Breaking down the California budget

SAN DIEGO (KUSI) — Sacramento passed a $122 billion balanced budget Wednesday amid swelling state revenues coupled with the fear of a looming recession.

Governor Jerry Brown fought against his Democratic colleagues desires to increase spending, but in the end he relented.

There’s increased funding for education, for child care, more funds for newborns, for mothers on welfare, low income housing and a warning of deficits by the time the governor leaves office.

Pick up any newspaper and you’ll read about job growth and the economy slowing down, causing the fed to hold interest rates at historic lows.

Then there’s California, doing better than most, but vulnerable because the state relies on taxing the wealthy who become less wealthy when the economy slows.

"Capital gains comes and goes with market fluctuations economic conditions and so forth, every indication today is  things are plateauing, starting to head south," said Chairman of San Diego Tax Fighters, Richard Rider.

The state generally takes in more revenue than the previous year, but we also spend more.

The charts and graphs aren’t out for the 2017 budget, but the percentage of spending remains basically the same year after year.

  • 53% for education
  • 29% for health and human services
  • 9% for corrections
  • 6% for other
  • 2% for natural resources

Rider said we’re spending too much based on projections, which always seem to be too high. Ever the governor is warning of coming deficits.

"When the shortfall comes then we can say to the populace we don’t have enough money, it’s not our fault. We thought we had the money now we don’t so with a frowning face we’re going to raise your taxes," Rider said.

Labor is pushing to have the Prop-30 temporary tax increase extended. In fact, there may be up to 9 tax increases on the November ballot.

It’s got to where tax advocates are fighting among themselves. SANDAG is encouraging others to wait.

"Please we need to pass the sales tax and in order to pass the sales tax we need you to hold off this election we’ll get yours on the next ballot," Rider said. 

Then there’s the debt.

"We have made a commitment to pay absurdly high pensions relative to the money we’ve put aside that shortfall is inevitable going to fall on the shoulders of the taxpayers," Rider added.

And there’s debt that is not carried on the balance sheet. And on the revenue side, cap and trade tax revenues have plummeted.

The surge tide of revenues is beginning to turn.

Another problem making it difficult to manage our finances is some decision are made by the governor and the legislature and others are made at the ballot box.

Categories: Local San Diego News