How does it give a state money for one objective, and withhold it for another? In the context of California’s current budget problems, grant money from the state’s general fund—which is made up of taxes—is the most obvious problem. It’s what keeps most of the state’s transportation projects in-house. Some of the projects do get dollars from the state in the form of road and bridge maintenance grants, but the vast majority have almost exclusively received their funds through other methods.
The state’s general fund is so bloated that it’s almost impossible to run a public sector project on a realistic budget.
The state gets just a handful of these dollars each year. The California State University system gets two, and the University of California spends nearly $50 million each year. The University of California system received $2.5 billion in grant money in 2016, of which roughly two-thirds went to housing and other university needs. This means California has a total budget of $6.4 billion, making it the eighth-biggest state in the nation and slightly larger than the combined budgets of most of the states. Even if we assume all of the money in the general fund goes directly to funding university projects, it still barely covers the costs of running the entire system with an annual average of just $2 billion. There are two good reasons. The first is that California’s general fund is so bloated. It is the largest state fund in the United States, and almost every component of it is allocated on a per-capita basis. The funds allocated by the state for basic state operations, such as public health and education, are almost entirely in the general fund, and the state spends the vast majority of its general fund money on paying down debt and building roads, bridges, and transit systems.
The second is that the state’s spending doesn’t account for how many other types or functions it has. The California State University system’s tuition, for example, is about $14,000, plus a small loan that subsidizes it. But the system also sends out around 12,000 students a summer semester, provides free housing for more than 13,000, and provides almost 300 job placements per year on the student job fair circuit. That means that the system does have much more than a few billion dollars in its coffers, and when you don’t account for these other purposes, it’s hard to figure out how much the state is actually spending on higher education.
So what does it mean
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