California state budget
Energy policy • Public education • School choice • Public pensions • State budget • Ballot measures
|California state budget|
|State Credit Rating:||A- (as of May 2012)|
|Current Governor:||Jerry Brown|
|GF expenses:||$95.7 billion (estimated for FY 2013)|
|All funds expenses:||$227.9 billion (estimated for FY 2013)|
|Spending % Change:||14.3%|
|% from Federal Funding:||27.17%|
|Per Capita State Debt:||$20,449|
|Other state budgets|
|Alabama • Alaska • Arizona • Arkansas • California • Colorado • Connecticut • Delaware • Florida • Georgia • Hawaii • Idaho • Illinois • Indiana • Iowa • Kansas • Kentucky • Louisiana • Maine • Maryland • Massachusetts • Michigan • Minnesota • Mississippi • Missouri • Montana • Nebraska • Nevada • New Hampshire • New Jersey • New Mexico • New York • North Carolina • North Dakota • Ohio • Oklahoma • Oregon • Pennsylvania • Rhode Island • South Carolina • South Dakota • Tennessee • Texas • Utah • Vermont • Virginia • Washington • West Virginia • Wisconsin • Wyoming|
- 1 Budget process
- 2 Expenditures
- 3 Revenues
- 4 State budgets by year
- 5 Historical spending
- 6 State debt
- 7 Federal aid to state budget
- 8 Budget transparency
- 9 Accounting principles
- 10 Contact information
- 11 See also
- 12 External links
- 13 References
- A summary of the budget drafting process
- Trends in expenditures and revenues
- Current and past fiscal year budget developments
- Financial transparency measures
Between fiscal year 2009 and fiscal year 2013, California's total expenditures increased by approximately $32.4 billion, from $195.48 billion in 2009 to $227.88 billion in 2013. This represents a 16.58 percent increase, outpacing the cumulative rate of inflation during the same period (9.06 percent, calculated using the Consumer Price Indices for January 2009 and January 2013).
- Budget instructions are sent to state agencies beginning in April.
- Agencies submit their budget requests to the governor in September.
- Agency hearings are held from September through November.
- Public hearings are held from March through June.
- The governor submits his or her proposed budget to the state legislature in January.
- The legislature adopts a budget in June. A two-thirds majority is required to pass a budget. The fiscal year begins July 1.
In California, the governor may exercise line item veto, item veto of appropriations, or item veto of selected words authority.
The Governor is legally required to submit a balanced budget to the legislature. In turn, the legislature is legally required to adopt a balanced budget.
Although each state executes its budget process differently, the National Association of State Budget Officers (NASBO) breaks down state expenditures into four general categories. This allows for comparisons among the 50 states. NASBO's categories are as follows:
- General fund: "The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state."
- Other funds: "Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds."
- Federal funds: "Funds received directly from the federal government."
- Bonds: "Expenditures from the sale of bonds, generally for capital projects."
The table below breaks down expenditures for fiscal year 2013 (comparable figures from surrounding states are provided to give additional context). Figures for all columns except "Per capita expenditures" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita expenditures" have not been abbreviated.
|Total state expenditures, FY 2013 ($ in millions)|
|State||General fund||Federal funds||Other funds||Bonds||Total||Per capita expenditures|
| Per capita figures are calculated by taking the state's total expenditures and dividing by the number of state residents according to United States Census estimates.|align="left" colspan="8" | Per capita figures are calculated by taking the state's total expenditures and dividing by the number of state residents according to United States Census estimates.|
Source: National Association of State Budget Officers |}
Source: National Association of State Budget Officers
Expenditures by function
State expenditures in California can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2012 data is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percents, indicating the share of the total budget spent per category.
|Expenditures by function, FY 2012 (as percents)|
|State||Elementary and secondary ed.||Higher ed.||Public assistance||Medicaid||Corrections||Transportation||Other|
|Source: National Association of State Budget Officers|
From 2008 to 2012, elementary and secondary education spending fell by more than four percentage points, or 17.8 percent, as a share of the budget. Higher education spending also fell by 1.4 percentage points, or 16.7 percent, as a share of the budget. During the same period, Medicaid spending rose by nearly two percentage points, or 9.6 percent, as a share of the budget. The table below details changes in expenditures from 2008 to 2012. Figures are rendered as percents, indicating the share of the total budget spent per category.
|Expenditures from 2008 to 2012 (as percents)|
|Year||Elementary and secondary ed.||Higher ed.||Public assistance||Medicaid||Corrections||Transportation||Other|
|Change in %||-4.30%||-1.40%||-1.30%||1.90%||0.40%||0.50%||4.30%|
|Source: National Association of State Budget Officers|
The table below breaks down general fund revenues by source in fiscal year 2013 (comparable figures from surrounding states are also provided to give additional context). Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.
|Revenue sources in the general fund, FY 2013 ($ in millions)|
|State||Sales tax||Personal income tax||Corporate income tax||Gaming tax||Other taxes and fees||Total||Per capita revenue**|
| Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates for 2013.|
Source: National Association of State Budget Officers
The table below details the change in revenue sources in the general fund from 2009 to 2013. Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.
|Revenue sources in the general fund, California ($ in millions)|
|Year||Sales tax||Personal income tax||Corporate income tax||Gaming tax||Other taxes and fees||Total||Per capita revenue**|
|Change in %||-14.79%||44.00%||-21.26%||-66.67%||7.21%||18.63%||14.39%|
| Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates.|
Source: National Association of State Budget Officers
State budgets by year
See budget bill: AB 110
Fiscal year 2014
|California state budget -- 2014|
|California State Legislature|
|Introduced:||January 10, 2013|
|State House:||May 13, 2013|
|Vote (lower house):||53-22|
|State Senate:||May 29, 2013|
|Vote (upper house):||26-11|
|Conference:||June 14, 2013|
|Conference Vote (upper house):||28-10|
|Conference Vote (lower house):||54-25|
|Signed:||June 27, 2013|
On June 27, 2013, Governor Jerry Brown signed into law a $96.3 billion dollar budget for fiscal year 2014. Democrats applauded the budget for increasing education spending for low-income and English-learning students and expanding Medi-Cal coverage. Republicans, meanwhile, contended that the budget did too little to address the state's debt.
To explore the enacted fiscal year 2014 budget in greater detail, click here.
Fiscal year 2013
- See also: California state budget (2012-2013)
Fiscal year 2012
- See also: California state budget (2011-2012)
Fiscal year 2011
- See also: California state budget (2010-2011)
Fiscal year 2010
- See also: California state budget (2009-2010)
State budget historical spending below was compiled by the National Association of State Budget Officers. Figures reflect the reported "Total Expenditures" in Table 1. Figures for all columns are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000).
|Historical state budget spending in California ($ in millions)|
|Fiscal year||General Fund||Other funds||Federal funds||Bonds||Budget totals|
|Total||% of Budget||Total||% of Budget||Total||% of Budget||Total||% of Budget|
|General Fund: The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state.|
Other funds: Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds.
Federal funds: Funds received directly from the federal government.
Bonds: Expenditures from the sale of bonds, generally for capital projects.
According to a January 2014 report by the nonprofit organization State Budget Solutions, California had a state debt of over $777 billion. Its state debt per capita was $20,449. The report revealed that state governments faced a combined $5.1 trillion in debt, 33 percent of annual gross state product. The obligation amounts to $16,178 per capita in the nation. A bulk of the state debt -- 79 percent -- was linked to unfunded public pensions.
|Total state debt in California|
|Total state debt||$777,918,403,000||1|
|Per capita debt||$20,449||9|
|State and other fund expenditures||$120,257,000,000||4|
A 2012 report from the Pew Center on the States noted that California's pension system was funded at 78 percent at the close of fiscal year 2010, below the 80 precent funding level experts recommend. Consequently, Pew designated the state's pension system as cause for "serious concern."
The funding ratio for the state's pension system decreased from 88.78 percent in fiscal year 2006 to 77.48 percent in fiscal year 2011, a decrease of 11.3 percentage points, or 12.7 percent. Likewise, unfunded liabilities increased from just over $47 billion in fiscal year 2006 to more than $133 billion in fiscal year 2011.
States sometimes sell general obligation bonds to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). Credit rating agencies, such as Standard and Poor's, assign grades to states, evaluating their ability to pay the principal and interest on such bonds. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest. Generally speaking, a higher credit rating indicates lower risk for an investor, which in turn lowers costs for taxpayers.
The table below lists the Standard and Poor's credit rating for California from 2001 to 2012 (grades from surrounding states are provided for additional context).
|S&P credit ratings from 2001 to 2012|
Federal aid to state budget
- See also: Federal aid to budgets in the 50 states
The chart below notes how much of the state’s general revenues come from the federal government. Figures were calculated by dividing each state’s federal intergovernmental revenue into its general revenue. The number in the rightmost column indicates the state's ranking in relation to the rest of the nation (e.g., if "1," the state receives the highest percentage of federal funding in the nation). Figures from neighboring states are included to provide additional context.
State governments receive aid from the federal government to fund a variety of joint programs, such as Medicaid. Federal aid varies considerably from state to state. For example, Mississippi received approximately $7.7 billion in federal aid in 2012, which accounted for more than 45 percent of the state's general revenues. By contrast, Alaska received roughly $2.9 billion in federal aid in 2012, just under 20 percent of the state's general revenues.
|Federal aid to state budgets in 2012|
|State||Federal aid as % of general revenue||Total federal aid||National rank|
According to Recovery.gov, the official government website for the Recovery Accountability and Transparency Board, under the American Recovery and Reinvestment Act, California received $28,700,400,000.00 in federal funding between February 2009 and June 2013.
|State Controller's Office||E-Procurement||E-Budget|
|Line item expenditures|
|Public employee salaries|
|Last evaluated in 2011.|
Article 4, Section 8(b) of the state constitution requires that the “title” of a bill be read on three days in each house, although the house may dispense with this provision. This section also stipulates that a bill cannot be passed unless printed and distributed to members in its entirety first. The constitution is silent as to the amount of time between printing and distribution and when a vote may take place.
In light of the legislature's success in coming to a budget agreement in 2009, the National Taxpayers Union said that although they were pleased that lawmakers had not added new tax increases, they were concerned about fiscal reform in the state. Real fiscal reform, they said in a statement, "will not be achieved until we control government spending, and the only way to do that is if citizens know where their tax money is going -- not simply by employing accounting gimmicks to make the numbers look good." The organization was advocating for the approval of AB 400.
Following the passage of the 2011 budget, The Sacramento Bee hosted an online chat regarding the state's spending plan. The newspaper's Kevin Yamamura callled the state's budget process "opaque." He said media members did not receive information on the budget until moments before it came to the legislative floor.
The table to the right is helpful in evaluating the level of transparency provided by the state's spending database.
In November, 2011, Governor Jerry Brown ordered the shutdown of the state's Reporting Transparency Website. At that time, a message at the old site directed visitors to several other state sites that reportedly contained the same information previously.
Multi-measure budget transparency profile
The Institute of Government and Public Affairs at the University of Illinois created a multi-measure transparency profile for California, which measured state transparency as of September 2011 using indicators from a range of organizations. These indicators measured both website transparency and other recognized facets of governmental transparency. In addition, IGPA presented four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.
IGPA devised a budget transparency index based on information available from the National Association of State Budget Officers. California tied for 20th in the nation with 12 other states, earning five out of eight possible points.
|California - IGPA score for budget process, contents and disclosure|
|Budget transparency indicator||Yes or no?|
|"Generally Accepted Accounting Principles" budget|
|Binding revenue forecast|
|Legislative revenue forecast|
|Constitution or statutory tax/spend limitations|
In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.
U.S. PIRG "Following the Money" report
- See also: Following the Money 2014 Report
The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2014. The report, entitled "Following the Money," measured how transparent and accountable state websites are with regard to state government spending. According to the report, California received a grade of F and a numerical score of 34, indicating that California was "failing" in terms of transparency regarding state spending.
The state auditor reports to the Joint Legislative Audit Committee (JLAC), a 14-member committee comprised of seven Senators and seven Assembly Members. The auditor's office publishes its audit reports online.
California Department of Finance
915 L Street
Sacramento, CA 95814
Telephone: (916) 445-3878
- California government sector lobbying
- California public pensions
- Governor of California
- California State Senate
- California House of Representatives
- California State Legislature
- State Budget Solutions, California
- Department of Finance, California Budget for 2009-2010
- Department of Finance, California Budget
- California State Legislature
- California Budget Project
- Pacific Research Institute
- Independent Institute
- Model transparency legislation from the American Legislative Exchange Council is available here
- National University System Institute for Policy Research
- U.S. PIRG, "Report: Transparent & Accountable Budgets," April 8, 2014
- The New York Times, "Battles loom in many states over what to do with budget surpluses," February 3, 2014
- Center on Budget and Policy Priorities, "Policy Basics: The ABCs of State Budgets," February 7, 2013
- The Los Angeles Times, "The worst budget mess ever," January 11, 2010
- The Appeal Democrat, "Schoolkids, public employees prime budget crisis victims," January 25, 2009
- The Napa Valley Register, "California's budget disaster," January 22, 2009
- The Los Angeles Times, "California's budget breaking point," January 15, 2009
- California National Organization for Women, "2009 California State Budget Crisis Worsens," January 7, 2009
- The San Francisco Chronicle, "California's budget mess gets worse," November 14, 2008
- Refers to General Fund spending. Typically in state budgets the General Fund is spending that is most directly controlled by state legislators.
- This figure is derived by calculating the percent difference between the prior two years' spending levels according to the National Association of State Budget Officers.
- Bureau of Labor Statistics, "CPI Detailed Report Data for February 2014," accessed April 9, 2014
- InflationData.com, "Cumulative Inflation Calculator," February 28, 2014
- National Conference of State Legislatures, "State Experiences with Annual and Biennial Budgeting," updated April 2011
- National Association of State Budget Officers, "Budget Processes in the States, Summer 2008," accessed February 21, 2014
- National Association of State Budget Officers "State Expenditure Report, 2011-2013," accessed February 21, 2014
- United States Census Bureau, "Annual Estimates of the Resident Population: April 1, 2010 to July 1, 2013," accessed February 26, 2014
- National Association of State Budget Officers, "State Expenditure Report, 2009-2011," accessed February 24, 2014
- National Association of State Budget Officers, "State Expenditures Report, 2010-2012," accessed February 24, 2014
- National Association of State Budget Officers, "State Expenditure Report, 2009," accessed February 24, 2014
- National Association of State Budget Officers, "State Expenditure Report, 2008," accessed February 24, 2014
- United States Census Bureau, "Vintage 2009: Annual Population Estimates," accessed February 26, 2014
- The Sacramento Bee, "Jerry Brown signs California budget bill," June 27, 2013
- State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
- Washington Examiner, "EXography: Unfunded public employee pensions drive state debts skyward," January 21, 2014
- State Budget Solutions "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
- Pew Center on the States, "Widening Gap Update: California," June 18, 2012
- California Public Employees' Retirement System, "2012 Comprehensive Annual Financial Report," accessed November 25, 2013
- California State Teachers' Retirement System, "2012 Comprehensive Annual Financial Report," accessed November 25, 2013
- University of California Retirement Plan, "2012 Actuarial Valuation Report," accessed November 25, 2013
- Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012
- United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014
- Recovery.gov, "Stimulus Spending by State," accessed February 21, 2014
- National Taxpayers Union, "California Finally Agrees on Budget," July 22, 2009
- The Sacramento Bee, "Budget Q&A: California budget process still secretive," July 10, 2011
- GovTech.com, "Calif. Transparency Website Shuttered," November 3, 2011
- Institute of Government and Public Affairs at University of Illinois, "Home page," accessed February 21, 2014
- Institute of Government and Public Affairs at University of Illinois, "Budget Transparency Profiles - All 50 States," September 2011
- U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014
- California State Auditor, "About Us," accessed October 9, 2009