This story was reported for the San Diego News Network on March 11, 2010.
Though California Controller John Chiang’s latest report shows an increase in revenue, one tax board representative said the Golden State won’t recover for another few years.
Here’s your Thursday collation of all things California budget-related.
Slow, slow recovery: A California tax board representative told one publication the state won’t recover from its budget deficit until 2015.
According to the Ukiah Daily Journal, the president of the California Board of Equalization made the comment earlier this week. But, she noted small signs of hope.
“According to Yee, the state has lost 1 million jobs since December 2007 and she doesn’t see significant recovery for some time.
She does, however, see hopeful signs in a slight increase in sales of existing homes, some hiring in Silicon Valley and also in the port of Long Beach which may signal an increase in exports.
‘But will they be sustained activity?’ was her question.
Consumer spending is still down and new housing construction is at a standstill. A jump in August 2009 sales taxes was due to the federal Cash for Clunkers used car trade in program and has not translated into any other consumer buying.
‘People who have money aren’t spending it, and a lot of people don’t have it,’ Yee said.”
But like any good government official, Yee notes “that the state is not alone” in its budget sorrows, highlighting other governments seeing the same pain
Another student protest: If state lawmakers thought students may quiet down a bit after the March 4’s Day of Action — they were mistaken.
Chico State held a rally against budget cuts Wednesday. But this time, protesters noted the impact education cuts would have on, not only their university, but their county.
According to a study reported on by The Orion, the “subsequent multiplier effect” found that with the reduction of 200 students to Chico State, “there were at least 97 fewer jobs and a loss of $5.2 million circulating in Butte County.”
“As Chico State is forced to tighten its belt, so must the rest of Butte County.
The Chico State Action Rally was held today in response budget reductions for the California State University system, according to an e-mail sent out by President Paul Zingg. Students, faculty and community members held signs, listened to speeches and marched as a way to demonstrate a collective resolve to change California’s budget policies on education.
However, the $564 million budget cut for the 2010-2011 school year will not just affect students and their quest for a college education, but also trigger an economic impact on the entire community, said Frederica Shockley, chair of the Chico State economics department.
Shockley conducted a series of surveys of students in her classes, she said. Including tuition, she concluded that each student spends an average of $12,000 per semester in Butte County alone.”
Shockley’s study proves true for one restaurant whose owner said he lost “40 percent in revenue” because he relies heavily on student customers.
Cash update: California Controller John Chiang released his February cash report Wednesday showing an 8.7 percent or $480 million increase from Gov. Arnold Schwarzenegger’s estimate.
“Revenues came in above projections for the third month in a row, continuing a positive trend that shows California is on the road to recovering from the recession. Given February’s numbers and recent action from the Legislature to improve the State’s cash flow, Californians should expect to receive their hard-earned tax refunds on time,” Chiang said. “While the worst may be behind us, we still face cash challenges later in the summer absent enactment of further credible and sustainable budget and cash solutions.”
A breakdown of the bright news includes: year-to-date receipts ahead of budget estimates by $1.94 billion and the cash position was $2.15 billion ahead of projected levels.
California started the fiscal year with an $11.9 billion cash deficit in the General Fund, which grew to $22.3 billion by the end of February.
Hoa Quach is the political editor for the San Diego News Network.