patrick.net

“Sacramento is legally obligated to pay many billions of dollars withheld from schools, local governments and healthcare providers as lawmakers struggled repeatedly to balance the books. It owes Wall Street more per resident than almost every other state. And it has accumulated a crushing load of debt for retiree pensions and healthcare, now totaling more than taxpayers spend each year on all state programs combined.”

http://www.foxandhoundsdaily.com/2013/02/despite-prop-30-ca-revenues-could-could-come-up-short/

f the legislature approves Governor Jerry Brown's 2013-14 budget proposal, California should have enough money next year to increase funding for education and pay down debt, while setting aside $1 billion in a reserve fund.

So they are already looking to increase spending??? What morons!

I am betting they miss their projections.

SFace says

Probably not.

The track record in this type of thing is poor, across the board. I'm speaking about government at all levels in all locations.

I have seen conjecture that the "balanced budget" was calculated without accounting for pension and medical entitlement obligations. Anyone got the info on that?

Got it. So CA's "balanced budget" is mostly a feel-good media piece then? In reality, they are going to have to choose between:
a) Massive federal bail-outs with who-knows what contingencies
b) Big tax hikes across the board
c) Millions of really pissed unions and retirees, and a hurricane of lawsuits that will probably lead to (a) and/or (b)

Does that about sum it up?

Also, do you mean "unlike the PRIVATE sector"?

bmwman91 says

Got it. So CA's "balanced budget" is mostly a feel-good media piece then? In reality, they are going to have to choose between:

no different than a Corporate budget on a economic forecast.. will see what happens at end of the year..end of fiscal year when the actual spending is compared to budget.

If actuals comes in line or less than budget, than its good..
else the Govt has no discipline and all hells breaks loose.

So its a 12 month waiting game to see what actually happens.

bmwman91 says

I have seen conjecture that the "balanced budget" was calculated without accounting for pension and medical entitlement obligations. Anyone got the info on that?

http://www.gasb.org/cs/ContentServer?c=Page&pagename=GASB%2FPage%2FGASBSectionPage&cid=1176156669308

Summary of Statement No. 50
Pension Disclosures—an amendment of GASB Statements No. 25 and No. 27
(Issued 05/07)

and....

GASB 43 and 45

http://en.wikipedia.org/wiki/GASB_45

GASB 45, or GASB Statement 45, is an accounting and financial reporting provision requiring government employers to measure and report the liabilities associated with other (than pension) postemployment benefits (or OPEB). Reported OPEBs may include post-retirement medical, pharmacy, dental, vision, life, long-term disability and long-term care benefits that are not associated with a pension plan. Government employers required to comply with GASB 45 include all states, towns, education boards, water districts, mosquito districts, public schools and all other government entities that offer OPEB and report under GASB

SFace says

That's correct, unlike the public sector which recognize deferred liability (pension and health) as an expense, Government is cash basis. In all fairness they do project the cash contribution required.

nor do many in private sector as in the case of rent payment "liability". The liability is only 1 months worth and in most cases prepaid when the bill is due, regardless if the lease is a multiple year payment schedule (5-10 years).

Non of which money will improve schools I am sure.

zzyzzx says

The track record in this type of thing is poor, across the board. I'm speaking about government at all levels in all locations.

True, the tendency is to project a rosy amount of revenue. Given the somewhat improving CA economy and tax changes I would guess they will be in the ball park. A budget is just that, it is a projection and can't be written in stone on the revenue side.

Whether their projections are on target or not the situation is far more in "balance" then it has been. You can disagree on how they got there but the budget situation in CA under Jerry Brown has been stabilized... for a while.

Mark D says

California expects to take in $2.4 billion more in revenue.

How do they come up with this number? Their wishfull thinking again, I suspect.

The state needs to spend $$$ on education. Before the downturn, we were 46th out of 50th based on per pupil spending, cost of living adjusted. Our school district was facing multiple furlough days this year if Prop 30 didn't pass. My daughter has 34 kids in her class, up from 21 a few years back. There isn't any fat either to trim in the school district as teachers and administrators haven't been hired back.

Prop 30 won't improve much. It basically was a big lie. Money were not specifically assigned to improve schools. These money would go to pay unfunded pension plans. John and Ken were explaining it on their radio show.

John and Ken don't know anything about school finance nor should they propose that they do. I do, having balanced many years of school district budgets. Prop 30 stabilized the ship. Otherwise, we would have had lots of furlough days in our district. Almost an entire month of instruction. Think about that.

If they are talking about teacher pension plans, they are wrong. STRS is doing fine, especially with the recent uptick in the market. If not, they can just raise the contribution requirement from employees.

We shouldn't be taking our counsel from a couple of radio hacks that don't even know what categorical funding is.

Waitingtobuy says

Prop 30 stabilized the ship.

I am sure you missed this article:
http://www.sfgate.com/opinion/openforum/article/Prop-30-funds-for-UC-will-go-to-Wall-Street-4031472.php

I did miss this opinion piece (notice the URL). This opinion piece from the CFO of the UC system refutes the earlier opinion:
http://www.sfgate.com/opinion/openforum/article/UC-debt-swaps-avoid-risk-save-money-4038641.php

I'm not here to defend the UC system. They have made plenty of mistakes along the way, like taking more out of state students at the rejection of in state, and giving pay raises to their admins. Bad message to the voters.

I'm talking about K-12 education in the state of California.

I've met school board members and district superintendents up and down the coast. Some Democrats, some Republicans. But nearly all think education in California is underfunded and have had their eyes opened after stepping in to the position and seeing how badly education has been funded. We need adequate funding, something we haven't received from Sacramento.

Waitingtobuy says

They have made plenty of mistakes along the way, like taking more out of state
students at the rejection of in state,

Well, aren't out of state students asked to pay the full out of state/non-resident rates . After one year do they pay CA student rates?

I have a problem with the UC being sold to the highest bidder at the expense of those of us who have been taxpayers for a long time. One of the benefits to living in this state is the UC system and not having to send your kids out of state to get a world class education. You can't say that in Nevada, Oregon, or practically any of the other Western states. The state flagship universities in CA, VA, MI, and NC are all excellent.

If they limit the number of in staters with just as good or better grades than the out of staters, just so they can make more money, I think that's wrong.