Yours truly is currently in transit (traveling) through July 5 – hence, the transit picture at right. Thus, I can only give the newly-signed state budget cursory attention. As far as UC is concerned, however, there is no new news relative to prior posts on this blog. If voters don’t pass the governor’s tax initiative in November, there will be trigger cuts with UC losing $250 million. As noted in prior posts, UC tuition is frozen for the time being thanks to an added $125 million from the legislature.
Below is a table from the official budget documentation. In the current fiscal year just ending, there was a negative reserve in the general fund of -$2.7 billion at the beginning of the year. The state ran a slight deficit in 2011-12 making the reserve a bit more negative at the end of the year (June 30, 3012) to the tune of -$2.9 billion. Next year, with the help of the voters, the projection is that revenues will be $95.9 billion and expenditures will be $91.3 billion, so the state will be running a surplus of +$4.5 billion (with rounding). The surplus will replenish the reserve and raise it from its current negative condition to +$1.7 billion by June 30, 2013.
The tax initiative is estimated by the governor to produce $5.6 billion an added level of revenue from income and sales taxes. If the initiative fails, there will be trigger cuts of $6 billion. Not clear why the trigger and initiative amounts don’t match. But in fact there are varying estimates of what the taxes would bring in. And all the numbers are forecasts based on assumptions that may or may not materialize.
$ Millions 2011-12 2012-13
Reserve at start of year -$2,685 -$2,882
Revenue & Transfers* +$86,830 +$95,887
Expenditures -$87,027 -$91,338
Surplus or Deficit** -$197 +$4,549
Reserve at end of year -$2,882 +$1,667
*The word “transfers” is part of the reason budgetology in Sacramento is a fuzzy art. Money that slides in and out of the general fund really is not the same as what you think of as revenue.
**We use common English here. Surplus = inflow > outflow. Deficit is the opposite. Sacramento-speak is fuzzier when it comes to use of the terms surplus and deficit.
Source: http://www.dof.ca.gov/documents/FullBudgetSummary_web.pdf.
Note: Initial reports indicated a line item veto of certain funds going to Cal Grants at private, for-profit colleges. However, the LA Times has a vague statement about cuts of financial aid at public universities. Clarification is needed.
See http://www.latimes.com/news/local/la-me-state-budget-20120629,0,2122412.story. “Financial aid will also be reduced for some students using Cal Grants at public colleges.”
Note: The source document above says that various legislative earmarks for UC have been lifted to give UC more flexibility. This was part of the governor’s original proposal but some documents as the legislature was revising the budget seemed to indicate that such flexibility had been removed. Some further investigation as to what finally happened will be needed.
