Full Citation
Title: Balancing Budgets and Need during Recessions
Citation Type: Miscellaneous
Publication Year: 2019
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Abstract: California’s economic picture is unusually bright now. Unemployment is at multiyear lows and the state’s fiscal health is at historically high levels. But history tells us good times will not last forever. Sometime—and according to many forecasters, sometime soon—the nation and the state will go through a recession. This report considers what a recession would mean for certain key programs within California’s social safety net—a vital set of programs that aim to protect the health and wellbeing of the state’s most vulnerable residents. Even in the best of times, millions of Californians depend on these programs. When the economy turns down, the need for assistance rises, sometimes substantially. Past downturns have hit state finances hard, forcing painful spending cuts. How then will California be able to balance its budget, as the state constitution requires, while maintaining support for those who need it? It is helpful to look at the recent past in order to calibrate the difficulties that the state will likely face. California’s most recent downturn was the Great Recession of a decade ago, which came on the heels of the nation’s worst financial crisis since the Great Depression. During the Great Recession, the share of Californians who were poor grew from 12.2 percent to 16.6 percent, putting pressure on the state’s safety net. All told, the three large safety net programs registered $1.9 billion in cuts annually from 2008 to 2012, representing 15 percent of all cuts in state General Fund spending.
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Authors: Murphy, Patrick; Danielson, Caroline; McConville, Shannon; Paluch, Jennifer; Thorman, Tess
Publisher: Public Policy Institute of California
Data Collections: IPUMS USA
Topics: Labor Force and Occupational Structure, Other, Poverty and Welfare
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