Budget Information

Budget Information

The Egg McMuffin & The State Budget - June 2, 2011




Join Senate President Pro Tem Darrell Steinberg and Chancellor Jack Scott for a webinar tonight at 7 p.m.



Dear Colleagues,

Have you tried eating at the airport lately?

On Friday, I was catching a 7am flight to a family wedding in Dallas, which meant eating breakfast at the airport. However, the restaurants all now have calories posted next to what was already, shall we say, subpar food. In Sacramento, most of the breakfast items were 800-1200 calories, so I ended up waiting until a connecting flight in Los Angeles to grab a 300-calorie Egg McMuffin. Frankly, without the caloric information, I would have gone for the 800-calorie huevos rancheros from La Salsa.

That direct risk-reward feedback of connecting the "risk" of higher calories to the "reward" of a tastier dish is what we need to develop consensus for a balanced approach to the state budget. The failure to balance our budget is due to our failure to connect these necessarily correlated attributes.

Our structural budget problem can be blamed on Democrats (and Republicans) promising new programs without long-term ability to pay for them, Republicans (and Democrats promising tax cuts without the long-term ability to pay for them and Governor Schwarzenegger, for his promise that if we only borrowed enough money (Proposition 57) to get through the downturn starting in 2001, we would emerge okay. In fact, we still owe $7.1 billion from that borrowing to paper over the structural problem in 2004.

Frankly, as voters in California, we want to eat the huevos rancheros with the calories of an Egg McMuffin. At least that's my interpretation of the latest poll from the Public Policy Institute of California.

The budget problem

The public understands the state has a major budget problem, with 70% answering that it is a "big problem." And, they want to be part of the decision-making to balance the budget--77% believe California voters should be able to make some of the decisions.

Would you pay more taxes..?

  • To maintain current funding for K-12 public education: 69% yes
  • To maintain current funding for higher education: 56% yes
  • To maintain current funding for health and human services: 57% yes
  • Those three program areas account for 85.3% of the 2010-11 budget.

  • To maintain current unding for prisons and corrections: 19% yes
  • Corrections spending accounts for 10.3% of the state budget. As you likely know, the United States Supreme Court held last week that California either has to release prisoners or spend billions more to house them in order to be in compliance with the Eighth Amendment's prohibition against cruel and unusual punishment.

    We may not want to spend more money on prisons but, let me tell you, the only thing less popular than spending more on prisons is releasing prisoners.

    Which tax increase would you accept?

    Meanwhile, of all the "big" taxes, none are popular with the voters:

  • Personal income tax: 38% favor
  • State sales tax: 25% favor
  • Vehicle license fees: 34%
  • Sales tax extension to services: 39%
  • Governor Brown's plan?

    Voters say that they will pay more in taxes to avoid cuts in all major state services except prisons. However, when asked about specific taxes, nobody really wants to see them raised. (The "easy" ones--tax the rich, hit the oil companies, hit smokers and drinkers--that are almost always popular but don't yield enough revenue to close the gap were not polled.)

    Beyond that, 64% favor the governor's budget plan to extend temporary tax increases and make significant state cuts. Even more, 68%, think it's a good idea to let the voters approve the tax and fee package that is part of the governor's plan that they favor.

    However, when asked if they would actually approve the items they approve of in the governor's budget and want to see on the ballot, only 41% say they will vote to support the package. And, then, in the next question, 79% are very concerned or somewhat concerned about the additional cuts to services that would follow.

    In the end...

    It's easy to criticize Democrats and Republicans in the State Legislature for the last decade of perennial budget problems. We have not cut deeply enough, not raised taxes enough (or cut them too much), and have borrowed too much. However, the responsibility is really ours because we want our Huevos Rancheros for the calories of an Egg McMuffin.

    That's what this budget fight is all about, and it's really the same conflict we face in our daily lives.


    Scott Lay
    President and Chief Executive Officer, The League
    Orange Coast College '94

    Community College League of California
    2017 O Street, Sacramento, California 95811
    916.444.8641 . www.ccleague.org

    Budget Information
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    Pippa Gibson
    Phone: 408.864.8936

    Last Updated: 6/2/11