California’s Private Economy Serves State Budget Bounty

Right on schedule, the California Legislature approved a $213 billion state budget – roughly twice the size of the budget adopted a decade ago in the teeth of the recession.

The votes were overwhelming – Democrats who authored the budget deal control nearly three-quarters of the Legislature. And the timing was predictable: approving a budget later than June 15 would mean forfeiture of legislative salaries.

But in the whirl of votes and self-congratulations, an important point was lost. The bounty of this year’s budget would be nonexistent but for the stunning performance of employers and businesses, the beating heart of the California economy.

In the words of CalChamber President Allan Zaremberg, the “budget approved by the Legislature is brought to you by the wealth created from California’s private sector economy.

“California’s robust economic growth has created low unemployment and increased opportunities,” continued Zaremberg. “However, California’s growth has also created new challenges that the Legislature and Governor must address including the high cost of housing and other essential needs, an epidemic of homelessness in the state, and punishing commute times for California workers.

Public schools will see their total allocations rise by 65% since 2008-09, with per pupil funding topping $12,000 for the first time. Recognizing the drain that pension obligations are having on schools, the budget provides more than $3 billion to moderate districts’ future pension cost increases.

At the Governor’s insistence, the 2019-20 budget package includes nearly $20 billion in reserves. It also pays off the “wall of debt” incurred during the last recession. Especially in times of great bounty, the state must prepare for inevitable economic downturns.

The budget also provides for nearly 15,000 new slots for undergraduates at the University of California and California State University. It expands the College Promise fee waiver program to a second year at community colleges.

The Legislature also approved the Governor’s proposal to add more than $200 million to enhance the state’s fire protection and suppression capabilities, and more than $230 million to increase the pace and scale of forest health and fire prevention activities.

As CalChamber CEO Zaremberg observed, “Funding these priorities is an investment in California’s future economic growth and success.”

Contact: Loren Kaye

Loren Kaye
Loren Kaye was appointed president of the California Foundation for Commerce and Education in January 2006. He has devoted his career to developing, analyzing and implementing public policy issues in California, with a special emphasis on improving the state's business and economic climate. He also was a gubernatorial appointee to the state's Little Hoover Commission, charged with evaluating the efficiency and effectiveness of state agencies and programs. Kaye served in senior policy positions for Governors Pete Wilson and George Deukmejian, including Cabinet Secretary to the Governor and Undersecretary of the California Trade and Commerce Agency. See full bio.