California Budget Perspective 2018-19 SCOTT GRAVES, DIRECTOR OF RESEARCH MARCH 11, 2018 NATIONAL ASSOCIATION OF SOCIAL WORKERS – CALIFORNIA CHAPTER LEGISLATIVE LOBBY DAYS EVENT, SACRAMENTO
calbudgetcenter.org
Most state dollars spent through the California budget (70%) support health and human services or education.
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More Than 7 in 10 State Dollars Support Health and Human Services or Education Proposed 2018-19 General Fund and Special Fund Expenditures = $187.8 Billion Health and Human Services
32.5%
K-12 Education
29.4%
Higher Education
8.3%
Corrections
7.8%
Transportation
7.1%
Other*
7.1%
Environment and Natural Resources
3.9%
Legislative, Executive, and Judicial
3.9%
$0
$5
$10
$15
$20
*Includes Business, Consumer Services, and Housing; Labor and Workforce Development; Government Operations; and General Government. Source: Department of Finance
$25
$30
$35 | 3
California is projected to spend over $100 billion in federal funds through the state budget in 2018-19.
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Federal Funds Account for More Than One-Third of California’s State Budget Total Proposed 2018-19 Expenditures = $296.2 Billion
Federal Funds 35.7%
State General Fund 44.5%
State Bond Funds 0.8% State Special Funds 19.0% Source: Department of Finance
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More Than 7 in 10 Federal Dollars Spent Through the State Budget Support Health and Human Services Federal Funds Estimated to Be Spent Through the State Budget in 2018-19 = $105.9 Billion
Health and Human Services
74.0%
K-12 Education
7.1%
Labor and Workforce Development
6.3%
Transportation
5.4%
Higher Education
4.9%
Other*
2.3% $0
$10
$20
$30
$40
$50
* Includes Environmental Protection; Legislative, Judicial, and Executive; Corrections and Rehabilitation; and other state budget categories that account for relatively small shares of federal funds. Source: Department of Finance
$60
$70
$80
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For most Californians, wages have not been keeping up with the state’s rising cost of living.
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California’s Low- and Midwage Workers Have Seen Only Modest Gains Since 1979 Percent Change in Inflation-Adjusted Hourly Wages for Workers Ages 18-64 50%
+44.2%
40
High-Wage (90th Percentile) Midwage (50th Percentile)
30
Low-Wage (10th Percentile)
20 10
+6.5% +3.4%
0 -10 -20
‘79 ‘81 ‘83 ‘85 ‘87 ‘89 ‘91 ‘93 ‘95 ‘97 ‘99 ‘01 ‘03 ‘05 ‘07 ‘09 ‘11 ‘13 ‘15 ‘17
Note: Figures reflect 2017 dollars. Source: Economic Policy Institute analysis of US Census Bureau, Current Population Survey data
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Workers’ Earnings Have Not Kept Pace With Rents in California Percent Change in Inflation-Adjusted Median Rent and Median Annual Earnings Since 2006 15%
+13.2%
Median Household Rent Median Annual Earnings
10
+4.1%
5
0
-5
2006 2007 2008
2009
2010
2011
2012
2013
2014 2015
2016
Note: Median annual earnings for individuals working at least 35 hours per week and 50 weeks per year. Excludes workers with $0 or negative total earnings. Source: Budget Center analysis of US Census Bureau, American Community Survey data
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The Governor proposes to deposit $3.5 billion more than required into the state’s rainy day fund, bringing the fund balance to $13.5 billion.
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Budget Proposal Calls for Bringing the Rainy Day Fund to Its Maximum Level Governor Proposes an Extra $3.5 Billion Beyond What Proposition 2 Requires in 2018-19
* 2017-18 estimated and 2018-19 projected. Source: Department of Finance
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The Governor’s proposed budget continues the recent trend of reinvesting in K-12 and higher education.
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Due to Higher Revenues, 2018-19 Spending Per Student Would Be More Than $3,400 Above 2011-12 K-12 Proposition 98 Spending Per Pupil, Inflation-Adjusted Prop. 30 passed in Nov. 2012 $10,012
$11,403
$9,730 $7,998
* 2017-18 estimated and 2018-19 proposed. Note: Figures reflect 2018-19 dollars and exclude spending for adult education, preschool, and child care. Prop. 98 spending reflects both state General Fund and local property tax dollars. Source: Legislative Analyst's Office
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State Spending Per Student at CSU and UC Remains Well Below Pre-Recession Levels, Despite Recent Increases Direct General Fund Expenditures Per Full-Time Student, Inflation-Adjusted $20K
University of California $17,266
California State University
16
12 $9,699
$11,842 $10,525
8 $7,764 $6,178 4
05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17* * Estimated. Note: Figures are in 2016-17 dollars and reflect "full-time equivalent" enrollment, which accounts for credits taken by each student relative to a full-time course load. Data exclude indirect state funding for CSU and UC attributable to Cal Grant tuition and fee payments. Source: Department of Finance, California State University, and University of California
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The Governor proposes modest increases for child care and preschool, but total state funding would remain below the pre-recession level.
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Annual Funding for Child Care and Preschool Remains Well Below the Pre-Recession Level Total Funding for Subsidized Child Care and Preschool in California (Billions), Inflation-Adjusted $3.9B $3.6B $3.4B $3.1B
$3.2B
Support and Quality Programs Slots
$2.7B $2.6B
$2.5B
2007-08 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 Enacted Enacted Enacted Enacted Enacted Enacted Enacted Proposed Note: Figures are in 2018-19 dollars and include federal and state funds for slots as well as for quality and support programs. Child care includes CalWORKs and non-CalWORKs programs. Preschool excludes Transitional Kindergarten. Source: California Department of Education and Department of Finance
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The Governor’s proposed budget does not increase CalWORKs or SSI/SSP cash assistance levels.
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Without an Increase in 2018-19, CalWORKs Grants Will Be Below the Deep-Poverty Line for the Eleventh Straight Year Annualized Maximum Grant for a Family of Three as a Percentage of the Federal Poverty Line 60%
54.5%
41.2% 40
Below 50% of the federal poverty line = “deep poverty”
20 18
20 16
20 14
20 12
20 10
20 08
20 06
20 04
20 02
20 00
19 98
20
Note: Grants are for high-cost counties. The proposed 2018-19 budget does not increase grant levels. Source: Budget Center analysis of Department of Social Services, US Department of Health and Human Services, and US Social Security Administration data
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Due to State Cuts, SSI/SSP Grants Are Only $4 Per Month Higher Than in 2009 and Remain Below the Poverty Line Maximum Monthly Grant for Individuals Age 65 or Older or Who Have a Disability $1,200
Federal Poverty Line Federal Portion (SSI)
1,000
$907
$911
State Portion (SSP)
800
600
$750
$674 400
200 $233 0
$171
$171
$156
$156
$156
$156
$156
$161
$161
Jan '09 Jan '10 Jan '11 Jan '12 Jan '13 Jan '14 Jan '15 Jan '16 Jan '17 Jan '18
Note: The federal cost-of-living adjustment (COLA) for the SSI portion of the grant is projected to be 2.6% ($20 per month) effective January 1, 2019. The Governor’s proposed 2018-19 budget does not include a state COLA for the SSP portion of the grant in 2019. Source: Department of Social Services and US Department of Health and Human Services
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Even with recent criminal justice reforms, state spending on corrections remains high.
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The Number of Adults Incarcerated at the State Level Is Projected to Decline by Just 5% From 2017 to 2022 As of June 30 of Each Year 175K 150 125
173K Women Men 135K
131K
124K
100 75 50 25 0
'07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 '18* '19* '20* '21* '22*
* Projected. Note: Data reflect individuals housed in a range of facilities, including (but not limited to) prisons operated by the State of California and out-of-state correctional facilities. Source: California Department of Corrections and Rehabilitation
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State Support for the Department of Corrections and Rehabilitation (CDCR) Is Up Substantially From 2012-13 Inflation-Adjusted General Fund Dollars in Billions $11.9
12 $11.0
$10.9
$11.3
$11.7
$10.4 10
Capital Outlay Local Assistance
$9.8
State Operations 8
6
4
2
0
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18*
2018-19*
* 2017-18 estimated and 2018-19 proposed. Note: Effective July 1, 2017, the CDCR assumed responsibility for operating 24-hour inpatient psychiatric care in three prisons. This change increased CDCR spending by roughly $270 million beginning with the 2017-18 fiscal year. Figures reflect 2018-19 dollars. Source: Department of Finance
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Spending Per Incarcerated Adult Is Up by Nearly One-Third Since 2007-08 Per Capita Cost for Adults Housed in State Prisons and Fire Camps, Inflation-Adjusted $80,729
$90K 80 70
$61,068
60 50 40 30 20 10 0
07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 15-16 16-17 17-18* 18-19*
* 2017-18 estimated and 2018-19 proposed. Note: Figures reflect 2018-19 dollars. Source: Department of Finance
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Key Issues to Watch Federal actions Legislature’s response Revenue forecast
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Details: bit.ly/PolicyInsights2018 | 25
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