Governors, Legislatures, and Budgets: Diversity across the American States

By Edward J. Clynch; Thomas P. Lauth | Go to book overview

dollar effect since the population is large and benefits have to be paid. Court cases also have impacts: one case alone cost the state $50 million.

In 1986 California was the only state that had automatic cost-of-living adjustment for welfare recipients. Most recipients get benefits as entitlements; to change those costs the law must be changed. In the discretionary programs, such as mental health, alcohol rehabilitation, and job welfare, clients and their associated interest groups resist cuts. The governor's last review in May gives the department one last chance to check the present-year indicators against the budget year, which will begin in two months, to see if any drastic modifications are needed. History with the program this year is an aid to calculation for the next year.

Education makes up a little over half the state budget. It has been one of the present governor's high priorities. Moreover, the educational establishment is not "beholden" to the governor in the same way as the secretary of health and welfare is. If California's state universities get cut, they go to the legislature to get the cuts restored, whereas health and welfare cannot easily go to the legislature, since their secretary is appointed by the governor.

If the sense of fiscal control is different, the decision criteria are just as concrete. Education budgets are driven by average daily attendance, full-time equivalent positions, and workload. Price inflation is also a crucial budget factor for the education budget. Thus, the price inflation guidelines issued with the budget letter are an important tool for this area. In 1986, for example, price inflation for periodicals was estimated at 17.6 percent and serials at 20.7 percent. In a lean year the university system may have to absorb the cost of inflation.

In general, in a lean year, where education has come up with a rational budget but revenues are inadequate, cuts have to be made. Since cost-of-living adjustments are easiest to revise, they are cut first. Cuts are then made in new programs, followed by program expansions before going into the base. Base evaluation takes more time. In education, workload increases are automatically included; new programs and changes in program intensity are therefore the most vulnerable. Price adjustments are the easiest to make; the more difficult decisions involve deciding on new programs where no one can tell one way or the other and turning back "turkey" proposals that have a lot of political support. Typical issues in the education area involve student fees, faculty salaries, facility maintenance, deferred maintenance, replacement of instructional equipment, K-12 student performance on standardized tests, student aid programs, the role of the community colleges, Proposition 13, and who should now pay for what. Although the level of commitment may be altered from year to year, the demand for service will not disappear.


SUMMARY

California is like a giant in shackles, but the shackles are of its own choosing-- caseload, enrollment, population. The budget tends to change incrementally with the economy since the factors that make it up change with the economy in a

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