State of California-Needs to go on a Budget Diet

Recently, I have taken a closer look at how the State of California spends money. If you ran your household this way, you would be filing for bankruptcy. Take a look at the chart above which shows spending vs. revenues for the State budget years 2000-2001 to 2008-2009:

Notice how spending has increased over 43% since the 2000-2001 budget year? The budget was balanced through the 2005-2006 budget year but spending continued to escalate while revenue growth slowed down. Unfortunately, the State Legislature never considers that the tax payers will go through a tough economic time or those revenues will slow let alone decline. Welcome to the recession of 2008-?

Since tax payers revenues are decling, where can the State of California make real cuts (not phony one like cutting the “rate of spending”)? My source document is the 968 page State of California budget document for budget year 2008-2009. Let’s take a look at programs that can be cut or reduced immediately. It will require hard choices just like any taxpayer would be required to make when their income levels off or is reduced.

1. Heath and Human Services Agency $5,335,000

(We spend this kind of money on an agency that advises the State on health issues?)

2. California Conservation Corps Workforce Development $37,638,000

(Why is the State spending money doing workforce development-scrap the entire program)

3. Department of Conservation-Mineral Resource Development $5,117,000

(The State doesn't need to map mineral resources-Private Industry can do that)

4. Housing &Community Development Block Grants $4,276,000

5. Migrant Services $6,866,000

6. Wildlife Conservation Board $204,000

7. Health Planning & Development (Work Training) $5,059,000

8. California Department of Aging $216,442,000

(What does this department do??)

9. Small Business Loan Guarantee Program $4,886,000

(Would need to see a report on how this department is doing. If this is the Cedley Program, it might make sense)

10. California Science Center $17,934,000

(Users should pay for this in terms of fees)

Total Savings $303,757,000

These are relatively small programs when you are dealing with a $111.8 Billion budget. But there are tons of other programs and worthless commissions that need to be cut. How about the Solid
Waste Advisory Board? These commissions are where they park old politicians who are termed out and pay them $135,000 per year to do nothing.

Now, let’s look at two of the bigger sinkholes in the budget:

1. Aid to illegal aliens Approximate cost of $10-15 Billion per year. This includes teaching illegal alien children in school, funding emergency room visits for the uninsured where the bills are sent to the State and every hospital is straining to get paid for their services.

2. Growth in Government Workers Cost estimates run from $10-30 Billion per year depending on what budget year you want to use.

The number of California State employees has increased from 170,000 to nearly 350,000 over the past 10 budget years! With increases in employees also come increased salaries, health insurance benefits and higher pension obligations that will further bloat spending in the future.

It is well past time for the State bureaucrats to make serious cuts in State employment rolls. An immediate hiring freeze should be instituted and 35,000 to 50,000 workers should be eliminated. We are talking about 10-15% work force reduction. Workers in the private sector are losing their jobs at a record pace and the State of California should be no different. California managers need to review and cut spending and personnel across the board. The benefits:

• Restore the State’s bond rating so the State can borrow at lower rates

• Balance the budget so that recently passed taxes can be eliminated or rolled back

• Cut future budget problems now rather than let them mount up leading to additional tax increases

Since the State of California has no leadership in either house of the Legislature or in the Governor’s office, I doubt it will happen anytime soon. So, we taxpayers need to starve the beast. The first place to start is rejecting Proposition 1-A on May 19, 2009, a ballot initiative that would extend recently passed tax increases for two more years under the guise of putting spending caps on the State budget.