California State Budget Case Study

Our governor along with many other people in our state, recognize that our tax system is biased, unethical, and needs reform. Governor

There are some differences and similarity between the State and Federal budget. The Federal budget is bigger than the State budget. The federal government have the sovereign bank. The Federal government have the ability to print additional money when the need arises. The federal budget needs not balance revenues and expenditures for each fiscal year. At the subnational level, appropriations must not exceed revenues in the State budget. This creates restriction which is mandated for almost all the state and local finances. “This imposes a discipline at state and local government which the federal government may chronically evade. States cope by setting aside reserves in good years to hopefully cover deficits in bad revenue years” (n.d., 2012).

The first chapter of the book is an introduction to the economy, politics and people of California. It encompasses the economy, politics and demography of the state for the past, present and the future. The edition features updated demographic information of the state from the census that took place in 2010. The chapter explains the state’s transition from colonization to rebellion and statehood. It discusses California’s past, including the great depression, political turmoil, infrastructure, workingmen’s party and World War II. The growth, reform and progressive change of the state to what it is today is also highlighted in the book. California previously faced budget deficits

As taxpayers, people are required to pay imposed taxes and derived taxes. Since payments are not voluntary as opposed to nonprofits, people want to know where the government currently stands, whether it has sufficient revenues for efficiently running current public services, and how much it has improved compared to last year. Examining government-wide financial statements will give readers a basic understanding of the government’s condition. The government-wide financial statements consist two parts: the statement of net position and the statement of activities. Based on the statement of net position, in 2015, the State of California has a deficit of about $41.0 billion. Compared to the past 10 fiscal years, the fiscal year of 2015 has the least amount of total governmental activity net position and total primary government net position. In addition, the unrestricted deficit as a percentage of total assets is -75.64%, which is close to -100%. This number

The lack of representation has resulted in the “cut off from the seats of power by geography, alienated by the state’s left-leaning politics and tendency toward regulation, enduring stubbornly high unemployment, facing the decimation of traditional industries such as logging, and harboring few prospects for economic growth”, says Goodyear. All these problems could be resolved by one simple, but very complex solution; separating California into two different states: The State of California and The State of Jefferson. Separating California into two or more states would be the most effective option in lowering taxes

The federal government and states each have budgets that outline the amount of money that will be collected from taxes, how much will be spent in revenues, and what programs will receive money allocated to them from these expenditures. Every fiscal year, the federal budget and state budgets are reset so that they start from October 1st until the end of September of the following year. The federal government’s budget contains allocations for health care, pensions, education, defense, and welfare. The State of Colorado’s budget contains expenditures allocated to education, health care, pensions, protection, transport, and welfare (Chantrill, 2015). The

In order to create realistic solutions, it is essential to see how Californians have funded infrastructure projects in the past. Before California became the populous state it is today; not much infrastructure was built because the demand was not set in place. As more people moved to California as a result of the California Gold Rush, roads were cleared to make commutes easier. Property tax mostly funded these projects. It was not until the creation of the 1909 State Highway Act that significant infrastructure was established which included a 34-route 3,000-mile system. Although this highway act lead to a substantial creation of highway infrastructure, “initial estimates proved inadequate, and the state required additional highway bond measures

Personnel’s became a target for cutting down spending. Positions were abolished, employees were furloughed for three years and there was a decrease in merit based increases. Along with personnel cutbacks, the state cut back on higher education aid, state agency operations and pay-as-you-go capital programs. In Order to keep spending cuts minimum, he focused his attention on increasing revenues. This resulted in hikes in income tax rates and changes to exemption levels; increasing the sales tax, corporate income tax, fees; and efforts to improve tax

As mentioned by Thompson (2010), in the Associated Press, “Lawmakers bridged a $19 billion shortfall, more than 20 percent of the $87.5 billion general fund spending plan”. This shows that the state was heading towards a financial crisis and more deficit creation. Moreover, Thompson (2010), in the Associated Press also points out that “It includes no tax or fee increases but uses a combination of cuts, funding shifts, delayed corporate tax breaks and assumptions about money the state hopes to receive”. The budget gave rise to other dependent costs such as delayed tax refunds. It was uncertain that the State will receive the required funds from the federal government to ensure that the important programs will function the way it used to be until the funds are received.

Report by the Legislative Analyst's Office that predicted a severe budget shortfall meant that most of the California public school students were to experience shorter school year. Governor's tax measures tried to solve the cuts of public school financing. Menifee district depended on Governor Jerry Brown's initiative or the education to face $5.5 billion, thus advising school districts plan for the worst case scenario in their endeavors to come up with their 2012/2013 budget.

While there can be political joy from cutting state taxes, the bulk of the House 's cuts relied on shuttering the state Department of Education for the next three months -- an insufficient, politically unpopular action that forced lawmakers to vote for an estimated $300 million in tax increases just to bridge the revenue gap from April 1 to June 30. But these increases were far short of enough -- prompting Edwards to use $128

The state of California along with many other states has gone through periods of recessions. The major difference between California and other states is the difference how California manages the state budget. The California governor creates a budget and is sent to the Department of Finance. The Department then modifies the budget according to the likings of the governor. The governor can have a deficit but must fit the deficit into next years budget. A deficit refers to a shortage of funds and can create problems when creating the state budget. If there is a surplus (abundant amount of revenue) in the budget then the governor has the power to create programs that are politically advantageous. During times of financial crisis the process of

I believe our budget must be reviewed. Massive amounts of non-discretionary funding fails to allocate funds in the most efficient way possible. As members of a state government, delegates must seek to construct a balanced, yet effective budget that assists all its citizens equally. However, I believe cutting

Brown had to decide how to balance the budget. He transferred inmates that were in overcrowded prisons to county jails. Funding was cut in areas of education offerings with the universities and colleges, schools personnel and programs, welfare programs by $5 billion dollars, and state workers were furloughed. (California Gov. Jerry Brown On Balancing the State Budget 2013) The governor had to raise the income taxes on the rich and increase sales taxes for everybody. Gov. Brown also had legislation to pass a law that the local redevelopment agencies would be closed. The redevelopment agencies were used to help cities with urban development. As a result of the later closing of 400 agencies, the monies that the local cities were receiving from property taxes were used to help fund the state budget. (Taggart

Dr. Stewart discussed a variety of actors involved in budgeting who have different and often clashing motivations and goals. Two of such actors include; Chief Executive Officer (the mayor or city manager, the governor, the president) and Legislators. Representative Guzzardi talked about budget crisis in Illinois state. He stated that two things happened in 2015, a new governor of Illinois got elected in 2015 and the state income tax rate went from 5% to 3.75%. In Illinois income tax is the same for everybody (flat tax) unlike other states where people who earn more pay and those who earn less pay less. He pointed out that the new governor told them that he would negotiate with them about raising the money they needed to pay the bills if they use the Turnaround Agenda (how to fix Illinois). Consequently, the state of Illinois experienced budget crisis because the governor and the representatives could not reach the consensus on his proposal of Turnaround Agenda. In both classes I prepared and analyzed budgets for different cities. Furthermore, I played different actors roles and realized some issues that lead to the budget impasse when the legislators and the governor do not agree they did in