had done some back-of-envelope calculations last week, and that simply didn’t sound realistic to me. Furthermore, if Greg’s claim is that spending has remained constant as a percentage of wealth (beyond inflation/population growth), then isn’t it the most obvious statement in the world that with the dramatic reduction in per capita net worth that we’ve seen over the past 12 months, government spending MUST match?
If our collective net worth has been dropped to near 1999 levels*, then shouldn’t government spending be dropped to the same level (+ inflation and population growth)?
*Just using 1999 as a base for sake of argument. I’m not suggesting 1999 was in any way a “good” year in terms of the scale of government spending… just a BETTER year than 2009.
This just in:
“The independent California Citizens Compensation Commission, created by Proposition 112 that was passed by voters in June 1990, voted 5 to 1, today (May 20) to reduce the salaries of all state elected officials, including the Legislature, by 18%. However the reductions will not apply to current office holders due to state law – but will take effect for all legislators elected in the 2010 state elections (or for legislators elected in special elections after December 6, 2009).”
[quote]Instead of budgeting year to year, I suggest we use past revenues to produce a revenue trend line and we budget to the trend line, doing a course correction on the trend line each year.[/quote]That is what Prop 1A proposed. The trend line was to be 10 years.
A different Davis Parent,
I think it’s time we learned to define the word “need”.
Do you expect me to point to any individual and say, that person should be condemned to inferior health care service, inferior education, and inferior standard of living? When we’re spending “other people’s money”, the answer is… of course not. I would love undocumented workers to have quality primary care (good for them and good for the community), and under-performing schools be flooded with financial resources.
I’m in favor of a liberal government spending to provide opportunities to the under-served… frankly, I think there’s great injustice in the DHS stadium campaign not because I believe those dollars should go towards Davis teachers, but because it is poorer school districts *really* need those dollars. But I still believe this spending must be seen as a luxury, and this spending must be commiserate with what our economy will bear.
If the argument is that Davis teachers required higher compensation in order to accommodate the soaring cost of living over the last 10 years… now that at least the housing component has dropped 40%+ from the peak, wouldn’t the same logic suggest it’s time to talk about dropping their compensation appropriately? The problem is that these “adjustments” tend to only go in one direction: UP.
“That is what Prop 1A proposed. The trend line was to be 10 years. “
The problem with Prop 1A is that while it capped spending and created a rainy day fund, it did not actually authorize government to use that fund. What I am proposing is actually taking the fund to augment the trend line in low revenue years and saving in high revenue years.
The other problem with Prop 1A is that they conflated too many issues and created a losing coalition as a result. Some people voted against the hard cap, some against the tax increases, some against the unilateral power of the governor, and some against the inflexibility of the rainy day fund.