Senator Moorlach's Notes on SB 826: Budget Act of 2016
“California has a $170 billion unrestricted net deficit, an increase of $54 billion since last year, the LARGEST net deficit of all 50 states. This deficit severely threatens California’s short and long term financial health.
"While Governor Brown has been watching the state’s spending, he only has two years left in this position. The next governor is going to have an interesting predicament to deal with if the legislature doesn’t pay attention now."
-Senator John Moorlach
Here are 5 key metrics you need to know about the status of our state’s fiscal house as we anticipate tomorrow's vote on SB 826:
- California has the nation’s HIGHEST income, sales and gas taxes (when cap and trade is included).
- California also has the highest corporate tax in the western United States and the fourteenth highest property tax. According to the Tax Foundation’s 2015 Facts and Figures, that puts California fourth in overall tax burden on a per capita basis.
Unfunded Pension Obligations
- The Legislative Analyst’s Office estimates current CalPERS, CalSTRS and UC Pension unfunded liabilities at approximately $180 billion.
- The Pew Charitable Foundation found that, according to 2013 data, California is ranked highest in the nation for unfunded public employee pension obligations at $169.6 billion.
Unfunded Retiree Medical Obligations
- California has the nation’s HIGHEST unfunded retiree medical liability at $80.3 billion (this figure INCREASED by $6.3 billion since last year's report).
Deferred Infrastructure Maintenance
- California has 31,827 miles of major roads and at least 34 percent of these are rated in ‘poor’ condition, costing motorists $703 a year in additional fees.
- The Reason Foundation’s Adrian Moore recently pegged the unfunded road maintenance number at $59 billion.
- California spends 3 times the national average on maintenance per mile of roadway, yet California’s roads rate among the nation’s WORST in pavement condition and congestion.
Unrestricted Net Assets/Deficits
- California’s most recent Comprehensive Annual Financial Report (CAFR) shows an unrestricted net deficit of $170 billion.
NOTE: The unrestricted net asset (or deficit) is a summary of the state’s available assets after removing from the balance sheet fixed assets (buildings, parks, roads, etc.) minus outstanding debt obligations for these fixed assets. This commonly used fiscal health indicator should be positive for healthy organizations.
Here’s a recent history of the net unrestricted assets for California: