$102.8 billion in state and federal funds for fiscal year beginning July 1, 2004, ending June 30, 2005. The state general fund portion is $77.6 billion.
It's $3.7 billion higher than January's $99.1 billion proposal.
No new taxes.
Increases reserve fund to $998 million.
Aims to end state's deficit by June 30, 2006.
Major general fund spending:
$33.9 billion, kindergarten to grade 12 education - 43.7 percent of $77.6 billion.
$25.2 billion, health and human services - 32.5 percent
$9.3 billion, state universities - 11.9 percent
$6.2 billion, youth and adult prisons - 8 percent
$1.7 billion, courts - 2.1 percent
Major revenue sources:
$38.6 billion, personal income taxes
$24.6 billion, sales taxes
$7.9 billion, corporation taxes
$2.1 billion, insurance taxes
$303 million, liquor taxes
$135 million, estate taxes
Significant cuts:
$2 billion less for elementary, middle and high schools
$1.3 billion less for city and county governments
$660 million less for state colleges, universities
$476 million less for state prisons
Positive indicators:
Estimated income taxes for next budget year are $559 million higher than January estimate.
Taxable sales up sixth quarters in a row.
Exports of California.m.ade computers, electronics up 10 percent in fourth quarter 2003 over same time in 2002.
Residential construction is strong.
Personal income in fourth quarter 2003 went up 4.5 percent over same time in 2002.
Personal income is rising faster in California than the nation.
Negative indicators:
1.6 percent fewer jobs in first quarter 2004 than at the same time in 2003.
Estimated sales taxes for new budget $417 million less than January estimate.
---
Source: California Department of Finance
$3.7 billion higher than January's $99.1 billion proposal.
No mention of the increase in state fees...
I'll wait 'til the budget is signed before I say
"I told you so"
Looks like my campaign slogan is coming to fruition.
"Vote 4 McClintock or pay$ the con$equence$"
Just like the majority of politiicians, the governor has left his convictions at the door of his elected office like an umbrella.
I see that they listed liquor taxes, but what happened to cigarette/tobacco taxes? Have they given up on collecting them or something?
A little reminder:
The 13% Solution
Have you ever had to make serious cuts – 15 percent or more – in your family budget because of an unexpected job-loss or unforeseen expense? It’s not pleasant, but it's not impossible. And it's also not permanent. As long as you’re willing to face your financial problems squarely, you can be sure that the hard times won't last forever and things will improve.
But if you're not willing to face those problems – if you paper over your debt by borrowing and continue to spend as if that debt didn’t exist -- those hard times will follow you far into the future.
State government is no different. And as the new administration decides which road it will take, it is important to understand the simple math of the state’s finances.
California’s current budget deficit is caused by two actions Davis took last year to paper over his mismanagement: he illegally tripled the car tax and he attempted to borrow $12.6 billion unconstitutionally.
Governor Schwarzenegger rescinded the illegal tax increase on his first day in office. It’s important to note the word "illegal." Not one of the conditions required to raise the car tax had been met, and it was only a matter of time before the courts ordered the money to be returned to taxpayers with interest. By acting now, he saved California from having a multi-billion dollar hole blown in a future budget by court order.
But repairing this problem requires that local governments be reimbursed for their losses. In addition, the courts have already invalidated $1.9 billion of Davis’ borrowing plan, further deepening the deficit.
According to the Legislative Analyst’s Office, these developments mean that the state will end up spending $76.9 billion this year, with only $74.2 billion in revenue.
It gets worse. The courts are also poised to strike down the additional $10.7 billion of borrowing in Davis' last budget. It is not a pleasant financial situation. But it is also not impossible.
If the current rate of state spending were reduced 13.4 percent on January 1st and frozen through Gov. Schwarzenegger's first budget, the state would be back in the black, free and clear of external debt, and able to start the Governor's second year in 2005 with a clean slate.
A 13.4 percent reduction would mean cutting $5.2 billion from this year’s budget before January 1 and setting next year's budget at $66.6 billion. That’s a big cut – and it means giving up billions of dollars of programmed spending increases next year. But it's still 15.2 percent more than California was spending when Gray Davis took office. And after 18 months of austerity, the Governor would be able to plan his second budget with $12 billion of breathing room in 2005 when revenues are projected to reach $78.6 billion.
Like a family that has faced its finances squarely and tightened its belt, California would be solidly back on its feet and looking toward a sunny future.
The alternative is to borrow the difference at heavy rates of interest over the next generation. Like a family that can’t bear to change its ways, it would end up dragging its financial difficulties into future years as it struggles to meet its current expenses and pay down a crushing credit card debt as well.
These are the two roads diverging in the budget woods and the choice that is made in coming weeks may well determine whether California has the fresh financial start it deserves, or whether the ghost of Davis' excesses stalks a generation to come.
Tom McClintock
This guy said the same thing when Arnold was elected. Why do they (media) keep going to him? Is his jewishness indicative of his rising political star status in this new socialist utopia called California?
Watch this guy, he's been 'chosen' by the lefty-ist of the left to achieve great things for them. Look up mealy mouthed to see a picture of this dude. This is California's answer to New York's Schumner. Uber-understudy-boy.
Every time Arnold mentions "the people", I feel like breaking out a hammer and sickle.