Thursday, March 12, 2015

FYI: Past, Present, Future

The Legislative Analyst's Office (LAO) recently put out the chart above showing the trend in state spending from the 1950s onward to the present. (The last data point is Gov. Brown's budget proposal which may be modified by the time the 2015-16 budget is enacted.)  The general fund (dashed line) is supposed to be the operating budget for the state and is the one you hear about when folks talk about deficits, surpluses, etc., albeit with only vague meanings often attached to those terms. The continuous line is the general fund and special funds combined. Special funds are earmarked for particular purposes and may have dedicated revenue streams attached. Transportation funding, for example, receives gas tax revenue. However, the line between operating and special is blurry. During the most recent budget crisis, for example, the legislature essentially shifted some general fund activities to special funds. So while general fund spending seems to have declined in the aftermath of the Great Recession, total spending is currently in the post-Prop 13 "normal" range of 7-8% of state personal income. (Prop 13 - which cut local property taxes substantially and required a 2/3 vote for tax increases - was enacted in 1978.)

Meanwhile, the Dept. of Finance has produced new long- term population projections which show a continuation of the slow population growth that set in after the end of the Cold War and the resultant military/aerospace funding decline.  The white population actually shrinks absolutely over the long term (out to 2060). Latino and Asian populations grow absolutely and relative to the overall total. The black share stays about the same.

The LAO report is at:
The Dept. of Finance projections are at:
A summary of those projections is at:

1 comment:

elhays said...

I wonder how much of the surge in spending in the late 1960s to early 1970s attributable to the shifting of K-12 funding from local to state ledgers because of Serrano v. Priest and similar? It seems the LAO is implying that taxpayers were suddenly paying a lot more in taxes during that period when it might be that local taxes went down while state taxes went up.