As we muddle are way through this unwelcomed economic recession, progress toward recovery remains slow. The good news - California has recovered about 28.4% of the jobs lost during the Recession the bad news – we still have 71.6% to go to get back to where we were some 4 years ago. California has been one to the states hit the hardest by the economic downturn and trails the nation in job recovery 28.4% to 40.7%.
We in the tri-county area of Marin, San Francisco, and San Mateo are experiencing similar unemployment rates of just under 8% however; the unemployment average for the rest of the state is expected to hover around 12% through 2013.
In January, it was estimated that the State budget deficit would be $9.2 billion and by May, it is estimated that the gap will widen to $15.7 billion. The budget deficit has hovered around $25 billion in each of the last two years. It would seem to me that after two straight years of sizeable budget deficits there would be some watchful eyes on the third year numbers. So now we find ourselves with another year of a double-digit billion dollar deficit and what appears to be no end in sight on the growing deficit number.
If we can go from $9.2 to $15.7 billion in four months, I have to ask “how high will the deficit be” by fiscal year end. I am at a loss in understanding how those that are charged with “minding the store” could miss the current mark by $7.5 billion in less that 4 months time. Are our legislators spending too much time in Sacramento concerning themselves with their political party and not enough time in their district with their “ears to the ground” because it does not appear that they are aware of the economic issues occurring in their communities?
The current announcement of the Governor’s May budget calls for a total budget of $142 billion of which $49.5 billion (34.8%) is for education ($39.5 for K thru 12 and $10 for Higher Education). The May budget solution includes $6.1 billion in cuts primarily to schools. Looking at the budget from pure numbers, it would make sense to attack the 34.8% expenditure. However, if you assume that educating the current population of California youth costs about $50 billion, and then we must ask ourselves, “Can we afford to educate an increasing youth population in the future?”
There is a proposed state tax measure to be on the upcoming November ballot that would raise income and sales taxes. If the proposed tax measure fails to pass, schools will face another $5.75 billion in cuts. If we continue to experience these deficits year after year and a majority of the cuts come from education, does it not make sense that some new and creative thinking needs be employed as to how our children’s education needs are met? We at the municipal level are having to look at shared services and combined service models to address our expected service levels.
Another cut among the proposed budget reduction is $1.2 billion to Medi-Cal. In my last Council Corner, I highlighted the explosive population growth expected in the 65 and older demographic. Combining these two issues raise concerns for me not only because I am part of the senior group but because seniors have little recourse when it comes to raising alternative sources of funds to address their medical needs.
There is an adage that asks do you see the glass half-full or half-empty referring to your view as an optimist or a pessimist. When I ask myself that question when it comes to the state of our economy and what is happening or not happening in Sacramento – my answer is “I am not sure I see the glass” and Sacramento has no money to own a glass.
I would appreciate your comments on this and other issues by emailing me at email@example.com. or 650-573-7359.