Dan Walters

By Dan Walters
Published: Tuesday, Aug. 2, 2011 – 12:00 am | Page 3A

When Gov. Jerry Brown and state legislators were working on a state budget deal this year, they were talking about the general fund budget, which was finally pegged at $85.9 billion.

That, however, is much less than half of total state spending, which includes special funds with restricted purposes, such as the gasoline taxes that are spent on highways, proceeds from bond issues and – most importantly – federal funds.

The budget assumes that the feds will funnel $79 billion through the state, nearly half of which will pay Uncle Sam’s share of the big health and welfare programs. The Employment Development Department will spend nearly $20 billion in federal funds, most of it for unemployment insurance benefits, and other big chunks are ticketed for the University of California, the Department of Transportation and K-12 schools.

But wait, as television sales pitchmen often say, there’s more. The state auditor’s office calculated that during the 2009-10 fiscal year, the feds gave the state $120.7 billion for various purposes, including $23 billion in one-time “stimulus” funds.

And even those weighty numbers don’t include military and civilian procurement contracts, federal payrolls, other direct federal spending or Social Security payments.

Including them, the total hovers around a quarter-trillion dollars a year, 12-plus percent of the state’s economy. Or to put it another way, however the latest deal on federal spending works out – and it’s more a process than a hard-dollar agreement – California will take roughly 11 percent of any spending reductions and pay at least 13 percent of any new taxes.

California, to say the least, has a big stake in the outcome.

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