As The Bee's three-part series that concluded Tuesday showed, it took a team effort to bring California's government to the brink of insolvency. The financial panic and meltdown of 2008 was a major cause of the current debacle. But decades of mismanagement of revenues, spending and mandates by politicians and the voters helped set the stage for what is happening today.
In short, California's appetite for public services – expressed by its politicians and its electorate – is greater than its willingness to pay for those services.
Amid all that, however, one fact jumped out at us: The state's general fund spending as a percentage of the economy is as low today as it has been for a generation.
In the current budget year, California is spending $5.50 from its general fund for every $100 of personal income in the state. That's lower than it has been since the early 1990s and significantly lower than the trend since the late 1970s, when the state spent down a big surplus to cushion local governments and the schools from the effects of property tax-cutting Proposition 13.
Since then, spending as a share of the economy has declined in bad times and risen in good times, but it generally stayed between $6 and $7 for every $100 in income. After the latest dip, spending will probably recover, but it might take several years to get to the $7 figure again.
Why is this important? Because citizens should know that, contrary to some assertions, California spending is not out of control. Yes, pressures built into the constitution and state law trigger automatic spending increases that exceed the growth of tax revenue in bad times. These triggers can and should be fixed so that spending growth follows a more even line through good times and bad.
But California's general fund is taking a smaller bite from the economy now than it has in all but one year since 1975. That's a detail worth remembering the next time some politician calls for further cuts in taxes and spending.
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