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