More on California Fiscal Policy: How Big Is This Year’s General Fund Budget?

After the Governor signed the Fiscal Year 2014-15 budget, several commentators declared it the most expensive budget ever.  

As always, the answer to “how big?” is best answered in the context of “relative to what?”

If we are to compare spending across years, budget spending in 1970 cannot be easily compared to 2012 spending (the most recent year for which we have "actuals"). Program spending changes and evolves over time. Indeed, even if the Legislature were to add no new services or programs for the next 42 years, budget totals still would grow to account for changes in costs and caseload. Moreover, as the state becomes more “wealthy” you'd expect the services to become more affordable. 

When the Department of Finance indexes General Fund spending to personal income -- a measure of wealth -- we find that even though the 2015 budget has the largest total, it is not the largest budget when measured against the state’s personal income tax revenues. Specifically, the biggest General Fund budgets were in the wake of Prop. 13 and the local government bailout (1978-79 through 1981-82). The next biggest budgets were in 2000-01, 1981-82 and 2006-07.