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Home Publications Blogs Beat the Press Meaningless California Budget Numbers

Meaningless California Budget Numbers

Tuesday, 28 June 2011 04:50

The NYT told its readers nothing when it said that California is using an optimistic revenue assumption of an additional $4 billion in revenue next year in order to balance its budget. It is unlikely that even 1 percent of NYT readers have any idea of how large California's budget is. There is no way to assess the importance of the revenue assumptions or spending cuts discussed in this article without knowing how large the total budget is.

California spends roughly $130 billion a year, so assuming a $4 billion rise in revenue, this would be an increase approximately equal to 3 percent of the budget [corrected -- thanks GP].

One of the major reasons that the public is so ill-informed about the budget (at all levels of government) is that reporters routinely report budget numbers without any context. Since almost no one knows how big the total budget is, they don't realize that many of the items drawing attention from politicians or the media are irrelevant for all practical purposes.

For example, the $1 million Woodstock museum that Senator McCain made a major prop of his 2008 presidential campaign cost 0.00003 percent of the federal budget. If the media had made a point of putting this cost in the context of all federal spending, it is likely that Mr. McCain would have been forced to find a more substantial item in the budget to make an argument about government waste.

Comments (5)Add Comment
written by GP, June 28, 2011 7:54
California's budgets are for one year. By saying that the state "approves 2-year budgets" you give the incorrect impression that the state, similar to Texas, adopts biennial budgets. The $4 billion of improved revenue in the budget spans one year. However, the NYT article is confusing by saying that it faces a $5 billion deficit in the "2012 fiscal year". Actually, the budget being voted on today is for fiscal 2012. If there is a projected deficit for the next fiscal year, it would be for fiscal 2013, which begins on July 1, 2012.
written by fuller schmidt, June 28, 2011 11:20
It seems like lamestream reporters will never report thoroughly and in context again.
written by diesel, June 28, 2011 12:04
In the interest of fairness, the media should have devoted 0.00003% of it's presidential campaign coverage to the Woodstock Museum item--or printed the story at 0.00003% of normal font size.
Time Scales
written by Cujo359, June 28, 2011 4:20
Something I've had a problem with for quite some time with how the press covers budgets is that they don't make distinctions between the time periods particular budget sums cover. The health care reform debate was full of discussions about all the trillions of dollars spent or saved, but seldom mentioned that these were projected for ten-year periods. In contrast, defense budgets and other discretionary items are generally discussed as year-to-year costs, except for savings projected out for future years.
University of California Wage Concessions Narrow Deficit Gap
written by Milan Moravec, June 28, 2011 8:48
University of California faces massive budget shortfalls. It is dismaying Calif. Governor Brown. President Yudof and Board of Regents have, once again, been unable to agree on a package of wage, benefit concessions to close the deficit.
Californians face foreclosure, unemployment, depressed wages, loss of retirement, medical, unemployment benefits, higher taxes: UC Board of Regents Regent Lansing, President Yudof need to demonstrated leadership by curbing wages, benefits. As a Californian, I don't care what others earn at private, public universities. If wages better elsewhere, chancellors, vice chancellors, tenured, non tenured faculty, UCOP should apply for the positions. If wages commit employees to UC, leave for better paying position. The sky above UC will not fall.
Californians suffer from greatest deficit of modern times. UC wages must reflect California's ability to pay, not what others are paid. Campus chancellors, tenured & non-tenured faculty, UCOP are replaceable by more talented academics
Wage concessions for UC President, Faculty, Chancellors, Vice Chancellors, UCOP:
No furloughs
18 percent reduction in UCOP salaries & $50 million cut.
18 percent prune of campus chancellors', vice chancellors' salaries.
15 percent trim of tenured faculty salaries, increased teaching load
10 percent decrease in non-tenured faculty salaries, as well as increase research, teaching load
100% elimination of all Academic Senate, Academic Council costs, wages.

(17,000 UC paid employees earn more than $100,000)

Overly optimistic predictions of future revenues do not solve the deficit. However, rose bushes bloom after pruning.

UC Board of Regents Sherry Lansing, President Yudof can bridge the public trust gap by offering reassurances that UC salaries reflect depressed wages in California. The sky will not fall on UC

Californians are reasonable people. Levy no new taxes until an approved balanced budget: let the Governor/Legislature lead - make the tough-minded (not cold hearted) decisions of elected leadership. Afterwards come to public for continuing, specified taxes.

Once again, we call upon UC President, Chancellors, Vice Chancellors, Faculty, UCOP to stand up for California and ‘pitch in’ for Californians with wage concessions.

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.