(BCN) — A little more than $300 billion.
That’s the price tag of the budget for the coming year, which the California Legislature approved last week. The surplus alone has reached a record-high $97 billion. And while the budget process is not final — legislative leaders will now have to negotiate with Gov. Gavin Newsom on the finer details of that budget — that staggering number can be difficult to put into perspective.
Comparing that number to other, more tangible, things provides a better grasp of scale.
The total budget surplus of approximately $1 billion is equivalent to:
- a $7,500 vacation for everyone in California
- 6.2 million Tesla Model 3s, enough for everyone ages 25-34 in California
- 3 times the estimated cost for the high-speed rail
- 1.2 times Texas’s current two-year budget
- 2 times the federal student loan debt for California students
In recent years, a large chunk of California’s “general fund” revenue — where the bulk of spending happens — comes from the state’s personal income tax. That means it relies heavily on stock market performance and a progressive tax system drawing large sums from the wealthiest residents. This has locked the state into a cycle of boom and bust, dependent on how the overall economy is faring.
And how does projected general fund spending for this coming year, which as of Newsom’s revised budget in May reaches $227 billion, compare to previous budgets once we account for inflation?
Starting in the mid-1970s the budget was a little more than $50 billion, adjusted for 2022 value, and growing at a shallow rate.
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But like the revenue chart from a venture capitalist daydream, the budget just keeps going up and to the right since then. As revenue is largely tied to the stock market, the growth slows during recessions. See the clear dip that took place during the Great Recession in 2008. See also that the current record-high inflation cuts against the huge budget, resulting in a dip. Spending didn’t go down, but the amount of stuff the state can buy with all its billions certainly did.
Although the Legislature approved the budget, there is still work to be done before it is enacted. What lawmakers approved is essentially a blueprint to meet the June 15 constitutional deadline to approve a budget or face no pay. There are still policy disagreements between the Legislature and Newsom, particularly around how to help alleviate the impacts of inflation on people’s wallets.
As the latest budget gets finalized through a series of “trailer bills” the dollar amounts will shift slightly. And the shape and size of any future budget is an action item for the future. But if history is any guide, we’ll see another record-breaker in the future.
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