Arnie’s California budget

Calpundit provides a useful tabular analysis of how California’s new governor will address the state’s fiscal crisis. Here is the entire budget document. Here is another blog analysis.

Where are the cuts coming from?

Overall, the cuts appear to be approximately as follows: $900 million from MediCal, $800 million from CalWorks welfare-to-work programs, $.6 billion in other health and human services programs, $400 million from higher education, $2 billion from primary education, $400 million from prisons, $1 billion from transportation projects, and $.2 billion in miscellaneous.

On top of that we have fee increases of $1.3 billion, much of that coming from casinos, and $4 billion of borrowing. If we can take all the numbers at face value (hardly ever the case with political budgets), a $14 billion budget shortfall will be covered.

The bottom line: Once you push through the smoke and mirrors, spending cuts amount to only a few billion. Still, this is the best political test we are likely to see of whether real spending cuts can be sold to the general electorate. If it sounds like Arnie is cutting too much budget meat for your taste, keep in mind that California state spending rose 44 percent since 1997-8. State bonds are near junk status and possess the lowest credit rating among the states.


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