Author: David Crane

President of Govern For California and Lecturer in Public Policy at Stanford University

California’s Budget Deal

In case you hadn't noticed, we gave you a lengthy respite from our missives while the Legislature and Governor negotiated the budget for the fiscal year starting July 1. Through June 10 we had supplied legislators, you and reporters with several notes describing the need to dramatically boost budget reserves. 27 Democratic legislators got it, … Continue reading California’s Budget Deal →

27 Legislators Channel Wayne Morse

Wayne Morse was one of only two US Senators to vote against the Gulf of Tonkin Resolution in 1964 expanding military action in Vietnam. It takes guts to oppose party leadership. This week California saw similar courage when nearly a third of Democratic members of the California Legislature called for budget reserves greater than those … Continue reading 27 Legislators Channel Wayne Morse →

California’s K-12 schools are being set up for a fall of epic proportions

If we are reading the laws about school reserves correctly, California’s K-12 schools are being set up for a fall of epic proportions unless schools or the state save much more from surging revenues. Under conditions likely to be met this year, non-basic aid school districts with more than 2,500 Average Daily Attendance must cap reserves at only 10 percent … Continue reading California’s K-12 schools are being set up for a fall of epic proportions →

Partying Even Harder Than 1999

Dear Legislators, As you know, in nine days you must pass a budget. Based upon the Legislature's Version of the State Budget submitted by Budget Committee chairs, as of now you are on track to make a big mistake. This is a chart of the S&P 500 Index from January 1 1991 through last Friday: CA General Fund Revenues … Continue reading Partying Even Harder Than 1999 →

CA is a STATE, not a SPAC

Dear Legislators, With your deliberations over the 2021-22 Budget, you are about to make a most consequential decision. Below is a chart of General Fund Revenues and Transfers from the beginning of the last decade. The blue columns are closed fiscal years. The green column is for the current fiscal year, which closes June 30. … Continue reading CA is a STATE, not a SPAC →

Can’t Get No Satisfaction

Dear GFC Supporters, It's been nearly 20 years since I left business for state government.Though my time zone didn't change, the pace of change sure did. While the state takes weeks to process unemployment insurance claims, a new technology developed by a California company (Snowflake) formed less than a decade ago enables low-cost processing of … Continue reading Can’t Get No Satisfaction →

LAO Gets It Partly Right

Dear Legislators,The first sentence of LAO's Multi-Year Budget Outlook published yesterday comes with an important disclaimer: This report presents our office’s independent assessment of the condition of the state General Fund budget through 2024‑25 assuming the economy continues to grow. With that assumption in mind, LAO counsels you to add $12 billion to reserves: To … Continue reading LAO Gets It Partly Right →

38 or 76 Angels on CA’s Pin?

Dear Legislators,The 2020 Budget Act you enacted 11 months ago forecast the S&P 500 to be at 2,060 in the first quarter of 2021. But because the S&P 500 closed the quarter at nearly twice that level and CA tax revenues are correlated with stock markets, revenues are way ahead of forecast. When it comes … Continue reading 38 or 76 Angels on CA’s Pin? →

CA’s Revenue Forecasts

24 months ago, California's Department of Finance forecast $151.8 billion of revenues in 2022-23 from the three largest sources: 12 months later, DOF revised that forecast down $30 billion: 12 months later, DOF revised it up $53 billion. The reality is that neither DOF nor anyone else has any idea what California's tax revenues will be in 2022-23 or … Continue reading CA’s Revenue Forecasts →