Legislative Analyst's Office

Analysis of the 2001-02 Budget Bill


Overview—Capital Outlay

Funding for capital outlay totals about $2 billion. Half of this amount is for projects financed using general obligation bonds and lease-payment bonds. Most of the remainder ($780 million) is provided through direct General Fund appropriations.

The 2001-02 Governor's Budget proposes $2 billion for capital outlay programs (excluding highway and rail programs, which are discussed in the Transportation section of this Analysis). This is spending on physical assets—college buildings, state parks and prisons. The proposed amount is a decrease of $116 million (6 percent) from current-year appropriations. Major increases are $349 million for the Department of Mental Health for a sexually violent predator facility and $137 million for the Department of Transportation for a District 7 office building in Los Angeles. These and other increases are offset by reduced amounts in resources (-$674 million, largely due to significant one-time appropriations in the current year) and judicial (-$50 million).

Spending by Area

Figure 1 compares the amounts appropriated for capital outlay in the current year to the amounts proposed in the budget for each general organizational area. As shown in the figure, most of the decrease is in the resources area.

Figure 1

State Capital Outlay Program

2000-01 and 2001-02
(In Millions)

 

2000-01
Appropriations

2001-02
Governor's Budget

Difference

Legislative, Judicial, and Executive

$69.2

$19.2

-$50.0

State and Consumer Services

54.7

141.7

87.0

Business, Transportation (excluding highways and rail), and Housing

26.9

170.7

143.8

Environmental Protection

0.3

3.1

2.8

Resources

972.2

287.1

-685.1

Health and Human Services

18.7

360.0

341.4

Youth and Adult Corrections

123.7

115.3

-8.4

Education

8.0

2.6

-5.5

Higher Education

826.1

862.3

36.2

General Government

11.3

32.0

21.6

Totals

$2,111.0

$1,993.9

-$116.2

Spending by Department

Figure 2 shows the amounts each department requested for capital outlay funding in 2001-02, the amounts included in the Governor's budget, and the future cost for these projects. As shown in the figure, an estimated $1.5 billion will need to be appropriated in the future to complete these budgeted projects. Thus, the request before the Legislature represents a total cost of nearly $3.5 billion.

Figure 2

Summary of Proposed 2001-02 Capital Outlay Program

All Funds (In Thousands)

 

Governorís Budget

Department

Requests

Proposed
2001-02

Future
Cost

Totals

Legislative, Executive, and Judicial

Judiciary

$1,958

$1,958

$24,658

$26,616

Office of Emergency Services

1,275

1,275

4,586

5,861

Justice

15,933

15,933

15,933

State and Consumer Services

California Science Center

$10,525

$10,525

$10,525

Franchise Tax Board

447

447

447

General Services

130,688

130,691

$75,451

206,142

Business, Transportation, and Housing

Transportation

$221,173

$150,859

$67,617

$218,476

Highway Patrol

9,694

9,694

6,338

16,032

Motor Vehicles

10,111

10,111

9,941

20,052

Resources

Tahoe Conservancy

$21,756

$21,756

$21,756

Conservation Corps

12,923

12,140

$11,667

23,807

Forestry and Fire Protection

65,572

61,029

36,516

97,545

Fish and Game

5,125

4,442

4,442

Wildlife Conservation Board

21,235

21,235

21,235

Boating and Waterways

9,425

8,541

10,413

18,954

Coastal Conservancy

56,435

56,435

56,435

Parks and Recreation

73,327

62,936

33,896

96,832

Santa Monica Mountains Conservancy

14,250

14,250

14,250

Water Resources

33,263

24,305

41,384

65,689

Environmental Protection

Air Resources Board

$2,199

$2,199

$2,199

Toxic Substances Control

1,118

900

$17,176

18,076

Health and Human Services

Health Services

$2,183

$2,183

$47,545

$49,728

Developmental Services

5,367

5,367

5,367

Mental Health

353,505

352,494

32,800

385,294

Youth and Adult Corrections

Corrections

$125,004

$92,692

$83,600

$176,292

Youth Authority

23,218

22,646

10,398

33,044

Education

Education

$2,568

$2,568

$2,568

Higher Education

Community Colleges

$143,901

$143,569

$278,216

$421,785

California State University

207,000

207,000

82,316

289,316

University of California

511,720

511,720

583,856

1,095,576

General Government

Food and Agriculture

$21,922

$21,922

$18,373

$40,295

Military

13,275

2,665

13,475

16,140

Veteransí Homes of California

5,697

5,448

1,298

6,746

Unallocated Capital Outlay

2,000

2,000

2,000

Totals

$2,133,834

$1,993,935

$1,466,862

$3,458,839

Funding Sources for Capital Spending

The Governor's budget proposes funding the capital outlay program from bonds, the General Fund, special funds, and federal funds. Figure 3 compares the sources of funds for the 2000-01 capital outlay program to those proposed for 2001-02. The budget proposes increasing the amount for direct appropriations from the General Fund by $108 million and from special funds by $39 million. General Fund appropriations include an increase of $203 million for the University of California. With regard to bond appropriations, the budget includes $667 million from general obligation bonds ($554 million for higher education) and $349 million from lease-payment bonds for the Department of Mental Health.

 

Figure 3

Sources of Funds for Capital Outlay Program

(In Millions)

Funds

2000-01

2001-02

General Fund

$650.9

$758.5

General obligation bonds

1,299.1

667.2

Lease-payment bonds

349.3

Special funds

176.1

215.2

Federal funds

6.2

3.7

Totals

$2,132.3

$1,993.9

Figure 4 displays the proposed funding for each department.

 

Figure 4

Proposed 2001-02 Capital Outlay
Program Appropriations by Fund Type

(In Thousands)

Department

Bonds

General

Special

Federal

Total

Legislative, Executive, and Judicial

Judicial Council

$1,958

$1,958

Emergency Services

1,275

1,275

Justice

15,933

15,933

State and Consumer Services

California Science Center

$10,525

$10,525

Franchise Tax Board

447

447

General Services (seismic retrofit)

$823

28,037

28,860

General Services (other)

101,831

101,831

Business, Transportation, and Housing

Transportation

$150,859

$150,859

Highway Patrol

9,694

9,694

Motor Vehicles

10,111

10,111

Resources

Tahoe Conservancy

$5,517

$15,043

$1,196

$21,756

Conservation Corps

12,140

12,140

Forestry and Fire Protection

61,029

61,029

Fish and Game

451

1,665

2,126

$200

4,442

Wildlife Conservation Board

21,235

21,235

Boating and Waterways

8,541

8,541

Coastal Conservancy

48,235

5,000

1,200

2,000

56,435

Parks and Recreation

43,058

11,030

7,348

1,500

62,936

Santa Monica Mountains Conservancy

14,250

14,250

Water Resources

1,000

23,305

24,305

Environmental Protection

Air Resources Board

$2,199

$2,199

Toxic Substances Control

$900

900

Health and Human Services

Health Services

$2,183

$2,183

Developmental Services

5,367

5,367

Mental Health

$349,287a

3,207

352,494

Youth and Adult Corrections

Corrections

$92,692

$92,692

Youth Authority

22,646

22,646

Education

Education

$2,568

$2,568

Higher Education

Community Colleges

$143,569

$143,569

California State University

207,000

207,000

University of California

203,311

$308,409

511,720

General Government

Food and Agriculture

$21,250

$672

$21,922

Military

2,629

$36

2,665

Veteransí Homes

5,448

5,448

Unallocated

2,000

2,000

Totals

$1,016,501

$758,517

$215,181

$3,736

$1,993,935

a Lease-payment bonds.

Bond Funding and Debt Payment

Over the last several years, the majority of capital outlay has been funded with bonds. In the 1990s, the voters authorized $30.1 billion in general obligation bonds. Most of these authorizations have been for K-12 schools ($13.1 billion), higher education ($4.8 billion), transportation ($5 billion), and natural resources ($5.1 billion). In addition to these general obligation bonds, the Legislature has authorized $7 billion in lease-payment bonds since 1990. These bonds have funded higher education facilities, prisons, state office buildings, state laboratories, and state homes for veterans.

Debt Payments

As shown in Figure 5, the state's debt payments on bonds will be around $3.2 billion in the budget year—an increase of 10 percent over current-year costs. There are two components of this debt:


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