Last week the Orange County Register published a lengthy article about California’s skyrocketing spending and budget deficit that included some comments from the Department of Finance and Legislative Analyst’s Office that might lead readers to conclude incorrectly that the governor and legislators don’t have authority over much spending. Some of the comments are non-controversial but some incorrectly imply a lack of authority over statutory spending, some are imprecise about funding sources, and some are striking in their omissions.
What’s non-controversial is that spending on K-12, Community Colleges and debt repayment is constitutionally tied to revenues. What’s incorrect is any implication that governors and legislatures don’t have authority over the costs of meeting statutory entitlements created by governors and legislatures. What’s imprecise is to lump UC and CSU with Community Colleges into a single Higher Education category since UC and CSU are discretionarily funded while Community Colleges are constitutionally funded. What’s omitted are very large amounts of discretionary spending on staffing, salaries and Corrections and conditions imposed or not imposed on recipients of state funds that result in higher or lower spending on services by those recipients. An over-simplified chart might help:
The governor and legislature have authority over very large amounts of discretionary spending. Eg, in the 2023-24 budget they chose to allocate $14 billion from the General Fund to Corrections in comparison to $4.8 billion to University of California and $5 billion to California State University. Likewise, they have discretion over Executive Branch staffing to which they added 40,000 employees over the last five years and salary and benefit increases of which there have been multiple over the same period, notably to members of organizations that make political expenditures and/or provide political endorsements. They have authority over very large amounts of statutory spending by virtue of their ability with a simple majority of the legislature and signature by the governor to enact, amend or repeal statutes. Eg, last year the governor and legislature expanded healthcare entitlements at an estimated additional cost to the General Fund of $2.6 billion per year. Similarly, they have the power to impose expensive conditions on recipients of state funds. Eg, last year the governor and legislature enacted a statute granting higher wages to healthcare workers that will cost the General Fund $2 billion in the next fiscal year, once again benefiting members of organizations that make political expenditures and/or provide political endorsements. The governor and legislature also have the power to require recipients to make better use of state funds. Eg, presently they do not require public schools, the University of California, California State University, Community Colleges, cities, counties and agencies to take advantage of Medicare, Obamacare and employer-provided coverage whenever they promise healthcare subsidies to retired employees, a step that would free up billions more for classrooms and services.
Don’t let anyone tell you the governor and legislature don’t have the ability to bring spending into alignment with revenues or to require recipients to make better use of state funds. The issue is whether they have the nerve to represent the general interest and to confront cronyism.
