Public spending: myths vs. facts
Contrary to popular belief, it’s gone down, not up
To hear some politicians talk, state spending is out of control and state workers are living like kings, among other myths. Let’s look at the facts.
Myth: State-government costs have ballooned in recent years relative to the state’s total economy. Facts: In 1977 state government consumed 6.6 percent of the state’s economy. In 2010 that figure was 5.6 percent.
Myth: The number of state employees has grown out of control. Facts: Thirty years ago there were 9.5 state employees per 1,000 residents. Now there are 8.9 for every 1,000 residents. In 2008, California ranked fourth lowest among all states in the ratio of state employees to state population.
Myth: State spending is at an all-time high relative to residents’ earnings. Facts: For each $100 Californians earn, the state spends $7.44. That number has been this low only four times in the past three decades.
Myth: Public schools and higher education take an ever-growing share of state taxes. Facts: Schools take only slightly more of the state budget (43.6 percent) than in 1998 (42.7 percent). Public universities’ share is slightly lower now (7.5 percent) than in 1998 (8.6 percent). Meanwhile, state prisons’ share has grown from 7 percent in 1998 to 11 percent now.
Myth: Welfare is eating up more and more of the state budget. Facts: Welfare consumed 3 percent of the state budget in 1998; that figure now is 2.4 percent.
Myth: The number of California public employees continues to grow faster than population growth. Facts: Between March 2008 and October 2009, the number of local and state employees declined by 70,000 while population increased by approximately 600,000.
Myth: State employees are not sacrificing like private-sector employees. Facts: Take-home pay for the same job classifications has declined by 44 percent over the past 15 years for California state employees (adjusting for inflation) as a result of pay cuts, increased medical insurance costs, and furloughs. Excluding furloughs, the decline has still been 30 percent.
Myth: State employees in California are no more educated than private-sector employees and, hence, should be paid no more than private-sector workers. Facts: Public employees in California are more than twice as likely to hold a college degree or more compared with private-sector employees (48 percent vs. 23 percent).