Joe Mathews: General fund to California: Stop abusing me!

Published: Thursday, May. 8, 2014 - 12:00 am

It’s time for you to stop picking on me, California.

For most of the past dozen years, I was badly in deficit. I heard all the talk – about how my shortfalls were hurting children, about how I was unmanageable, and about how my inadequacies were compromising the future of the state.

I tried to be the bigger guy and not take it personally. I’m the financial backstop of the state, responsible for its core government functions – educating, medicating and incarcerating. And what was my pain – a 20 percent decline in my spending, adjusted for inflation and population – compared to the pain of laid-off teachers, college kids facing 100-percent tuition-fee increases, and low-income families who lost childcare?

Now, as California enters a new budget season, things are supposed to be different. I’m back, exceeding expectations and producing projected surpluses for years to come. But you know what? You Californians are still talking smack about me.

You say that I can’t be trusted, that I’ll slip back into deficit. My problem, as you tell it, is that my revenues swing too wildly up and down, and that I spend too much in good times. I say my real problem is that I’m misunderstood. People talk about me as if I were some sprawling, unfocused slush fund for every crazy government idea. Nothing could be further from the truth: More than 85 percent of my roughly $100 billion goes to schools, health and social services, and corrections.

The naysayers seem to be confusing me with the state budget. But I’m just a piece of him – about two-thirds of his $150 billion. People should be worrying instead about that other $50 billion that is tied up in hundreds of state special funds.

Those funds – separate accounts for everything from beverage container recycling to fish and game preservation – aren’t just special. They’re positively insufferable. During the bad budget years, some of these special accounts were adding money because of their dedicated revenue streams. As I struggled to pay for basic health programs, a separate, voter-approved fund for mental health programs was awash in cash. My per capita spending fell to a level not seen in more than two decades, while special funds spending set records.

Californians, do you ever wonder why, if the government is taking more of your money for taxes, there’s still so little for core services? Here’s your answer: That money was going to various special funds instead of the general needs I support.

This shift to the special is so pervasive that it’s affecting my own money. There are all kinds of formulas and “special accounts” inside the general fund that dedicate funds for favored purposes. All of these internal regulations have tied me in such knots that, if I were in a business, I’d move to Texas.

Who is doing this to me? Let me answer that question with a question. Have you ever had a boss who had unreasonably high expectations, didn’t provide enough resources, was a sucker for any idea that could be sold as reform, and changed her mind all the time? Well, I do. And that boss is you: the people of California.

You cut local taxes and then tap me to backfill the money for local services. You borrow money to give to children’s hospitals and stem cell researchers, and force me to repay the debt.

And you believe the powerful people and interests when they lie about me. They say I represent uncontrollable spending, even though my spending is among the lowest of any state. They say I’m centralized in Sacramento, even though three-quarters of my money goes to local governments. And I’ve been denounced as “dangerously volatile” by so many people that you’d think I’m the fiscal Chris Brown.

It’s true that I can be volatile. But look in a mirror, Californians – so are you. Taxes on your up-and-down personal incomes make up two-thirds of me.

Instead of changing a tax system that only adds to my volatility, you Californians embrace “reforms” that just diminish me. The rainy day fund proposals now being debated, like the “realignment” of certain state programs to counties three years ago, would take billions out of my coffers.

I realize that the odds are stacked against me. Everything that’s general – from general-interest media to the general store and the general hospital – is being torn apart by powerful niches.

But that doesn’t change the fact that you need me. I’m the one piece of state government that serves all. And in the future, I’m the guy who will have to pay the big, unfunded bills you’ve run up for teacher pensions and retiree health care.

I’ve got your back, California. Isn’t it time that you had mine?


Joe Mathews writes the Connecting California column for Zocalo Public Square.

Read more articles by The General Fund of the State of California



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