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Data Sources, Documentation, and Difficulties The focus here is on state and federal financial activities during the 2023-24, 2024-25 and 2025-26 fiscal years. This avoids direct effects of the Covid pandemic on revenue and spending. But dealing with the pandemic has contributed to on-going government spending and debt problems. It also needs to be recognized that the State fiscal year begins on July 1 and ends on June 30 of the following year, while the federal fiscal year begins on October 1 and ends on September 30 of the next year. Adding to this confusion is that the state names its fiscal year as the year it begins, while the federal fiscal year is named by the year when it ends. And adding more confusion, most of both federal and state fiscal year revenues are based on prior year January to December income, while spending occurs during the different federal and state fiscal years. The data used here is taken from online websites. This was done for convenience and so that users could have direct access to sources. Documentation is provided that should lead to websites containing the referenced data, but finding specific data values might require some educational searching. In most cases, it seemed best to use information from sources close to the budget process, which favored relying on government reports. This also helped to avoid reporter bias. In some cases, however, needed summaries could not be found in government reports, or were buried in many, large tables in small print. And sometimes it seemed like significant points were lost in large amounts of data. The President's federal budget proposal and the Governor's original California budget proposal, May revise, and the enacted budget are available on-line. But these are voluminous documents where conclusions and trends are often hard to recognize, or are at least hard to follow. More focused federal budget reports and summaries are prepared by several agencies and departments. The Treasury Department's FiscalData site and some reports by the Congressional Budget Office and by the Office of Management and Budget were helpful. The Center on Budget and Policy Priority website has a good discussion about deficits, debt, and interest that explained differences between types of accounting. Sites where specific data was found are given in the footnotes to Tables. With many web sites and much data available for current and past federal budgets, finding specific information can be difficult. There are also important differences between federal funding priorities and how funding for agencies and programs are reported. For example, funding for Social Security and some other social services programs, Medicare, and interest payments on the national debt are classified as mandatory programs that are first in line for funding, while payments that are appropriated annually by Congress, as with national defense, are discretionary. In addition, funds for programs collecting separate taxes, like Social Security, have at times been handled differently in the federal budget A consistent problem with documents about federal financing is that numbers vary between sites. This is especially true for reports on the national GDP. Some of this is because additional information becomes available for later reports, there is back and forth between Congress and the Executive branch, and there are also differences in how information is summarized. Although frustrating, the reasons for these variations can eventually be understood, and they do not seem large enough to hide problems or trends Trying to summarize State of California budgeting is also challenging, with funds coming from both the public (primarily taxpayers) and other government sources (primarily the federal government). And according to Article IV, Section 12 subdivision (g) of the California State Constitution, the Legislature may not send to the Governor for consideration, nor may the Governor sign into law, a budget bill that appropriates more from the General Fund than the estimated revenues for that fiscal year. This is effectively a balanced budget requirement. But it does not prevent a California budget from authorizing spending that exceeds annual revenue. Instead, deficits are identified as problems with proposed solutions that can include transferring current year expenses to future budgets. And education funding in California has its own requirements that can lead to funds from one year being saved or spent in different years. State reports prepared by California's Legislative Analyst’s Office (LAO) provide good summaries of state fiscal matters, and the LAO's annual reports on the enacted budget (passed by the State Legislature and signed by the Governor), titled “Overview of the Spending Plan”, were very helpful (but the revised FY 2025-26 budget numbers are not yet available). Also, the LAO's annual report on “California's Fiscal Outlook” gives a good summary of the state’s future financial situation. But it was still hard to determine the relationship between federal funding and state administration of programs using these funds. |
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