Staff
Ann Hollingshead
(916) 319-8305
State Budget and Federal Funding
Carolyn Chu
(916) 319-8326
Chief Deputy Legislative Analyst


Publications

State Budget Condition

To browse all LAO publications, visit our Publications page.



Report

California's Fiscal Outlook: LAO Projections, 2006-07 Through 2011-12

November 15, 2006 - Following a year in which major revenue increases were allocated to education and other state programs, California policymakers will face a much tougher budget in 2007-08. According to our updated forecast, the state’s budget faces operating shortfalls in excess of $5 billion in both 2007-08 and 2008-09, which will require significant actions to eliminate.


Report

California Spending Plan 2006-07: The Budget Act and Related Legislation

September 26, 2006 - The state spending plan for 2006-07 includes total budget expenditures of $128.4 billion, sharply increasing funding for education, providing targeted increases in several other program areas, and prepaying nearly $3 billion in budgetary debt. The expanded commitments included in this spending plan are in striking contrast to the four previous years, when policymakers were faced with closing major budget shortfalls. Despite much stronger-than-expected revenues, 2006-07 expenditures exceed revenues, with the difference being covered by the drawdown of carryover reserves available from 2005-06. Based on our out-year estimates of revenues and expenditures, we estimate that this imbalance will continue in 2007-08 and 2008-09 absent corrective action, with annual operating shortfalls in the range of $4.5 billion and $5 billion projected for this period.


Other

November 7, 2006 Ballot Measure Analyses for Public Display

July 25, 2006 - Our analyses of measures included in the November 7, 2006 special election. (Note that until August 15, 2006 there may be court ordered changes to these analyses and other portions of the voter information guide. See the Secretary of State's web site for the public display of the full voter information guide.)


Report

Major Features of the 2006 California Budget

July 7, 2006 - On June 27, 2006, the Legislature passed the 2006-07 Budget Bill along with implementing legislation which authorizes total spending of $127.9 billion, of which $101.3 billion is from the General Fund and $26.6 billion is from special funds. The 2006-07 budget reflects a sharply improving fiscal picture, brought about by continued stronger-than-expected growth in General Fund revenues. Spending under the plan increases by over 9 percent between 2005-06 and 2006-07, reflecting significant program augmentations, budgetary debt prepayments, and rising caseloads and costs in state programs. Based on our current projections of revenues and expenditures under the 2006-07 Budget Act policies, the state would continue to face operating shortfalls in the range of $4.5 billion to $5 billion in 2007-08 and 2008-09.


Report

Supplemental Report of the 2006 Budget Act: 2006-07 Fiscal Year

June 28, 2006 - Statements of intent for requests for studies adopted by the Legislature as a supplement to the 2006 Budget Act.


Handout

The 2006-07 Budget Package

June 27, 2006 - Summary of the 2007-08 budget package considered by the Legislature on July 20, 2007.


Handout

Various Budget Conference Committee Handouts

June 2, 2006 - Various handouts prepared for the Budget Conference Committee


Report

Overview of the 2006-07 May Revision

May 15, 2006 - The state’s strong revenue performance-a $7.5 billion increase since January-presents an extraordinary opportunity for the Legislature. Key decisions are: (1) how much of the increase should be provided to K-14 education, (2) should increased school funding be allocated to new initiatives or to strengthen existing programs and pay off debts, and (3) which state debt should be prepaid? We urge the Legislature to focus on regaining the state’s fiscal balance, particularly in light of the risks and uncertainties facing the state.


Other

Ninth Annual Analysis Quiz (Antiobesity Edition)

March 17, 2006 - Our ninth annual contest to test just how closely the members of the news media are reading our Perspectives and Issues (P&I) and Analysis books is over. This time, the analysts win. The contest rules provided that the first reporter to submit a completed and correct entry by the deadline would win. No correct entry was submitted by noon yesterday, so our hard-working analytical staff at LAO who helped to dream up these questions won this time out. In light of public health concerns over obesity, their prize was an assortment of bagels and muffins from Noah’s Bagels instead of the traditional prize of donuts.


Report

Automatic Spending for the Entire Judicial Branch is Not Justified

February 23, 2006 - The Governor’s budget proposes to expand the use of formula-based budgeting to the entire Judicial Branch. However, the proposal lacks a clear policy rationale and would likely lead to over budgeting of the courts. We recommend rejection of this proposal.


Report

Reject More Autopilot Spending From the Administration

February 23, 2006 - The administration proposes to switch the Governor’s Office budget from traditional budgeting to an automatic annual adjustment. The change would cost about $1 million annually. The administration has offered no policy reason why the current process is not working. We therefore recommend that the Legislature reject the proposal to put the Governor’s Office budget on autopilot spending.


Report

Delete Midyear Reduction Authority for More Honest Budgeting

February 23, 2006 - The Governor’s budget assumes that proposed authority for the administration to reduce departmental budgets during the year will decrease overall state costs by $258 million. Since 2002-03, enacted budgets have included similar provisions. In reality, however, the full magnitude of these savings is rarely achieved. We recommend that the Legislature delete the proposed authority. The administration should identify any specific proposed savings in departmental budgets during the spring budget process.


Report

Analysis of the 2006-07 Budget Bill

February 23, 2006 - Our annual detailed examination of the Budget Bill based on the Governor's Budget. It includes hundreds of findings and recommendations related to education, health and social services, criminal justice, transportation, resources, capital outlay, information technology, and local government.


Report

Highlights of the 2006-07 Analysis

February 23, 2006 - Highlights of our examination of the 2006-07 Governor's Budget.


Report

2006-07 Budget: Perspectives and Issues

February 22, 2006 - California has benefited greatly from over $11 billion in unanticipated increases in state revenues. Yet, due to its allocation of these funds, the 2006-07 Governor’s Budget would still leave the state with large structural budget shortfalls and an enormous amount of outstanding financial obligations. In this regard, the budget proposal misses an important opportunity to take advantage of highly favorable revenues to get the state’s fiscal house in order. We thus recommend that the Legislature reduce the amount of ongoing spending increases proposed in this budget, and use the savings to either increase reserves or pre-pay additional budgetary debt.