State of the State: California in 2011

This is the first of a ten-part series on the 2011 State of the State (SOTS) speeches in states with the ten worst projected relative budget deficits for FY 2012. Budget data is from the Center on Budget and Policy Priorities’ (CBPP) recent budget report, and SOTS speech text is from Stateline. CBPP’s data on states’ FY 2012 budget deficits as a percentage of their FY 2011 budget is the benchmark for relative budget deficits.

According to CBPP, California has the highest projected absolute budget deficit in the United States in FY 2012 totaling over $25 billion, and the fifth worst projected relative budget deficit in FY 2012 equaling 29.3 percent of its FY 2011 budget.

On January 31, 2011 California Governor Jerry Brown delivered his 2011 SOTS speech (full text available here). Gov. Brown’s SOTS speech is unabashedly blunt. He says the legislative session will be “extraordinarily difficult and wrenching,” and describes California’s crisis as “real and unprecedented.” In his speech Brown acknowledges a broad range of policy concerns, such as: job creation, renewable energy, healthcare, prisons, transportation, water, public pensions, innovation and education. Below are the specific policy highlights of his speech.

  • Government Reform: He proposes restructuring the criminal justice system, realigning responsibilities of state and local government and streamlining state government.
  • Spending Cuts: He communicates that budget cuts are possible for K-12 and higher education, prisons and local public safety and health programs. Gov. Brown also acknowledged public redevelopment agencies may be eliminated, though current projects and bond indebtedness would be honored.
  • Tax Increases: He proposes temporarily extending current tax increases and wants to put the tax measure on the ballot to ensure a public mandate. The desire for a public mandate on tax increases was unique and pervasive through his SOTS speech.

Gov. Brown signals his interest in using a wide range of policy tools to balance the state’s budget (a perennial challenge for Golden State governors); and in California especially, policymakers at all levels of government need to be innovative to address the state’s staggering fiscal challenges in 2011 and beyond (California faces projected annual deficits of $20 billion each year through FY 2016).

For Reason Foundation’s recent work on California see here, here and here. For more, see the recently published State Budget Reform Toolkit, which contains many specific tools that can be used to reduce spending and maintain (or even improve) the quality of public service delivery.