FOR IMMEDIATE RELEASE: Thursday, January 7, 2015
Contact: Amanda Smith(714) 662-6050, Amanda.Smith@sen.ca.gov
Statement from Senator Moorlach on Governor’s 2016-17 Budget Proposal
SACRAMENTO- Senator John Moorlach (R-Costa Mesa) released the following statement today regarding Governor Jerry Brown’s 2016-17 budget proposal:
“Every California family knows that our state is a very expensive one in which to live. That includes our state government, which has the nation’s highest income and sales taxes, and now the highest gas taxes when adding the new cap and trade taxes.
“With $7 billion in revenues above last year’s budget, we can’t ask these families to pay even more in higher gas taxes. That will be a major difference between Senate Republicans and the Governor.
“I appreciate the Governor’s concern for our fiscal future, particularly if the economy takes a downturn. That’s why we must take care of our priorities with current revenues, and that includes a well maintained infrastructure that will accommodate commerce and job growth.”
CLICK HERE to read Senator Moorlach’s 6 Measures of CA’s Fiscal Health or see below.
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 (link is external) (CAFR) (link is external).
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 (link is external), they’re telling lottery winners that they have to delay their payments.
2. Estimates of CA Unfunded Pension Liabilities
CalPERS (link is external): $ 96.7 billion
CalSTRS (link is external): 72.7 billion
UC Pensions (link is external): 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. (link is external)
3. Current Unfunded Retiree Medical Liability
CA has the nation’s highest unfunded retiree medical liability (link is external) at $71.8 billion.
4. CA’s Transportation Infrastructure
- CA’s 59 cent/gallon gas taxes are the nation’s 4th highest (link is external). 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 (link is external), 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) (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 (link is external) of 500 CEOs by Chief Executive Magazine.
6. Budget Leftovers From Last Year
- Medi-Cal Shortfall: (link is external)
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: (link is external)
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.
About Senator John Moorlach (R-Costa Mesa):
State Senator John Moorlach represents the 37th district of California, is a trained Certified Financial Planner and is the only trained CPA in the California State Senate. He gained national attention 20 years ago when he was appointed Orange County Treasurer-Tax Collector and helped the County recover from its bankruptcy filing – at the time the largest municipal bankruptcy in U.S. History.