Friday, June 13, 2008

The California Budget Deficit




The Constitutional deadline for passing a budget by the legislature comes on Sunday, and the legislature is unlikely to complete its task. But two articles in this morning's Bee struck me. On the front page was an article about hiring in the state government.

In January of 2007 there were 194,982 state employees. In a time of multiple year deficits one would think that the number of employees would decrease. But a year later there were 202,113. Even more surprisingly, in May (after the revised budget estimates by the Administration which projected an even larger deficit - we now have 206,130 employees. Can you think of any other enterprise where they face a short fall in double digits where the number of employees would increase almost 6%? Neither can I.

Then comes the head of the California Federation of Teachers, one Marty Hittleman. Presumably Mr. Hittleman, as a teacher and a person who engages in public policy debate would bother to check his facts when writing a plea for more taxes. Well the presumption is wrong. In his plea for even more taxes, Hittleman comments (rather gratuitously) "Many are angry that a larger proportion of the federal budget is spent on the military than anything else." The two attached charts explain how wrong Mr. Hittleman is. The first shows that Social Security takes a substantial portion of the budget. The second shows that our military spending is about the level it has always been in terms of GDP share. One wonders why Mr. Hittleman would even bring up military spending in a rant about state taxes but that is another story.

The state's budget deficit is real and large. But that does not mean our policy makers are taking it seriously.

2 comments:

Anonymous said...

Are the costs of the wars in Iraq and Afghanistan included in that figure? (Still silly to include in a debate about state budgets, but I'm just curious about the accuracy of military being the largest expenditure).

The other thing that stuns me is that 9% paying off interest. That's a staggeringly large amount...

drtaxsacto said...

The numbers here include all current spending for military. Two things need to be understood. First, there has been indeed an increase as a percentage of the budget based on our activities post 9/11 - but the trend in the 1990s was a declining percentage of the budget being spent on military. Second, the real growth has been in Social Security and Medicare expenditures. So while military has grown - other things have grown too.