Catching Up and Digging Out

We here at the CBP have spent the week since the Governor signed the state’s most recent spending plan into law digging out, catching up, and trying to understand what the latest round of reductions will mean for California. The recent cuts, coupled with those made in February, September 2008, and prior years’ budgets, will have a profound impact on the programs and services that touch every Californian’s life, every day. While there’s still a lot left to be done, here are a few “top line” observations about the budget and what it means for California:

  • Fewer young people will have the opportunity to earn a college degree, which means that employers will have an even tougher time finding the college graduates needed to ensure that California can compete successfully in an ever more competitive global economy. The implications of recent budget cuts to education are hard to overstate. As a recent monograph by the Public Policy of Institute of California stated, “Unless decisions and actions are taken soon to improve educational outcomes for Californians, the state’s future economy and the prosperity of its residents will be compromised.”
  • The Governor’s $50 million line-item veto exacerbates the impact of the Legislature’s $124 million reduction. These cuts mean that well over half a million, and perhaps as many as 900,000, California children will lose access to affordable health coverage through the Healthy Families program for some or all of the year. This increases both the challenge and urgency of enacting health reform at a national level. Just this week, the U.S. Census Bureau released data showing California with the dubious distinction of having the 6th highest percentage of children lacking health coverage among the 50 states.
  • The Governor’s summary of the signed budget  includes some interesting charts tracking spending over the past decade adjusted for population and inflation. While we regularly note – see for example our analysis of Proposition 1A that appeared on the May ballot – that population- and inflation-adjusted spending seriously underestimates demands on the budget, the Governor’s own figures show a substantial drop in Proposition 98, Higher Education, CalWORKs, and State Operations spending over the past decade, while spending for Corrections and Debt Service have increased.  We will be digging deeper into recent budget trends over the upcoming weeks and months.

Finally, my recent blog post asking whether the recent budget agreement marks an end of an era garnered significant attention, including a debate between Washington Post columnists Robert Samuelson and Ezra Klein. This too will be the subject of further reflection here and through the CBP’s policy briefs and research reports.

–Jean Ross

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