9 ms·

There are two ways CA could be doing less for its citizens. They could be raising less money, or spending it more wastefully. The writer seems to assume all t

• mkr-hn 16y ago
  I don't know much about economics, so I'm probably missing something obvious. How is revenue linked to how much a government is doing for its people?
  • achompas 16y ago
    Government revenue (usually: taxes) funds the services governments provide for its people. Example: USPS has seen slow/negative net revenue growth, so they're considering cutting Saturday service.
    • mkr-hn 16y ago
      That much I knew. But my thinking was that the amount spent and how was a better indicator. If they bring in $5000 in revenue and buy $5000 in golden toilet seats, it's not being spent well. But if that $5000 is going to needed books for schools, it's good.
      • achompas 16y ago
        Agreed. But given that 49 out of 50 states were struggling to fall under budget this past year, we can safely say they're cutting the useful stuff now. Great anecdote from NY State on a recent episode of This American Life ("Social Contract"): Arizona sold their state capitol to cover costs, and now pays rent to use the building.
      • pmb 16y ago
        States can't run a deficit. Money in can never be greater than money out.
        • mkr-hn 16y ago
          I don't think I'm being as clear as I should be. I'll see if I can rephrase it tomorrow. Trying to think economics at this time of night often proves hazardous for me. :)
        • Retric 16y ago
          That ignores unfunded liabilities. A state can easily under fund a pension system.
      • barrkel 16y ago
        It's only good if the books are genuinely worth $5000. That was one of the interesting things that came up with Feynman's time vetting school books in California: http://www.textbookleague.org/103feyn.htm http://www.textbookleague.org/103feyn.htm At first we weren't supposed to talk about the cost of the books. We were told how many books we could choose, so we designed a program which used a lot of supplementary books, because all the new textbooks had failures of one kind or another. [...] [During my time on the commission,] there were two books that we were unable to come to a decision about after much discussion; they were extremely close. So we left it open to the Board of Education to decide. Since the board was now taking the cost into consideration, and since the two books were so evenly matched, the board decided to open the bids and take the lower one. Mr. Norris, the Pasadena lawyer on the board, asked the guy from the other publisher, "And how much would it cost for us to get your books at the earlier date?" And he gave a number: It was less! The first guy got up: "If he changes his bid, I have the right to change my bid!" -- and his bid is still less! Norris asked, "Well how is that -- we get the books earlier and it's cheaper?" "Yes," one guy says. "We can use a special offset method we wouldn't normally use . . ." -- some excuse why it came out cheaper. The other guy agreed: "When you do it quicker, it costs less!" That was really a shock. It ended up two million dollars cheaper. Norris was really incensed by this sudden change.
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• _delirium 16y ago
  Not an answer, but you should probably adjust by some sort of CA wage index rather than purely inflation, since a lot of things the government pays for have grown more expensive much faster than inflation (like salaries of sysadmins, and land). Looking at revenues as a percentage of state GDP would be one approximation (that would also bake in a correction for population growth). I do think it's likely they haven't decreased greatly, though--- imo a bigger factor has been that where the money is spent has shifted greatly (less on education, more on cops and prisons, for example).
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• avdempsey 16y ago
  According to Prop 13 grand-daddy Howard Jarvis, state revenues have indeed increased since Prop 13 passed (1978). We have a heckavu budget morass in California. Our ballot initiative democracy has _written into the constitution_ both spending minimums (40% of general budget from Prop 98) for education, and tax maximums. It's a massive vote of no confidence to strip our legislatures of the working room to make a budget. I'm going to agree with the letter here. Somehow, in California in the 60s, we decided as a state to build the world's best civil infrastructure. We (well my grandparents) built this to benefit residents statewide. The terms of debate have changed from what makes the best place to live, to fear or sounds-nice-but-not-right-nowism. From 2/3s majorities, to social issues, to pensions, we're in a real hole. But a rebuilt civil infrastructure is necessary, decline is obvious.
• patio11 16y ago
  Using state figures and the CPI calculator: 1965-1966: $4B nominal ($28B, constant 2010 dollars) 1982-1983: $25.3B nominal ($57.2B) 2008-2009: $144B ($145) 2009-2010: $119.2B ($119.2B) Even if you adjust for California's prodigious immigration-fueled population growth, spending per person in constant dollars has more than doubled. You spent your school years with teachers paid less and less. I feel the urge to get out numbers here, but it would be like shooting fish in a barrel.
  • _delirium 16y ago
    Those nominal budget figures vary widely from the actual budgets, though, and how much varies year to year. For example, the 2009 nominal budget is indeed $119.2b, but 2009 state revenue and expenditures are somewhere around $450b. I suppose an interesting question would be whether on versus off-budget spending was a similar or different ratio in 1965.
  • jerf 16y ago
    Budget chart: http://www.dof.ca.gov/budgeting/budget_faqs/information/documents/CHART-B.pdf http://www.dof.ca.gov/budgeting/budget_faqs/information/docu... It's from a ca.gov domain, so I'm not sure it gets much more authoritative. You can do your own analysis, but one snapshot would be 137B total spent in 2000-1 to 200B total spent in 2010-11. I chose to include federal funds on the grounds that for the topic in question, that would seem the relevant measure since a lot of those federal funds lately have been for public services, the topic in discussion. http://data.bls.gov/cgi-bin/cpicalc.pl http://data.bls.gov/cgi-bin/cpicalc.pl shows the inflation rate across that time frame as a 1.27 multiple, vs. a 1.46 multiple in California spending. You can make the numbers somewhat worse by using 2009-2010's expenditures of 221B; how fair you think that is is up to the reader, I guess. Given that our author probably still thinks that's not enough, arguably that would be a more fair demonstration of what is still apparently not enough money.
  • Locke1689 16y ago
    So I went ahead and did a calculation of my own: revenue by all taxes per capita in the state of California between 2005 and 1964. All following figures are from US census data: Total revenue from all taxes per capita 1964: $2182.85 (helpfully provided by the 1964 census). Total revenue from all taxes 2005: $146,692,000,000 Total resident population of California, 2005: 36,250,000 Total revenue from all taxes per capita 2005: $4,046.68 1964 number is also adjusted using the CPI calculator
• bokonist 16y ago
  According to this source of unknown reliability ( http://www.usgovernmentspending.com/California_state_spending.html#usgs302a http://www.usgovernmentspending.com/California_state_spendin... ) state & local spending as a percentage of state nominal GDP went from 20% to 24% from 1992 to 2009. Don't know the numbers going back to 1960, but I'd be shocked if spending was lower then. For the change in average levels of education and knowledge, the cause seems pretty obvious to me. If you extended the border of California 400 miles south into Mexico, the average state scores on tests of math, history, and English would obviously go down, simply because of the composition of the population. Similarly, if you move 10 million Mexicans into California, the average test scores of the people living within the borders of California will fall (even if there is no change in the amount of learning for one individual person). In general if you look into correlations between education spending and test scores, there is very little correlation. If you look into the correlation of ethnicity and test scores, its very significant.
  • mkr-hn 16y ago
    Here's an excerpt from the bio of the guy who runs the site: "Despite 35 years living in Seattle, I instinctively revolted against the suffocating left-coast culture of the Soviet of Washington, and came to revere the four great Germans who helped inspire the Reagan revolution: Ludwig von Mises, F.A. Hayek, Leo Strauss, and Eric Voegelin." However, he does link to real government sources (near the botton), so you can check to see if he weighs by ideology when posting numbers.
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    • yummyfajitas 16y ago
      I applaud you for making an observation which could easily fuel an ad-hominem attack on an obvious partisan, and then holding back after observing that regardless of his biases, he is just tabulating official numbers.
      • deleted 16y ago
• joe_the_user 16y ago
  I believe California currently spends a similar amount on prisons as on education. I don't believe that was the case in 1962. That would effect total spending. Whether that means California is doing more for its citizens in this way is a question one can ask.
  • callmeed 16y ago
    Err, not even close: 9.6% of the general fund on corrections/rehab programs 43.4% on K-12 education 14.3% on higher education http://www.ebudget.ca.gov/pdf/BudgetSummary/SummaryCharts.pdf http://www.ebudget.ca.gov/pdf/BudgetSummary/SummaryCharts.pd...
    • joe_the_user 16y ago
      So prisons are merely approaching the cost of higher education, sorry. (9.6% versus 14.3%).
      • callmeed 16y ago
        How do you know it's approaching? Higher education is 50% higher but I don't know if corrections is growing at a faster rate.
  • aliston 16y ago
    I've heard this point made on a per-individual basis. The numbers I found actually make it look even worse: California per-pupil spending 2008: $9,015 California’s Annual Costs to Incarcerate an Inmate in Prison: $47,102 http://blogs.sacbee.com/the-public-eye/2010/08/california-per-pupil-spending-is-32nd-in-nation.html http://blogs.sacbee.com/the-public-eye/2010/08/california-pe... http://www.lao.ca.gov/laoapp/laomenus/sections/crim_justice/6_cj_inmatecost.aspx?catid=3 http://www.lao.ca.gov/laoapp/laomenus/sections/crim_justice/...
    • hugh3 16y ago
      California per-pupil spending 2008: $9,015 California’s Annual Costs to Incarcerate an Inmate in Prison: $47,102 Why should those be, in any way, comparable? Prisoners need cells, three meals a day, healthcare, clothing, and constant supervision, 24 hours a day. Schoolchildren only need classrooms and supervision for six hours a day five days a week. And prisons can't get away with a 30:1 inmate-to-guard ratio, either. It makes perfect sense that a prisoner should cost more than a schoolkid. Of course I'm sure California prison guards are still ridiculously overpaid. My personal solution to this conundrum is to outsource California's prisons to Mexico.
• eli 16y ago
  I think this is actually a much less helpful question than you think it is. For a lot of reasons, outside factors made things like real estate and healthcare a lot more expensive for the state of california. I don't see any evidence that CA is any more wasteful than it was 40 years ago. Or, put another way, where exactly do you see an extra $100B in CA's budget?
• harshpotatoes 16y ago
  That of course assumes that the money needed provide the same services for the people grows at the same rate as the population growth. In other words, the cost per person might actually be significantly lower to provide services for 1million people than it would be to provide services for 20 million people. And maybe this isn't due to a government 'inefficiency' (mismanagement of funds), but rather an inefficiency that is inherent in the design of our cities and services (Meaning: Long term problem requiring redesign of many services in order to increase spending efficiency). So really, I think it's far more important to question: 1) How has the cost for these public services scaled with the population in the past? 2) Based on that, how do I think the cost of the these public services scale with the population in the foreseeable future? 3) Is this increase in expenditure due to wasteful mismanagement of funds, or a design problem in our cities and services?
• ohyes 16y ago
  His claim is that California is bottom of the barrel WRT the amount of money that it is reinvesting in its education system. (Hence the 'prime the pump' analogy)... This is true: http://www.statemaster.com/graph/edu_ele_sec_fin_cur_exp_pergdp-finance-current-expenditures-per-gdp http://www.statemaster.com/graph/edu_ele_sec_fin_cur_exp_per... To turn this into a 'low taxes vs high taxes' debate is kind of deceptive. I think that the point about taxes is that the debate around taxes has essentially become petty and mean-spirited. If a politician wants to raise taxes (in any way, even on the wealthiest 1 or .1%, who would barely notice), countless will bitch about it, without regard for data or reason (or common sense). It will be a knee jerk reaction. WRT to his assumptions, I don't think that he is assuming that California is not spending its money wastefully (see his mention of the penal system). There is an argument to be made, however, that it is incredibly difficult to reclaim wasteful spending that has already been done. (California is not going to pardon 60% of its prison population and close its prisons or cancel state pensions). So the expedient solution, if you believe in spending more on education and social services, would be to tax more. (but no politician in their right mind would say that).
  • moron4hire 16y ago
    The fundamental problem is that everyone has only ever focused on expedient solutions.
    • ohyes 16y ago
      I think that there is a distinction to be made here between /politically/ expedient solutions, and expedient solutions with regards to actual goals. The war on drugs, high incarceration rates, and trumpeting an ideology of low taxes are all politically expedient, but not necessarily expedient with regard to what we actually want to achieve. In an optimization problem, a nearest neighbor algorithms will generally produce a sub-optimal, but okay result. This is only true, however, if your nearest neighbor algorithm is using the correct selection heuristic... Garbage in, garbage out. Our political system needs a new heuristic. (Assuming P!=NP, and that the governance of California is an NP hard optimization problem...)
• aaronbrethorst 16y ago
  Apparently this professor is better acquainted with the definition of the word posterity than Paul Carr. Thanks again for pointing that out the other day.
• 3d3mon 16y ago
  If you try your hand at this "armchair budget analyst" game, you'll learn that its easier practically and politically (yes, politically) to just raise the money, especially in a state like CA: http://www.latimes.com/news/local/la-statebudget-fl,0,95571.htmlstory http://www.latimes.com/news/local/la-statebudget-fl,0,95571.... To be fair, the CA real estate boom/bust really did a number on the state's coffers. To ignore the impact of the "great recession" is to not see the problem accurately. The govt relied on increasing property tax revenue that disappeared as quickly as the monopoly money used to pay for it (aka subprime loans) and on state income taxes and sales taxes from workers who quickly lost their real estate bubble jobs. If those workers still had their jobs and homeowners still had their homes, we'd find something else to complain about. Moral of the story is be careful when playing with credit.
• kds 16y ago
  Not just less or more inflation-adjusted revenues and their spending as absolute sums - the per-capita values impacted by the population growth would be even more informative.
• nanospider 16y ago
  Looks like there's a Ycombinator startup idea in here somewhere!