Masters Thesis

Major factors that influence state revenue forecasting: reducing the state of California's allocations & expenditures

The state of California’s budget deficits have been a problem for decades. There are many signs and published reports demonstrating that financial stability is needed. The revenues for the state of California are volatile, the debt is growing out of control, and operational costs are on the rise. The allocations and expenditures in California’s budget need to be reduced in order to address this crisis. There are countless alternatives to consider in repairing these years of compounding deficits. There were four key alternatives that this study focused on. The four alternatives consist of improving operational process efficiency, setting a limit and requirements for new allocations, creating and promoting citizen engagement, and maintaining the status quo. This study identifies and applies the evaluative criteria of political feasibility, effectiveness, timeliness, and equity to the alternative selection process. The alternative that most productively and effectively meets the set criteria is improving operational process efficiency. This alternative has some short term consequences. They can be overcome by support from all individuals and departments of the state. There are also constraints which can be minimized. The state of California’s financial recovery requires immediate action. Reducing allocations and expenditures by improving operational process efficiency is a productive beginning. By setting limits and requirements for new allocations and increasing citizen engagement, the recovery can be ignited.

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