The state budget isn't growing


I heard a great show on NPR the other day about the new rules on compensation for executives whose banks got federal bailout money. The feds have cracked down (a bit), and some of those massive salaries have been cut and top bankers are now accepting much less pay, and stock that can't be sold for three years.

And guess what: More than 80 percent of these people are still hard at work at their desks, including almost all of the most senior folks. Very few have left. It puts the lie to this notion that extreme salaries are needed to attract and retail the top talent; even after those salaries have been cut by more than half, the "talent" doesn't flee.

There's a new study by the California Budget Project (PDF) that says makes the same kinds of points. Jean Ross, the director of the nonprofit, nonpartisan group, says that urban legends die hard, so she's chosen the top ten myths about the state budget and demonstrated how utterly inaccurate they are.

For example, the anti-tax folks love to crow about the massive growth in state spending and how the budget is "out of control." Truth:

Current year spending is $16.9 billion below 2007-2008 levels and proposed 2010-2011 spending is $20.1 billion below  2007-2008 levels.

2009-2010 spending is $21.5 billion below the baseline levels projected by the Legislative Analysts Office in 2004.

As a share of the state's economy, state spending is at its lowest levels since the early 1970s.

And it's not just the recession:

State spending as a share of personal income has declined significantly in recent years.

And guess what: taxes aren't driving businesses out of the state -- or hampering personal wealth creation.

The number of millionaire taxpayers has increased more rapidly than the number of taxpayers as a whole since the passage of Prop. 63, which imposed an additional tax on high-income individuals.

And guess what, you bureaucracy bashers:

California ranks 41s [among the 50 states] with respect to the number of state and local government employees per 10,000 population.

So no, California doesn't have a spending problem. The state has a revenue problem.

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