Saturday, April 23, 2016

Cap Caution

While the legislature and the state auditor are critical of UC for reliance on out-of-state students as a source of funding and want to cap such enrollments, the prospects of reliable and increased funding from the state are not great:

California, whose state budget is highly dependent on volatile income taxes, is the least able big state to withstand a recession, according to a “stress test” conducted by Moody’s Investor Service...

Moody’s report could help Gov. Jerry Brown this year as he resists pressure from fellow Democrats in the Legislature to increase spending, particularly for health, social and pre-school services, and pump more revenue into a “rainy day fund” that voters, at his behest, created in 2014...

In addition to revenue volatility, the Moody’s report also cites California’s relative inflexibility on the spending side of the budget ledger and the fact that the Legislature needs a two-thirds vote to raise taxes, both of which expose it to greater peril if recession strikes...

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