As for the overall budget, it is somewhat of a surprise in that total reserves (the General Fund reserve, the Budget Stabilization Account {"rainy day fund"}, and a new Safety Net Reserve) fall. A fall in reserves means the overall budget is in deficit - to the tune of $798 million. The figures can be found below. Governor Brown has devoted budget news conference after budget news conference to warnings of the need to build up reserves in preparation for the next recession. According to official numbers, the current year's budget (2017-18) in fact runs a net surplus. But the budget for the coming year (2018-19) represents a reversal.
I am sure that the governor's spokespersons would point to some payments paying down past debt and the idea that such payments should be counted as offsets to the total deficit. The official document lists such pay downs as $1,747 million. So if you were to count the pay downs against the deficit, it would swing to a surplus of just under $1 billion. Either way, the budget is at best precariously balanced. If you are precariously balanced (or imbalanced) when times are good, a downturn would swiftly pull you into large deficits. As Brown's budget document itself points out, the California budget has a large capital gains tax revenue component that can easily evaporate in Bad Times. If you have doubts, ask Gray Davis.
$Millions 2017-18
2018-19
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GF Reserve
Start of Year $5,702 $8,483
Revenue &
Transfers $129,825 $133,332
Expenditures $127,044
$138,688
GF Surplus/Deficit +$2,781 -$5,356
GF Reserve
End of Year $8,483 $3,127
End of Year $8,483 $3,127
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BSA-Start of Year $6,713 $9,410
BSA-End of year $9,410 $13,768
BSA Surplus/Deficit +$2,697
+$4,358
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Safety Net Reserve*
Start of Year na $0
End of
Year na $200
Safety Net Reserve*
Surplus/Deficit na
+$200
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Total Reserves
Surplus/Deficit +$5,478 -$798
Total Ending Reserves $17,893
$17,095
As % of Expenditures 14.1% 13.0%
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GF = General Fund
BSA = Budget
Stabilization Account (“rainy day fund”)
*Note: The “Safety
Net Reserve” is a new fund which gets around certain limits in the formula
governing the BSA.
Source: http://www.ebudget.ca.gov/FullBudgetSummary.pdf
Source: http://www.ebudget.ca.gov/FullBudgetSummary.pdf
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