State Employees Are Not the Cause of the State’s Budget Problems
One of the key differences that people need to understand is that the composition of the state budget is very different from the local budget. Locally, employees make up over 70% of the city’s costs. The result is that increases in compensation both in terms of salaries but also in terms of promises for pensions put a huge strain on the budget.
The city of Davis managed to survive first through the collection of a half-cent sales tax that produced around three million per year in revenue and also because property tax revenue was increasing at a very robust rate during the last decade. However once the real estate market flatlined in Davis and busted in the rest of the state, revenues could no longer keep pace with increases in employee salaries.
Two weeks ago, the voters of California said no to PG&E’s attempt to buy marketshares and avoid competition from public power. Davis residents saw through the charade, voting against the measure by nearly an 80-20 margin. However, PG&E pumped in more than 46 million dollars into a campaign aimed at deceiving the voters into support. It nearly worked, but not quite.
California is trying to pass legislation that will clear the way for Calfiornia to compete in the Race to the Top program which would make the state eligible for up to 700 million. The money would go to reform the nation’s worst-performing schools. However, a fight has emerged on what role Charter Schools should play in this effort.
