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Chapman says state budget deficit half as big as governor claims
June 19th, 2009, 12:30 pm · 23 Comments · posted by Gary Robbins, science writer-editor
Chapman President and economist James Doti.
Chapman University economists, who were among the first to correctly identify the onset of the current national recession, say that the state of California has over-stated its actual deficit by about $12 billion. Chapman President and economist James Doti first raised the issue on Wednesday during the university’s mid-year economic udpate, held at the Costa Mesa Hilton. Doti said the state’s actual deficit is roughly $12 billion, not the $24.3 billion figure cited by the Schwarzenegger Administration.
Doti followed up on that remark Thursday night in an email, saying: “I would place it at $12 billion, as I said at the forecast conference. The Gov’s office gets a higher deficit by adding the accumulated deficits in prior years of roughly $7 billion and a contingency reserve of $5 billion. Can you imagine what the federal deficit would be if it added the sum of all prior deficits (essentially our national debt) to it? And why in a year when we are in a deep recession are we adding a $6 billion contingency.? That should be done in good years - not recession years.”
The state has so far stuck with the $24.3 billion figure, leading the University of California system to announce Thursday that most employees — including almost everyone at UCI — face a pay cut range from 4 percent to 8 percent. (Read our full story.
- UCI freshmen enrollment to plunge 14 percent this fall
- State hints at big fee hike for California community colleges
- Cal Poly Pomona cancels summer quarter, affecting O.C. students
- UCI freezes faculty hiring as budget cut soars to $55 million
- 31,500 student spots could be eliminated at O.C. community colleges
- How state budget crisis might affect O.C. college students
- UCI endowment — a key source of scholarships — plunges $45 million
- As O.C. public colleges shrink, Chapman grow
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the safe bet is a better choice. i’d rather have a 50% surplus than defecit.
I wonder if the govenator is going to tell that we had a 24B deficit but because of Sacramentos great legisators they were able to balance the budget by only raising our taxes another 12billion and that they cut 12billion (which of course would be a lie) which totals the 24billion he has been squacking about.
The State of California, has been using sneaky accounting tricks for years, to mask the true budget situation. I’ll take Doti’s read on the budget any day. Who should we trust, a real economist who is usually right, or a movie actor?
CALIFORNIA IS THE LARGEST F A N T A S Y BASED THEME PARK IN AMERICA.EVERYTHING is EXAGERATED AND INFLATED, SO ARE THE “FACTS” …..The illusion portrayed on TV of life in the OC ARE EQUALLY UNBALANCED. NO WONDER DISNEYLAND IS IN THE MIDDLE OF THE OC……….it IS THE PERFECT LOCATION for the FANTASY TO EMINATE. PEOPLE in so california in general have not lived within their means for decades, neither has the california state governmental agencies.Life will become very less ‘glitsy’ and ‘glam’ in future for those poor people that are trying to buy a piece of california’s LONG DEAD FANTASY…….THEY WILL BE TAXED INTO OBLIVION .IT IS NO WONDER TO ANYBODY WHY 1.5 MILLION PEOPLE EVACUATED in recent years ….,IT WASN’T ONLY ILLEGALS THAT VACATED THE ILLUSTRIOUS & EVER GROWING NIGHTMARE OF LIFE in the infamous OC…….speaking as one of those sane people who actually OWNED property in other states while watching the ROT FESTER in southern california for decades.
THOSE CHICKENS ARE NOW ROOSTING in california’s budget nightmare……….and chicken poop STINKS as much a s the financial mess in california.SAD but I know what I am talking about, we lived in the OC for decades and witnessed the deterioration .Nero played while ROME BURNED also.Hasta la VISTA babies…….crying won’t remedy califonia’s upside down financially underwater nightmares.
Karen: Some people may have chosen to leave California. But the state’s population has actually been increasing, not decreasing. Same goes for Orange County.
It would be helpful to be able to compare the median income for those leaving the state in comparison to the median income for the new arrivals. Perhaps there are indeed more people, but they don’t pay as much taxes or make as much money as those who has chosen to leave?
You right. they were replaced with illegal immigrants, that pay no taxes.
If Doti is right, then Arnold -a Republican - is wrong and the state comptroller, Mr. Chiang - a Democrat - is wrong too. Does anyone know what the REAL deficit is? If Doti is actually correct, then perhaps the Democrats can cancel some of the additional tax increases they favor.
Our state perpetually uses goofy numbers and magic to establish figures for budgeting purposes. My view is that our governors, including Davis, overstate our obligations in an effort to raise taxes so that more services can be provided to those that elect them. Government has this unflappable belief that all government spending is necessary and appropriate therefore acquiring more funds through whatever means is viewed as a proper way to continue with the growth of government.
Gee and this is a surprise to anyone. The Governor has been using scare tactics for years to cut programs like school funding and to raise our taxes. I’m glad we have people like James Doti to call him and the rest of the people in Sacramento on the carpet.
Les, the movie actor didn’t come up with the number, his economist did. I can’t believe how ignorant the people are on this board
The Governor could save billions by making a few changes to the prison system. He could save:
About $220 million annually by increasing inmate good-time credits by a month.
About $250 million annually by implementing Little Hoover Commission recommendations to realign responsibility for serious juvenile offenders from the State prison system to the counties.
Up to $500 million annually by establishing a community corrections program authorizing the State to contract with counties to provide parole supervision.
About $13 to $27 million annually, and avoid spending billions in bond funds for unnecessary prison beds, by increasing the percentage of prison contract beds from the current 4% to 9% like Texas.
From $13.5 Million to $135 Million annually and increase public safety by authorizing the DC&R to release inmates on any day during the last one or two weeks of their term.
About $220 million annually by telling the Board of Prison terms to speed up the technical violation process by one month.
Billions by adopting the national correctional prison bed standards used by the Legislative Analysist rather than using unique California prison bed standards. Based on national standards, the prison bed shortage is about 11,500 beds rather than 40,000 beds. Billions in AB 900 bond funds would be saved because it would not be necessary to build more prison beds. The bond funds could be applied to the deficit
The Terminator Governor is shooting high in the sky for local spending stake-holders to take off some of their earnings. What better way than to “cry wolf at the door” -when the wolf is $12 billion farther away then the public is being led to believe. The Economist is not an elected or worried about his LEGACY Governor for exiting out a TERMINATED HAS BEEN actor and $1.00 a year Governor. The TRUTH?-Californians are getting our $1.00 a year service-Maybe we should give him a raise-how about .25 cents? Call somebody who cares about this governor’s legacy…hmmm!!
The governor needs to address the real needs of Californians. We need a clear assessment from a neutral source to help us decide the course we need to take for the future of California. We hope this report of the $12 billion dollar over-estimation will bring some relief for folks throughout the state and begin the process of dealing with real numbers. Doable and fixable numbers.
This guy must be a genius, he’s the only one in the State that knows the true budget deficit. Even if he is right, the state must make drastic cuts. The average person (and unfortunately most legislators) do not realize that tax receipts are much less than last years and dropping.
not only do we have to catch up with the current deficit, but make up for continual revenue losses!!!! Wake up a smell the coffee
You guys crack me arguing about the size the death!
for the past 2 years every 90 days the California government is forced to deal with the lack of money.
What’s the difference if it is 10 or 24 when every 9o days the well is dry.
Slash spending before the system literally collapses !!!
Schwarzenegger makes the case twice as bad. He only gets 1/2 of what he wants. California wins! Well, not really. No one is cheering. Most everyone is still p@#$#4!
No, Arnold didn’t make it large enough. It’s about to get really dark in California folks! Depression/ New World Order here we come.
Take a look at a REAL expert’s POV. One who works in business and tells us what this year holds for the DECREASE in sales, biz and RE tax revenue. See:
FAILING ECONOMY 220,000 RETAIL STORES TO CLOSE IN 2009
http://www.youtube.com/watch?v=03dL1zIa8hg
Al Diro: The guy in the video says what everyone said long ago. What goes unmentioned in this: UCLA and Chapman economists say the economy appears to be bottoming out and that the U.S. should record an increase in employment sometime next year.
If its a bill due or any expense that’s ongoing count it.
I’m tired of the governor having to revisit the budget because they forecasted the budget smaller than it’s actual amount.
If I understand this correctly, the previous rolled over budget expenses are being used in this years budget.
Can anybody explain the contigency part of this budget? Is this federally subsidized programs that are provided by the state and localities.
Either way I say stay with the higher amount Arnold and lets cut out the Fat.
I don’t trust the Governator as far as I could throw him. Even when the economy was good, he chose to play games with the budget instead of balancing it. He prefers posturing and playing he-man to trying to use his influence to get the two parties to work together enough to pass a real budget. And now, he’s decided to play born-again budget cutter with apparently no concern for the agreement and compromise needed to pass a budget. I wouldn’t be surprised if he’s decided that it serves his purpose to make the budget deficit seem as large as possible.
I do wonder if what Prof. Doti says is true and the Governor’s office is making things look worse by changing the way that they are accounting for past debt, why has nobody else called him on it?
The annual $10 Billion prison system budget could be reduced by about $1 Billion and about $5 Billion in construction bond funds could be redirected to the deficit.
We could save:
· Billions by adopting national correctional prison bed standards used by the Legislative Analysist. Based on national standards, the prison bed shortage is about 3,000 beds. The prison bed shortage could be eliminated by increasing the percentage of contract correctional beds from 3% to 5% of permanent capacity.The $6.5 billion in prison construction bond funds could be applied to the budget.
· About $220 million annually by increasing inmate good-time credits by a month.
· About $250 million annually by implementing Little Hoover Commission recommendations to realign responsibility for serious juvenile offenders from the State prison system to the counties.
· Up to $500 million annually by establishing a community corrections program authorizing the State to contract with counties to provide parole supervision.
· About $13 to $27 million annually, and avoid spending billions in bond funds for unnecessary prison beds, by increasing the percentage of prison contract beds from the current 3% to 9%.
· About $220 million annually by speeding up the technical violation process by one month.
I knew the state was lying to garner sympathy. didn’t pass the smell test