Limiting California’s Future – An Elaboration

We received a number of good questions on yesterday’s post. Explaining the impact of a hard budget cap is a tough thing to do in a blog post! The $31.2 billion figure is the difference between budgeted 2008-09 General Fund spending and the level of spending that would be allowed under a cap similar to that specified in ACA 19 (Villines) of 2008. In other words, if voters had approved such a cap beginning in 1995-96, total state spending would be limited to $39.7 billion less than that authorized by the 2008-09 budget and the General Fund’s share of the necessary reductions would be $31.2 billion.

We look to the past to estimate the impact of a cap because doing so gives us hard figures for population and personal income growth and inflation. The problem with a hard cap is that sets an arbitrary limit, but doesn’t tell you where or what to cut to bring state spending under the limit.  The spending cap proposed by Republican lawmakers is also incompatible with the state’s school spending guarantee, but that’s a subject for another blog post.

— Jean Ross