To read the full version of this content please select one of the options below:

Is california broke or is its budgeting system broken? empirical examination of the budget affordability, the institutional arrangements, and the growth of deficits in California

Dragan Stanisevski (Department of Political Science and Public Administration at Mississippi State University)
Luke Fowler (College of Arts and Sciences, at Valdosta State University)

Journal of Public Budgeting, Accounting & Financial Management

ISSN: 1096-3367

Publication date: 1 March 2015

Abstract

Since the 1978 adoption of Proposition 13 California’s fiscal conditions have steadily deteriorated. This article questions whether this fiscal deterioration is due to a lack of budget affordability or of institutional ineffectiveness. In examining the institutional ineffectiveness of California’s budget system the article focuses on: (1) general revenue mobilization, (2) expenditure mandates in education, and (3) legislative party divisions in face of supermajority requirements. To this end, the article develops a pre-post regression model that analyzes the factors that influenced the state budget balances. The article finds that California’s deteriorating fiscal conditions are strongly influenced by the declining effective tax rate. The study also finds that increases in education spending are a statistically significant factor, but finds mixed support for the argument that political divisions drive California’s budget deficits.

Citation

Stanisevski, D. and Fowler, L. (2015), "Is california broke or is its budgeting system broken? empirical examination of the budget affordability, the institutional arrangements, and the growth of deficits in California", Journal of Public Budgeting, Accounting & Financial Management, Vol. 27 No. 3, pp. 377-402. https://doi.org/10.1108/JPBAFM-27-03-2015-B004

Publisher

:

Emerald Publishing Limited

Copyright © 2015 by PrAcademics Press