December 1998

LAO Recommended Legislation

General Government

Eliminate Agricultural Labor Relations Board and Transfer Duties to the Public Employment Relations Board
Develop Statewide Multiyear Capital Outlay Plan
Improve the Structure and Nature of State Civil Service
Eliminate State Regulation of Certain Occupational and Professional Activities
Consolidate Tax Boards Into a New Department of Revenue
Submit Redevelopment Plans to State Attorney General
Make School Districts Responsible for Benefits
Rethink Cal-Vet Home Loan Program
Authorize High Occupancy Toll Lane Pilot Project
Fund Transit Rolling Stock

Agricultural Labor Relations Board

Eliminate Board and Transfer Duties to the
Public Employment Relations Board

Recommendation

Eliminate the five-member Agricultural Labor Relations Board (ALRB) along with related positions and transfer the remaining staff and the responsibility for enforcing the Agricultural Relations Act to the Public Employment Relations Board (PERB).

Rationale

The workload for the board has declined sharply and permanently since it was created in 1975. The PERB's responsibilities in the areas of public education and state employees are similar to the ALRB. Given the ALRB's ongoing low workload and the PERB's ability to enforce the Agricultural Labor Relations Act, we recommend transferring the responsibilities for this act to PERB.

LAO Reference

Please see our 1997-98 Analysis, page G-46.

LAO Contact

Gerald Beavers or Paul Guyer: 322-8402


Capital Outlay

Develop Statewide Multiyear Capital Outlay Plan

Recommendation

Enact legislation requiring the development of a multiyear capital outlay improvement plan that identifies all needs and priorities for development of the state's infrastructure.

Rationale

Estimated capital outlay needs over the next five years for the various state department and K12 education totals about
$37 billion. The Legislature, however, does not have a comprehensive plan that identifies these needs, establishes priorities, or provides a financing plan. The development of such a plan is essential in order to assure that state infrastructure needs are met in a timely manner.

LAO Reference

Please see our 1991-92 Perspectives and Issues, page 227.

LAO Contact

Gerald Beavers or Chuck Nicol: 322-8402


 

Civil Service

Improve the Structure and Nature of State Civil Service

Recommendation

Develop legislation to make significant improvements to the state's civil service system.

Rationale

Existing civil service laws and rules have resulted in significant problems such as (1) preoccupation with process over results, (2) impediments to effective conduct of programs, and (3) barriers to personal and career development of employees. We suggest the Legislature use a set of guiding principles to review and craft legislation to correct these and other problems in the structure and nature of the civil service system.

LAO Reference

Please see our 1995-96 Perspectives and Issues, page 153.

LAO Contact

Gerald Beavers or Todd Clark: 322-8402


 

Consumer Affairs

Eliminate State Regulation of
Certain Occupational and Professional Activities

Recommendation

Enact legislation to eliminate the state's regulation of activities such as barbering, cosmetology, appliance repair, home furnishings, and shorthand reporters.

Rationale

The state should regulate activities in order to protect the public from potential serious injury or death, severe financial harm, and where there are federal mandates. If an activity does not meet these criteria, we believe that state regulation is not warranted.

LAO Reference

Please see our 1993-94 Analysis, page G-14.

LAO Contact

Gerald Beavers or Megan Atkinson: 322-8402


 

Board of Equalization and
Franchise Tax Board

Consolidate Boards Into a New Department of Revenue

Recommendation

Enact legislation to create a Department of Revenue to carry out state tax administration activities.

Rationale

Integrating the existing tax administration functions into a single department should increase accountability, clarify management authority, encourage efficiency, and enhance public perception of these activities. In addition, consolidation should achieve improved services and long-run savings even though there would be increased costs in the short-run.

LAO Reference

Please see our 1993-94 Analysis, page H-14.

LAO Contact

Gerald Beavers or Megan Atkinson: 322-8402


Redevelopment

Submit Plans to State Attorney General

Recommendation

Require cities and counties to submit proposed redevelopment plans to the state Attorney General for a finding of consistency with state law.

Rationale

The state's redevelopment oversight system is decentralized and weak. Community redevelopment law oversight efforts by local agencies, the Department of Finance, and private parties are not sufficient to protect the state's significant fiscal and policy interests in redevelopment.

LAO Reference

Please see our policy report Redevelopment After Reform: A Preliminary Look, December 29, 1994.

LAO Contact

Marianne O'Malley: 445-6442


 

State Teachers' Retirement System

Make School Districts Responsible for Benefits

Recommendation

Make the State Teachers' Retirement System (STRS) fully supported by local school districts and phase out state subsidy of the retirement benefits for teachers.

Rationale

Teachers in K-12 schools and the community colleges are employees of those local entities. The cost of retirement benefits for these local employees should be the responsibility of the individual districts rather than the state. Currently, however, the state subsidizes teachers' retirement benefits through annual General Fund appropriations in the hundreds of millions of dollars.

LAO Reference

Please see our 1995-96 Perspectives and Issues, page 185.

LAO Contact

Gerald Beavers or Todd Clark: 322-8402


 

Department of Veteran Affairs

Rethink Cal-Vet Home Loan Program

Recommendation

In the short term, enact legislation to strengthen internal and external oversight of the Cal-Vet program to ensure proper management. In the long term, amend state law to direct the orderly phase-out of issuance of new Cal-Vet home loans. Subject to voter approval, surplus Cal-Vet funds should be directed to programs that will benefit both aging war veterans and state taxpayers.

Rationale

The Cal-Vet home loan program has not been competitive with other private- and public-sector loan programs which offer better interest rates and terms. Additionally, the Cal-Vet loan portfolio is declining due to federal restrictions on tax exempt state bonds (which fund the program) and the aging of the war veteran population. Significant financial and operational problems have eroded the state's equity (assets less liabilities) in the Cal-Vet fund by $200 million.

LAO Reference

Please see our policy brief Rethinking the Cal-Vet Loan Program, January 1998.

LAO Contact

Dan Carson: 445-4660


 

Transportation

Authorize High Occupancy Toll Lane Pilot Project

Recommendation

Authorize the construction of high occupancy toll lanes, either publicly or privately owned, as a pilot program.

Rationale

Charging drivers for the cost of their driving can encourage more efficient use of the road system. (Through the use of tolls, for example.)

In order to determine whether a more widespread use of road pricing is advisable, a pilot program should be undertaken. One alternative is to study the feasibility and congestion-reduction benefits of high occupancy toll (HOT) lanes. The HOT lanes are similar to traditional high occupancy vehicle (HOV) lanes, except that non-HOVs can pay a toll to use HOT lanes. Such a pilot program could also evaluate the effect on low-income drivers and how any adverse impact can be mitigated.

LAO Reference

Please see After the Transportation Blueprint: Developing and Funding an Efficient Transportation System, March 5, 1998,
page 12.

LAO Contact

Dana Curry: 445-5921


 

Transportation Revenues

Fund Transit Rolling Stock

Recommendation

Amend the State Constitution to permit the use of gas tax revenues for transit rolling stock.

Rationale

The State Constitution (Article XIX) restricts the use of fuel tax revenues (gas and diesel taxes) to (1) construction, maintenance, and operation of roads and highways; or (2) construction and maintenance of mass transit guideways and facilities (mainly rail tracks). Transit rolling stock (mainly railcars and buses) is the only type of transportation capital outlay that currently cannot use fuel tax revenues under Article XIX.

Modifying Article XIX to allow fuel tax revenues to be used for transit rolling stock would allow greater flexibility in the use of fuel tax revenues for the most cost-effective transportation projects.

LAO Reference

Please see After the Transportation Blueprint: Developing and Funding an Efficient Transportation System, March 5, 1998,
page 3.

LAO Contact

Dana Curry: 445-5921


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