It is January, which makes it budget and fiscal forecast season for both the city and the state. Here are some numbers to think about because they foretell some painful choices in the coming months. Posters might want to put up THEIR ideas on how the state and the city should best deal with these challenges.

The State

  • California faces what the independent Legislative Analyst Office estimates is a $14 billion deficit
  • Last year, the state spent $40 billion on K-12 education; $11.2 billion on higher education; $9.1 bill on corrections (prisons and the youth authority); and, $29 billion on health & human services (the bulk of that is for Medi-Cal). What should give everyone pause about wasteful spending in Sacramento is that that those four categories constitute 88 percent of California’s 2006-07 general fund budget.
  • Between fiscal year 1990-91 and 2005-06, the state’s expenditures have increased from $40.3 billion to $91.6 billion or 127 percent. Over the same period of time, California’s population has increased approximately 22 percent and the consumer price index (I could not find a free link to California-specific CPI data so this is for the US) has increased 54.2 percent. If spending had grown only as fast as population and inflation, it would have been $15.6 billion lower.

The city of San Diego

  • According to the latest forecast, the city faces a general fund deficit of some $32 million.
  • It forecast that revenues will grow $160 million, from $1.16 billion in FY 2009 to $1.32 billion in FY 2013 (or an average of 3.2 percent). This assumes that property taxes grow by 6 percent. If those revenues fail to come in at that level, additional cuts will need to be made.
  • Last year, the budget for the library department was $38.3 million and park and recreation department was $115.4 million. These are two of the largest non-public safety departments that are supported by the general fund.
  • The five year forecast does not build in any increase in health care costs. Unstated is whether the forecast assumes that the cost of health insurance premiums will be flat or, if there are premium increases, whether they will be entirely borne by employees.
  • The outlook acknowledges that the $32 million deficit could grow larger depending upon the results of labor negotiations with the five different unions that represent city employees.

At neither the state nor local level, especially in a weakening economy, are there “easy” answers to solve these problems. What will be required is to get beyond rhetoric and begin a sobering discussion about what is the legitimate role for government and what needs to happen to bring spending and revenues into alignment.

On a brighter note: GO CHARGERS!!!


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