What exactly will Arnold "terminate"?
I would take the following approach. I would start with payroll, surely one of the largest consumers of state dollars. In 1997-98 (or the year One B.D. --Before Davis), the State of California had 271,254.1 full time equivalent employees. (source: California Legislative Affairs Office, lao.ca.gov. This number represented a modest increase over the employment level of a few years earlier, which had been 265,034.5 in 1993-94.
Then Davis took over. The most recent data available from the California LAO shows that the state employee headcount increased from 271,254.1 in Year 1 B.D. to 323,602.8 in Davis Year 4 (2001-02). The Web site doesn't have the figures for 2002-03. Year-by-year, here is how the totals look:
1997-98: 271,254.1
1998-99: 282,859.7
1999-00: 296,076.1
2000-01: 311,238.9
2001-02: 323,602.8
Most businesses use a number of between $50,000 and $100,000 per year to express the cost of having an employee for a year, including salary, benefits (usually these are 30 to 40 percent of the salary), pension costs, supplying office space, equipment, etc.
Recall that during the years in question, California's state population grew by 6 percent (see my earlier post and cites to sources for those numbers). Therefore, we will assume that the base level of appropriate growth for the California state employee population should also have been 6 percent from 1998 to 2003. If Davis had held the line to 6 percent growth in employees, this would have resulted in an overall California state workforce of 287,529.3 (271,254.1 * 1.06). Therefore, at first glance California seems to have acquired about 36,000 more employees than one would expect were needed to service the 6 percent increase in demand for services driven by the population growth.
If we were to then get rid of 36,000 employees and if we assume that the cost per year of having an employee on the payroll averages $75,000 (which is a conservative estimate), that would save $2.7 billion per year just by getting rid of the extra bodies that Davis added on.
However, I don't believe in simplistic approaches or statements. So I wouldn't go about it exactly that way. Instead, I would look at the line items of where the bodies were added, identify the two areas where the priority (there is perhaps no more important word to be learned by government than "priority") is greatest, and leave the increased employment intact in those areas only, rolling it back to 1998 levels in all other areas. Here are the areas listed in the LAO report on state employment:
Legislative, Executive and Judicial
State & Consumer Services Agency
Business, Transportation & Housing
Trade and Commerce Agency
Resources
Environmental Protection Agency
Health & Human Services
Corrections
K-12 Education
Higher Education
Labor and Workforce Development
General Government
Everyone has their own two favorites, things they think are the most important. Personally, mine out of that list are K-12 Education and environmental protection, so I will focus on those. In those areas, from 1997-98 through 2001-02, state employment increased by 325 people in K-12 education (bear in mind these aren't the teachers but the state administration of the system) and by 1,030.6 in environmental protection.
So I would keep those 1,355.6 extra people that Davis added, and reduce the workforce of every single other state agency to 6 percent above 1998 levels. This would result in a reduced workforce of approximately 34,600 people. The savings in employee cost alone would be about $2.5 billion per year without any program payments to nonemployees being cut at all.
Then I would focus on the specific programs themselves using the same approach, that is, look at the delta (change) between where they were in Year One B.D. (1997-98) and where they are currently, identify the areas (priorities, there's that word again) in which I felt the spending increase was most appropriate, and reduce all other areas to 6 percent above 1997-98 levels. This would result in a level of state services approximately the same as before Governor Davis took office in all areas except the two I identified as deserving of additional monies.
Message 19387161
As for spending, here are the Davis spending numbers (you are familiar with them since I posted them to you before, but I haven't put them on this thread before so I'll repeat them. You can just ignore them like you did the last time):
When Gray Davis was elected as California Governor, California's fiscal year expenditures were $100.2 billion. They were poised to increase to $109.6 billion. The state seemed to be able to survive, to live, with that level of state services. There is always extra that some might want to have, I suppose, but that level of expenditure didn't seem to pose a threat to the continued life of the State of California. In fact, the $100.2 billion was up from $86 billion just three years earlier (see figures pasted below).
Then Davis took over, and the State's appetite for money took an astonishing leap. Here are the figures (from the State of California, Legislative Analyst's Office):
Grand Total of State Spending, California
Fiscal Year 1994-95: $ 86.1B
Fiscal Year 1995-96: $ 90.2B
Fiscal Year 1996-97: $ 95.9B
Fiscal Year 1997-98: $100.2B
(Gray Davis elected, November 1998)
Fiscal Year 1998-99: $109.6B
Fiscal Year 1999-00: $122.2B
Fiscal Year 2000-01: $137.7B
Fiscal Year 2001-02: $145.8B
Fiscal Year 2002-03: $166.8B
Fiscal Year 2003-04: $154.7B (projected)
lao.ca.gov (select "all" for categories of expenditures)
Now the question I have is this. Did California's "vital" needs, its needs necessary to its very survival, grow from $86 billion in 1995 to $166 billion in 2003? The California budget grew from zero to $86 billion in well over a century and went up another $80 billion in just eight years.
The last five of those years were Gray Davis' tenure, and $64 billion of the $80 billion increase took place while he was governor. You can call the needs "vital" if you like, but that is just an astonishing public appetite for funds. I'd love to have twice as much money as I had eight years ago. Is it vital to my very existence?
Think about it this way: If you were to roll back California's state spending to its level in 1997-98 just before Gray Davis was elected, and adjust it for inflation (using this calculator -- data.bls.gov -- from the U.S. Bureau of Labor Statistics shows that from 1998 to 2003 the CPI increased by 13.25 percent), California state government spending would currently be at $113.5 billion (an increase of $13.3 billion or 13.25 percent over the $100.2 billion in 1997-98). Put another way, California could provide roughly the same level of "vital" services to needy consumers of state services that it provided five years ago for $113.5 billion per year.
Now compare that to where California is today. Even after supposedly draconian cuts of "vital" services, California's level of state expenditures is above $150 billion. Last year, it was at $166.8 billion. $166.8 billion is about 50 percent above what the rate of inflation would have required.
That's not a revenue problem, AS. It's not a "vital" services problem, either. It's not even a very difficult problem. It's a pig drowning in a trough.
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