Newsom’s 2020-21 Budget – A Big Pie, But Empty Calories

Governor Newsom has unveiled his budget proposal for the fiscal year 2020-21, and it comes in at a whopping $222 billion. That’s up from $209 billion last year, and sharply up from a few years ago. Backing up a decade, the 2010-11 budget totaled $130 billion. What on earth could justify a 70 percent increase in spending in just ten years?

Shown below is the shocking growth in California’s state budget over the past forty years. The chart includes not only general fund spending, along with special funds and bonds, but also federal funds which are not included in the $222 billion total, but which are administered by the state and spent in California.

As can be seen, the growth hasn’t been uniformly up. There was a drop during the mild recession in the mid 1990s, another one in 2004-2005, and a plunge during the great recession that affected 2011 through 2014. But overall, spending growth over the past 40 years looks a bit like the proverbial hockey stick.

To have a fair discussion of spending growth in California, however, it is necessary to adjust for population growth and the impact of inflation. That is not a problem, since population data, CPI trends, and historical budgets are all easily found online. Back in 1977 California’s population was 21.9 million, and the CPI was 56.9. For the last five years, California’s population has hovered just under 40 million, growing by only a half million in […] Read More