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Federal budgeting is a complicated process as a number of aspects should be included. Thus, to make sure that all the items are considered while federal budget simulation, it is crucial to remember the following, the budget consists of spending and revenue sections and the ability to make those balanced is an art of budget development. However, each year the budget of California suffers from deficit.

This encourages many economists and politicians to bother themselves with the budget development. It is impossible to reduce the budget deficit by only cutting spending, the revenue should be raised as well as only in this case the balance may be achieved and the participants of the budget formation are not going to suffer too much.

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The main aspects which are to be covered in each of the sections are as follows. The spending of the budget should cover education (K-12 education, community colleges and US $ CSU support), healthcare, human services, criminal justice, pension and retiree health.

The revenue section includes different types of taxes such as income and sales taxes, corporation taxes, business and individual tax credits, car and property taxes, and other taxes. Thus, considering closer each of the aspects it is possible to get to know which items are to be cut and what sections may be increased in financing.

To make sure that the future of the state is in safety, it is important to increase the spending on K-12 education by means of paying attention to each of the pupils which will help to raise the learning outcomes. The country needs professionals to continue its development and financial success in the future. Community colleges are also too important for the society to save on them.

Thus, it is necessary to get the budget on a more secure financial footing by means of financing the college programs. UC and CSU programs should also be supported and additional finances should be stored with the purpose to avoid tuition increases. Healthcare sector should also suffer some changes that are to result in providing the revision of the Medi-Cal, Healthy Families and Adults Health Care.

Even though the government is bothered with budget deficit, the healthcare is important. Thus, to make sure that the programs considered above are followed, the cut of the financing of the current and future workers should be held along with the increase of the employee benefits on the retirement.

This will increase the long-term expanses, but cut the costs in the short-term period. The government is to limit the spending on the CalWORKs childcare program for those have already been participating in one of the federal programs. Additional costs should be spent on disabled people.

Criminal justice should be financially supported by means of the increasing financing of the rehabilitation programs. The hybrid retirement plan should be confirmed aimed at sufficient long-term savings. Therefore, the spending section of the federal budgeting should have the already discussed vision.

To make sure that the budget is balanced and usefully developed, the revenues should be discussed. The income tax should be raised for those who have income over $1 million (1%) and $2 million (3%). This revenue should cover the spending in educational sphere. Sale tax on legal, environment, and personal services should be raised, however, the corporation tax should be reduced. The government should provide a credit on hiring new employees and reduce the taxation on the income that is going to be spent on college education.

The government is to eliminate the vehicle license altogether as the poor are imposed with the higher percentage than the rich under the current conditions. Nothing should be changed within the current property taxation. Considering the other taxes, the taxation on cigarettes should be increased.

On the one hand, people may stop smoking due to the increase price of the cigarettes; on the other hand, the taxes got from this tax should cover the spending of cancer treatment. Thus, the revenue to the state budget should be either left unchanged or increased in some cases to cover the spending in the previous sections. The calculation and simulation has allowed us to create the ideal budget for California as in this case the budget is balanced and it does not overstep the deficit threshold.

Therefore, it may be concluded that having discovered an appropriate mix of spending cuts and revenue increase the budget deficit may be eliminated. The balance should be based on the legal documents and cuts and increases should not be spontaneous.

Having followed the budget simulation tool it was discovered that the balance in the budget might be achieved by means of the increase of the expenses and increase of the revenues, still, in some cases the expenses should be cut as well. Thus, the federal budget simulation conducted and discussed in this paper makes it possible to draw the conclusion that only a balanced cutting spending and raise of the revenues may help the state to get rid of the budget deficit and to create a successful budget for 2012-2013.