The Economic Impacts Of Budget Cuts To The Csu And Uc Systems

1253 words - 5 pages

This paper will focus on the economic impacts of the policy decision by California Governor Brown to decrease funding of the California State University and University of California systems by way of looking at the impact on the economy of less college graduates. I will do this by looking at two variables. I will first look at the multiplier effect of the state putting money into the California State University system and what will happen as a result of the divestment due to the budget cuts. I will then look at the decrease in the median income due to the fact that the budget cuts will cause a decrease in enrollment which means there will be fewer college graduates and college graduates earn more money than their non-graduate counterparts and. I will look at the decrease in median income due to less college graduates as well multiplier effect of college graduates and the resulting loss of tax revenue due to this decrease.
The full impact of the loss of these graduates needs to be expressed because most of the change occurs from the chain of expenditures that results from college graduates having a higher median income than their non-graduate peers. This chain of spending that is the result from the state funding higher education is called the multiplier effect. This is an economic issue because there is a quantifiable change in the economy due to these budget cuts in the California State University system which means there is less money moving around and there will be fewer college graduates.
The budget proposed by Governor Jerry Brown for the fiscal year of 2011-2012 will have a decrease of 4.5% from the total funds and a decrease of 12.5% from the general fund to the California State University system, a total of $542.4 million. (California State Governor’s Office) The funding would be cut from $4,813.6 million to $4597.3 million from the state’s total funds and a cut from $2,617.4 million to $2291.3 million from the state’s General Fund. (California State Governor’s Office) According to a report presented to the Office of the Chancellor by IFC International for every one dollar spent by the state on the California State University system “the CSU generates $5.43 for California’s economy annually. When enhanced earnings by graduates are taken into account, the annual return rises to more than $23 for each $1 invested.” (ICF International) This, however, does not necessarily mean than the $542.4 million in cuts is multiplied by $23, resulting in a total decrease of $12.475 billion in spending. This is because the relationship isn’t necessarily completely linear. Since the decrease is only 8.5% then the relationship might still be linear, which would mean that there will be $12.475 billion in spending lost. The other reality might be that it is not linear, which would mean the total loss of spending would be less than $12.475 billion.
Another area I will look at for the California State University system’s budget cuts is the resulting...

Find Another Essay On The Economic Impacts of Budget Cuts to the CSU and UC Systems

Educational Budget Cuts: Denying Students the Opportunity for Potential

1707 words - 7 pages cuts in economic and community development. Also affected by the budget cut will be the Department of Public Welfare in Mental Health Services, where 1,500 jobs are going to be eliminated (Public Welfare Funding). However, the highest budget cuts will be in the area of public education, with K-12 and higher education funding being reduced by about 1.6 billion dollars. Each school district in the Commonwealth of Pennsylvania will receive, on

The Economic and Social Impacts of the Oklahoma City Thunder

1121 words - 4 pages Oklahoma City. When they get to Oklahoma City they are renamed the Oklahoma City Thunder. The Moving of the Seattle Super Sonics to Oklahoma City and the creation of the Oklahoma City Thunder have brought many positive impacts to the Oklahoma City metro and to the entire state of Oklahoma both economically and socially. The creation of the Oklahoma City Thunder has had huge economic effects on the local and state economies. According to the

The Social and Economic Impacts of The Black Plague

1810 words - 7 pages The Black Death is considered to be "the most severe epidemic in human history" that decimated Europe from 1347 to 1351 (Witowski). Not only did the Black Death depopulate Europe, but it also had long lasting social and economic effects as well. The social effects consisting of culture, morals, values, and social norms. The economic effects consisting of labor, payment, and the foundation of feudalism. However one would call it, the Bubonic

Effects of the 2005 budget on economic activity, price stability, economic growth, full Employment and inflation.

943 words - 4 pages everyone because the lives of our citizen's matter, the decisions the Government may affect their mortgages, their businesses, and whether they can find a job.He said the Budget was brought down at a time when more Australians are in work than ever before. Our unemployment rate has fallen to a low unmatched for 28 years.The budget will have a number of effects on a number of different areas of the economy including the economic outlook, tax cuts

What are the Social, Political, and Economic Impacts of Industrialization?

687 words - 3 pages After the Civil War, the United States had a total transformation. The country used to be mainly agricultural, but by the late 1800’s it became the world's leading industrial nation. Railroads and new inventions emerged rapidly along with big businesses. Huge corporations controlled the economy and a large amount of job opportunities emerged. Sadly, workers were mistreated and the workplace was a dangerous place to be, but that did not stop

Negative Effects of Budget Cuts in Education

1235 words - 5 pages All throughout the United States for the past several years, states are “hurting because of falling state revenues,” (Emeagwali), and schools are trying to cope with tremendous budget cuts that are resulting in less funds provided for educational services. These cuts are putting pressure on everyone invested in the education system, including students, teachers and any other administration within them (qtd. in Johnson 2), and the reduced budget

Global Impact of U.S. Defense Budget Cuts

1553 words - 6 pages The Unites States economy has been a subject of debate for as long as American politics have existed, however it has never been as closely scrutinized as it is in these times. As the global economy becomes more boundless, actions taken to adjust our economy are felt as ripple effects world-wide, or even as a tidal wave. With a current and future prediction of austere budget environments in the U.S. for the foreseeable future, we must examine

Discuss the ethical, political and practice implications on accountability in nursing as a result of the current economic climate and recent cuts in health care spending.

3588 words - 14 pages likely to be affected by recent economic climate, therefore this issue will be discussed in the next paragraph.Training and CPDAs observed by Duffin (2010), training courses and conferences for nursing staff are the first to be affected by budget cuts. In 2009, one third of the nursing staff was not able to take part in mandatory training courses such as basic life support, moving and handling, infection control or child protection. Spending cuts and

The Economic Systems

2477 words - 10 pages America. Each model has been seen and judged both from inside and outside its parameters. Individual freedom is one of the hallmarks of the market economy -- each person is free to choose how they wish to put their income to use. Adam Smith, hailed as the founder of classical economics, suggested that the sum of individual's self-interest would produce results that corresponded to the overall good of society. The Economic systems: There are

Evaluating the Economic, Social and Environmental Impacts of Building the AswanDam

3109 words - 12 pages Evaluating the Economic, Social and Environmental Impacts of Building the AswanDam Introduction At 4,132 miles, the Nile River is the largest river in the world. It has its origins in Burundi, south of the equator, and flows northward through Uganda and into Sudan eventually flowing through Egypt and finally draining into the Mediterranean Sea. From Lake Victoria (its major source) to the Mediterranean Sea the

The impact of world war one on the homefront - social, political and economic impacts.

1561 words - 6 pages The First World War impacted significantly on the homefronts of the participating nations in many different social, political and economic areas. There was a widespread restructuring of primary industry with a large orientation towards militarism. There was massive political change where new systems of power were introduced that gave governments a range of new powers including the control over industry. The civilian population had severe

Similar Essays

Analysis Of The Likely Impacts Of The 2003 04 Australian Federal Budget On Australia's Economic Growth, Unemployment And Inflation.

1240 words - 5 pages aggregate demand to shift again to AD3. This increase in spending due to the multiplier effect will lead to an increase in GDP, which will in turn, increase economic growth.Another important factor in the budget that encourages economic growth is the international tax agreement reform, which by offering tax cuts for businesses with oversees components, the government will be able to stimulate the investment component of the GDP and therefore, stimulate

Economic And Social Impacts Of The Olympics

1921 words - 8 pages About The Games.” Huffington Post. 7 Feb. 2014. Web. 31 March 2014. History.com Staff. ”The Olympic Games.” History.com. A+E Networks, 2010. Web. 28 March 2014. Malfas, Maximos, B. Houlihan, and E. Theodoraki. "Impacts of the Olympic Games as mega-events." ICE, 2004. Print. Rishe, Patrick. “How Does London's Olympics Bill Compare to Previous Games?” Forbes. n.p. 5 Aug. 2011. Web. 28 March 2014. Wilson, Stephen. “Size, scale and cost of Sochi Olympics pose challenge for future Winter Games.” Fox News. Associated Press. 20 Feb. 2014. Web. 29 March 2014.

The Economic Impacts Of Obamacare Essay

1708 words - 7 pages health insurance from their employers. While this sounds like a winning concept, many take issue with not only how the government is planning on financing it (through an increase in taxes), but the potential economic impacts on both companies and private individuals. IV. Economic Elements and Implications of the ACA The Affordable Care Act affects everyone; from the lone individual, to the large corporation, to the economy in general. We will now

Effects Of Budget Cuts On Career And Skilled Base Curriculums

797 words - 3 pages recession. Many Americans and elected officials have advocated against government spending, since this country has suffered economic turmoil. The government, apparently, must use their budget efficiently to fund necessary programs rather than simply wasting large amount of money on counterproductive programs. Unfortunately, many states may unwisely implement cuts on programs that can benefit the future workforce, while maintaining programs that can