To browse all LAO publications, visit our Publications page.
March 13, 2009 - The budget package of $42 billion in solutions adopted by the Legislature and the Governor in February was an impressive step in addressing the state’s monumental budget shortfall. The budget uses both sides of the ledger—revenue increases and spending reductions—to attack the state’s dire fiscal situation. Unfortunately, the state’s economic and revenue outlook continues to deteriorate. Even in the few weeks since the budget was signed, there have been a series of negative developments. Our updated revenue forecast projects that revenues will fall short of the assumptions in the budget package by $8 billion. Moreover, a number of the adopted solutions—revenue increases and spending reductions—are of a short–term duration. Thus, without corrective actions, the state’s huge operating shortfalls will reappear in future years—growing from $12.6 billion in 2010–11 to $26 billion in 2013–14.
March 13, 2009 - Due to the very serious nature of the state’s fiscal problems and the likelihood that the Legislature will be discussing budget issues on a more accelerated pace this year, we are departing from our traditional approach of publishing our Analysis and our Perspectives & Issues documents. Instead, we will release a series of reports aimed at addressing the 2009-10 budget situation. Most of these publications will relate to specific policy areas: Health, Social Services, Resources, Transportation, Proposition 98 Education Programs, Higher Education, Criminal Justice, and General Government. The final report in the series, The 2009-10 Budget: Perspectives and Issues, will be released on February 18th, 2009.
March 10, 2009 - The recently enacted federal economic stimulus package commits a total of $787 billion nationwide. We estimate that California will receive over $31 billion in monies that can be used to address budget shortfalls and supplement existing state spending and billions more in competitive grants. The recently enacted state 2009-10 budget specifies that if the amount available to address the state's budgetary problems is less than $10 billion, then annual state program reductions of nearly $1 billion and revenue increases of about $1.8 billion will go into effect. Based on the enacted state 2009-10 budget we estimate that $8 billion would be available. Given the state’s continuing economic struggles, however, it may be possible to use additional federal education dollars for budgetary relief. We identify key issues that the Legislature should consider in making decision regarding these new federal funds, including ways to maximize their benefit to the state General Fund and to provide appropriate oversight on the use of the federal monies.
February 26, 2009 - Included are analyses of Propositions 1A through 1F and an overview of the state budget.
February 20, 2009 - Presented to the California County Superintendents Educational Services Association (CCSESA) Chief Business Officers (CBO) conference.
January 14, 2009 - Deputy Legislative Analyst Michael Cohen and Principal Fiscal and Policy Analyst Jason Dickerson the LAO report, California’s Cash Flow Crisis—the second in the LAO’s 2009-10 Budget Analysis Series.
January 14, 2009 - Balancing the budget—by increasing state revenues and decreasing expenditures—is the most important way that the Legislature can shorten the duration and severity of the state’s cash flow crisis. Absent prompt action to begin addressing the state’s colossal budget gap and other measures discussed in this report specifically to help the state’s cash flows, state operations and payments will have to be delayed more and more over time. In the event that the Legislature and the Governor are unable to reach agreement to balance the budget by the summer of 2009, major categories of services and payments funded by the state may grind to a halt. This could seriously erode the confidence of the public—and investors—in our state government. To avoid this, it is urgent that the Legislature and the Governor act immediately to address the budgetary and cash crises that have put the state on the edge of fiscal disaster.
January 8, 2009 - Mac Taylor's press conference in which he discusses the LAO's Overview of the 2009-10 Governor's Budget
January 8, 2009 - The Governor’s budget framework makes a good faith effort to close a colossal $40 billion budget gap. The Legislature, however, can improve the plan by making further use of the ballot, adopting more strategic programmatic reductions and revenue increases, and reducing the reliance on borrowing. There are no easy paths to solving the crisis. But it is urgent that the Legislature and Governor act immediately to address a budgetary and cash situation that has the state on the edge of fiscal disaster
December 8, 2008 - Handout used in conjunction with Mac Taylor's testimony to the Joint Convention of the California Legislature, December 8, 2008.
December 1, 2008 - The role of the Legislative Analyst's Office is to review state programs and make recommendations to the Legislature as to how the state can operate more effectively and efficiently. This report summarizes various changes to law that we have recommended in recent years. Recommendations in this report include, among many others: (a) Simplify and Consolidate K-12 General Purpose Funding, (b) Promote the Adoption of Health Information Technology in California, (c) Fund Inmate Education Programs Based on Actual Attendance, and (d) Increase and Index the State Gas Tax.
November 20, 2008 - The state’s struggling economy has severely reduced expected revenues. Combined with rising state expenses, we project that the state will need $27.8 billion in budget solutions over the 2008-09 and 2009-10 fiscal years. The state’s revenue collapse is so dramatic and the underlying economic factors are so weak that we forecast huge budget shortfalls through 2013-14 absent corrective action. From 2010-11 through 2013-14, we project annual shortfalls that are consistently in the range of $22 billion. Closing a projected $28 billion budget shortfall will be a monumental task. We believe the Legislature must take major ongoing actions by both reducing base spending and increasing revenues. If the Legislature has any hope of developing a fiscally responsible 2009–10 budget, it must begin laying the groundwork now.
November 11, 2008 - Mac Taylor discusses the LAO's Overview of the 2008 Special Session Proposals.
November 10, 2008 - We concur with the administration’s assessment that the state’s struggling economy signals a major reduction in expected revenues. Combined with rising state expenses, we project that the state will need $27.8 billion in budget solutions over the next 20 months. The state’s revenue collapse is so dramatic and the underlying economic factors are so weak that we forecast huge budget shortfalls through 2013‑14 absent corrective action. From 2010‑11 through 2013‑14, we project annual shortfalls that are consistently in the range of $22 billion.