Senator Moorlach's Budget Deadline Update

5 Key Measures of California’s Fiscal Health
Tuesday, June 14, 2016

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:

  1. Tax Rates

  1. 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.

  1. Unfunded Retiree Medical Obligations

  1. Deferred Infrastructure Maintenance

  1. 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:

 

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