Business and Labor Overview

Major Issues


Expenditures for business and labor programs in 1995-96 are proposed to decrease by about 1 percent compared to the current year. This decrease is the net result of a variety of changes in many programs and reflects a decrease in special fund spending partially offset by a slight increase in General Fund spending.

The budget proposes total state expenditures of $1.1 billion for business and labor programs in 1995-96. This level of spending is a decrease of $6.9 million, or 0.6 percent, from estimated current- year expenditures.

Figure 1 shows that expenditures for business and labor programs from all state funds reached a peak of about $1.1 billion in 1991-92, then declined slightly through 1993-94 and are projected to approach the previous peak level in 1995-96. Over the eight-year period shown in Figure 1, expenditures increased by $366 million, representing an annual average growth of 5.9 percent. When these expenditures are adjusted for inflation, total spending since 1988-89 has increased by an average of 2.6 percent annually. The General Fund share of program expenditures has declined from 47 percent in 1988-89 to 25 percent in the budget year. General Fund expenditures for the budget year, however, represent a slight increase compared to the current year.

Spending by Major Programs

Figure 2 provides the spending trends for selected major business and labor programs from 1993-94 through 1995-96. As the figure shows, only one agency (Trade and Commerce) shows a significant percentage change in proposed General Fund expenditures between the current and budget years (a 21 percent increase). Two other programs show large percentage changes in special fund expenditures: Corporations (a 28 percent increase) and the Energy Commission (a 48 percent decrease).

Major Budget Changes

Figure 3 summarizes major budget changes proposed for business and labor programs. As shown in the figure, there are a variety of relatively small dollar increases in General Fund program expenditures. These include $5.8 million for the Trade and Commerce Agency to increase its international trade and tourism programs and $2.3 million for the Department of Industrial Relations to pay higher facility rental costs in San Francisco.

The figure also shows proposals for several departments to decrease their expenditures for certain programs. For example, the figure shows a $19.5 million overall decrease in the Energy Commission's proposed expenditures. This reduction reflects the administration's proposal to provide only half-year funding for the commission and transfer its functions to a new Department of Energy and Conservation. The figure also shows a $4.4 million unallocated reduction in the Department of Insurance to address a revenue shortfall and a $1.5 million reduction to the Department of Housing and Community Development for reduced workload in housing programs.

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