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California’s Budget Fiasco

by Susannah Kopecky, published

California is one of the most influential states of the nation, and as of right now, one of the more economically troubled ones.

Within our state's budget, there is plenty that not only can be trimmed down, but deserves to be trimmed down. As many Californians may agree by now, it's time to trim the fat; and not just ceremonially, but really. Governor Arnold Schwarzenegger declared early this week that California is in a state of emergency, and the budget must be amended to reflect, and subsequently, fix that.

California has the eighth largest economy in the world. This year it is especially important to come up with a reasonable way to close the deficit, as the state personal income tax, which is one of the single most lucrative ways the state makes money, is slated to be down at least $389 million from last year.

According to the official California budget summary, the state is projected to have at least a $17 - $24.3 billion deficit, which has more recently been estimated to be closer to $28 billion.

As the most populous state in the union, and one of the great sources of innovation in this country, there are ways that leaders both in government and the private sector can come up with ways to not only decrease the deficit, but put the state on track to a future surplus. According to the budget summary, "The outlook for the California economy is for little growth in 2008 followed by slow growth in 2009 and moderate growth in 2010."

It's time to tighten the belt and scale down to what we actually can afford. In a time of fiscal crisis, we cannot afford to start extravagant new projects, no matter how wonderful they may sound. Once we are out of the red, we can begin to once more consider expensive but worthwhile projects. Any responsible taxpayer knows that when prices and expenses increase and revenue does not, certain areas must be tightened or cut out entirely. In a state as central to so much business as California, it's tough to point to one agency, and simply say, "You're out!" However, we need to look at the bigger picture and determine what works, what doesn't and what we can actually afford to keep.

It's time to realize that in an economic crunch, we cannot enjoy all of the same luxuries we can afford during rosier economic times. This is not to say that such cuts should remain permanent, but they must certainly be considered at the present time, as we consider the feasibility of what we can and must discard over the fiscal year 2008 – 2009.

California has more than $2 billion in reserve funds. However, looking at the amount of money that will be spent carte blanche this coming year, such proposals are simply unacceptable in this time of need. According to the budget summary, General fund expenditures are proposed to be cut by more than $1.7 billion, including a $253 million cut in the category titled "Resources" (or a 13.5 percent change from the prior year's budget), an $8 million cut in Labor and Workforce Development (7.6 percent of the agency's entire budget) and a $1.362 billion cut in financing for K-12 Education, only a 3.2 percent cut.

According to projected budget estimates for 2008-2009, Health and Human Services and the K-12 Education fund are the most well-fed agencies of the state, with HHS having a projected $38 billion budget (with a projected $74 million increase for the coming year, with a total budget composed of funds from the General Fund, Special Fund and Bonds, with about $29.8 billion from the General Fund) and K-12 Education receiving more than $45.7 billion (made up of the General Fund, Special Fund and Bonds, closer to $41 billion from the General Fund alone), with a projected decrease of more than $1.3 billion. Looking at the official budget breakdown, it becomes clear that nearly half of the entire state budget is dedicated to education. Considering there are many schools that, despite healthy funding, are still failing, should the state continue on in the same trajectory, expecting change?

Albert Einstein defined insanity as doing the same thing over and over and expecting a different result. It would be insane to continue to pour a fantastic amount of state and federal monies into a flawed system, with no more strict accountability than ever before.

On top of that, this year's budget proposes an increase of $1.5 billion (totaling $71 billion), despite the fact that in the same budget analysis, it is forecast that the state will see "little growth" in 2008 and "slow growth" in 2009. As a trend, funding for the public school system has increased steadily over the years, and no dramatic resulting trend in higher testing scores or school passing rates has come as a correlative effect. This begs the question, are those behind this funding hypocrisy acting a bit insane, per Mr. Einstein's definition?

When in a budget crunch, don't stretch resources ever thinner, via luxury proposals. In this year's state budget, $9.9 billion have been allocated to give the High-Speed Rail Authority, to build a rail system across the state of California. Proposition 1A (the Safe, Reliable High-Speed Passenger Train Bond Act) was approved by the voters in November, and will require billions of dollars from both the state and federal budgets; billions of dollars which are not lying around. This was approved before many residents realized the depth of the budget woes. This is one project that can and should be shelved until the budget is in better shape.

Another suggested increase in the proposed budget summary is $2 million to be given to the Secretary for Business, Housing and Transportation, to the California Economic Development Fund, in the name of implementing the "10-Year San Joaquin Valley Strategic Action Proposal," the funding that will "sustain a public-private partnership to promote economic development, workforce development, education, transportation, land use and environmental issues." Knowing the rough details, this sounds like $2 million that could and should be better used elsewhere; in addition, some of the important aspects of this proposal are already covered within other agencies, including education.

Plans such as these, which spill over into other departments, seem superfluous at a time when the basic needs of the state need to be met, before millions of dollars are spent investigating "environmental issues" that the EPA and a myriad of other organizations can already handle quite competently.

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