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Old 02-01-2003, 03:21 AM
anthonyb anthonyb is offline
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Join Date: May 1999
Location: Sacramento, CA
Posts: 1,565
The deficit comes from 1. program expansions (which Democrats are loathe to cut) 2. tax cuts (which Republicans are loathe to remove) and 3. a steep decline in capital gains taxes (which everyone is starting to realize is a lousy source of revenue). Given that the budget needs both Democrat and Republican votes to pass, it will be a long time before we get a budget this year.

Since it hasn't been mentioned yet, the 60% reduction in the VLF about four years ago was actually one of the biggest components of this change (certainly the biggest tax cut), worth about $4.3 billion over the next year and a half. Whether you think it should be reinstated or not, people should know that the current proposal is to put it back where it was in 1998 before the tax cut. These VLF monies (currently backfilled by the state) are by far the largest source of discretionary funds for local governments, meaning that it pays for things like Community-Oriented Policing, libraries, park and rec, garbage pick-up, etc. Basically anything that's not fire, life, and safety.

Also, while California still ranks near dead last in per-pupil spending, education nevertheless constitutes by far the biggest chunk of the state budget. K-12 represents 43.6% ($27.4 billion) of proposed 02-03 General Fund spending, followed by UC/CSU/Comm College at 13.6% ($8.5 billion).

K-12 is in line to receive a proposed $1 billion across-the-board hit, but that represents only 3.7% of their GF budget. Compare this to a total $26-34 billion deficit, and that tells you about what's going to happen to other programs.

People also may not know that between 60 and 70 percent of the state budget is non-discretionary, fixed through federal, state and local mandates, as well as through required spending due to population growth. One of the most significant mandates is Prop 98, which was a constitutional amendment passed by initiative in 1988. Essentially, Prop 98 provides a funding floor for K-14 education, and ratchets that floor up in good budget years. Another voter-passed mandate was Proposition 49 from last year (the Schwarzenegger initiative), which dedicates $500 million in state funds to after-school programs, once it goes into effect.

FWIW - three of my friends are public school teachers, and at least one of them is expecting to be laid off within the next five months. She just bought a house too...

-anthony
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