1. California's Net Financial Position
CA’s “net” financial position is a $117 billion deficit, ($3,014 per person) according to the most recent Comprehensive Annual Financial Report (CAFR).
This figure should be positive for healthy organizations. It’s derived by tallying the state government’s assets (monetary funds, investments, buildings, roadways, bridges, parks, etc.) and subtracting its obligations. The last positive number CA had was Gov. Pete Wilson’s last term with $1.5 billion in net assets.
CA now ranks among the worst states, just above Illinois, whose net position is a negative $68.3 billion, or $5,335 per person. Illinois’ finances are so bad, they’re telling lottery winners that they have to delay their payments.
2. Estimates of CA Unfunded Pension Liabilities
CalPERS: $ 96.7 billion
CalSTRS: 72.7 billion
UC Pensions: 12.1 billion
NOTE: For the 2014/15 fiscal year, CalPERS planned for a 7.5% rate of return, but only managed a 2.4% rate of return.
3. Current Unfunded Retiree Medical Liability
CA has the nation’s highest unfunded retiree medical liability at $71.8 billion.
4. CA's Transportation Infrastructure
CA’s 59 cent/gallon gas taxes are the nation’s 4th highest. When cap and trade taxes are added, CA has the nation’s highest taxes.
CA spends 3 times the national average on maintenance per mile of roadway, yet CA’s roads rate among the nation’s worst in pavement condition and congestion.
In the 6 years following the Great Recession, CA’s gas tax revenue grew by $1.75 billion, while road spending remained stagnant (Board of Equalization Data).
5. CA's Business & Economic Competitiveness
CA has the nation’s highest income, sales and gas taxes, when cap and trade is included. CA also has the highest corporate tax in the Western United States and the 14th highest property tax. According to the Tax Foundation’s 2015 Facts and Figures (link is external), that puts California fourth in overall tax burden on a per capita basis.
For the 11th year in a row, CA was named the worst state for business in a survey of 500 CEOs by Chief Executive Magazine.
6. Budget Leftovers From Last Year
CA is not reimbursing doctors enough for Medi-Cal visits. Therefore, doctors have stopped taking Medi-Cal patients. Rather than use $1.1 billion from this last year’s $7 billion increase in general fund spending from the year before to backfill the Medi-Cal system, the legislature instead tried to raise cigarette taxes by $2 per pack to fund this shortfall.
Unemployment Insurance Fund:
In January 26, 2009, the California state government borrowed $10 billion from the federal government to cover its Unemployment Insurance Fund. As of June 3, 2015, it still owed $8 billion. The 2015 interest payment on the loan totaled $174.5 million. By leaving this unpaid, CA employers are now being forced to cover the payments through increased federal unemployment payroll taxes.