Key Facts About the Governor’s Proposed Budget, Part 2: Proposed State Spending Remains Below 2007-08 Level

This is the latest in a CBP chart series highlighting some of the most important aspects of Governor Brown’s 2013-14 budget proposal and the context for it.

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Last week, we described the role voters played in approving new revenues to put California back on the path to fiscal stability. Thanks in large part to the passage of Propositions 30 and 39, California’s budget is roughly in balance, after many years of severe budget shortfalls.

Turning to the other side of the ledger — state spending — under the Governor’s proposed 2013-14 budget, General Fund spending would be $4.7 billion higher than in 2012-13. Yet this year-over-year increase, while notable in light of recent years’ budget gaps, is highly targeted, with much of the additional funding channeled toward K-12 schools and higher education. Beyond these targeted increases in spending — which are largely attributable to the state’s increased minimum funding obligation for schools and community colleges due to new revenues from Propositions 30 and 39 — General Fund spending for most state programs and services would remain at or near current levels.

In fact, total state spending in the Governor’s proposed budget remains approximately 4 percent below what it was in 2007-08, the year the Great Recession began, after accounting for inflation. To help put this number in context, over the same period of time, California’s population has grown by more than 1 million.

Unfortunately, many of the state programs and services that aren’t slated for significant funding increases are currently operating at reduced levels, having been hollowed out by repeated cuts in recent years. Some of them — like subsidized child care and the state preschool program, which have been cut by nearly $1 billion, or 110,000 “slots” since 2008 — are the very services that could provide the biggest boost to low- and middle-income Californians struggling to find and keep work. While the Governor’s proposal does include a small funding increase for CalWORKs welfare-to-work services, county agencies must use these funds to implement sweeping programmatic changes made to CalWORKs as part of prior rounds of budget cuts. A reduction of the CalWORKs time limit for adults from 60 months to 24 months means that participants now face a challenging job market with less time to access resources for securing long-term employment.

As the state begins to recover from years of serious budget challenges, policymakers should seek to reinvest in the vital public services that foster economic growth, contribute to broadly shared prosperity, and ensure support for those most affected by the Great Recession and its aftermath. California’s child poverty rate — nearly one in four — and high long-term unemployment rate are sobering reminders that many Californians are still living every day with the consequences of this difficult chapter in our state’s economic and fiscal history.

– Hope Richardson

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