Thursday, March 4, 2010

The Problem with California Education Spending--It's Not Education

On March 4, 2010, students and educators around California protested against draconian cuts in education within the California state government budget. However, there are larger issues involved, namely the actual root cause of California's budget mess.

The following chart shows California's expenditures on education relative to the state's total expenditures. The education expenditures include funding for Kindergarten through 12th grade (K-12) plus funding for higher education. Note that the state's total expenditures have increased far faster than education funding.

The chart below shows the same data but this time adjusted for inflation. The expenditures are normalized to 1976 dollars (although not adjusted for California's increased population). In this chart, spending that tracks inflation appears as a flat line. Funding for higher education has essentially tracked inflation while K-12 and total education expenditures increased slightly faster than inflation.

However, notice that total state expenditures grew far faster than the inflation rate. This is the root cause of California's budget mess. While this chart is not normalized for both inflation AND population growth, spending did grow much faster than population. California's population increased by 24% from 1990 to 2009, or 29.76 million to 36.96 million. Meanwhile, inflation-adjusted spending rose 85% from 1990 to 2009 or three and half times faster than population growth!

California's budget problems do not necessarily reside within the education budget, although there is always room for improvement. Because of increased budget demands elsewhere, money is siphoned away from education. Fix the runaway state spending in other areas and the educational budget will fix itself. State spending must be reduced!

Similarly, California's overly-progressive Personal Income Tax mechanism relies too heavily on too few taxpayers and is therefore highly volatile, leading to massive swings in state revenues, depending on real estate returns and the stock market. California's tax structure must be revised to make revenues more consistent, dampening the year-to-year swings.

What is California's Legislature doing to fix these issues? Not much! Instead of focussing on balancing the budget or reforming California's out-of-control public-employee pension system, Legislators pass useless resolutions such as the Cuss-Free Week.

What can you do? Contact your California State and Assembly representatives and let them know that you want them to focus on sanely balancing the budget, cutting spending in areas besides education, and reforming the state pension system.

Find Your California Senate and Assembly Representative

Learn more on what other current and former state leaders have to say.

Former California State Assembly Leader, Willie Brown

California State Treasurer, Bill Lockyer

See also ...

"Why The Student Protestors Are Wrong"


California Program Expenditures

Inflation Data from the Bureau of Labor Statistics (CUUR0000AA0)

Monday, March 1, 2010

Even Liberal Democrat Willie Brown Sees the Problem!

They say that the first road to recovery is to admit that you have a problem. Well, perhaps there is hope for California yet!

Willie Brown, a life-long liberal Democrat, served in the California Assembly for 30 years, was Speaker of the California Assembly for 15 years, and was San Francisco's first African-American mayor. So imagine my surprise to find the following in his "Willie's World" column in the San Francisco Chronicle newspaper, dated 3-JAN-2010.

Willie's World (3-JAN-2010)

"If we as a state want to make a New Year's resolution, I suggest taking a good look at the California we have created. From our out-of-sync tax system to our out-of-control civil service, it's time for politicians to begin an honest dialogue about what we've become.

"Take the civil service.

"The system was set up so politicians like me couldn't come in and fire the people (relatives) hired by the guy they beat and replace them with their own friends and relatives.

"Over the years, however, the civil service system has changed from one that protects jobs to one that runs the show.

"The deal used to be that civil servants were paid less than private sector workers in exchange for an understanding that they had job security for life.

"But we politicians, pushed by our friends in labor, gradually expanded pay and benefits to private-sector levels while keeping the job protections and layering on incredibly generous retirement packages that pay ex-workers almost as much as current workers.

"Talking about this is politically unpopular and potentially even career suicide for most officeholders. But at some point, someone is going to have to get honest about the fact that 80 percent of the state, county and city budget deficits are due to employee costs.

"Either we do something about it at the ballot box, or a judge will do something about in Bankruptcy Court. And if you think I'm kidding, just look at Vallejo."

One question, Mr. Brown: Why all this honesty now? Why not a decade or two ago so that we could have avoided all this turmoil? I guess better late than never.

See also ...

California Treasurer Lockyer Scolds Fellow Democrats on Unsustainable Pensions and Their Inability to Fix the Problem

Jerry Brown won't challenge teachers union