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June 2, 2017 - Presented to: Budget Conference Committee
May 16, 2017 -
As part of his May Revision, the Governor proposes the state borrow $6 billion from the Pooled Money Investment Account (PMIA) to make a one-time payment to reduce state pension liabilities at CalPERS. The Governor proposes that the state and General Fund and special funds repay this loan with interest over a period of about eight years.
As we discuss in this brief, we think the plan would probably save the state money over the long run, although uncertainties remain about the likelihood and magnitude of this benefit. However, the administration is asking the Legislature to approve a large commitment of public resources with insufficient consideration. The administration has provided few of the legal or quantitative analyses that the Legislature should expect when receiving a request of this magnitude and complexity. Moreover, the administration has introduced this proposal as part of the May Revision—with only weeks before the constitutional deadline for the Legislature to approve the budget. We doubt all of the issues we raise in the brief can be reviewed by the June 15 deadline. However, there is no reason that the Legislature must make a decision before June 15. We recommend the Legislature wait to act on this plan until after the administration has submitted more analysis. At that point, the Legislature could decide whether or not to approve the proposal.
May 16, 2017 -
In this analysis, we discuss the Governor’s cannabis-related May Revision proposals for seven state departments. Based on our initial review of these proposals, we provide (1) overarching comments and (2) recommendations on each department’s specific proposal.
LAO Bottom Line. The Governor’s May Revision proposes 201 positions and $43.2 million in 2017‑18 from various funds to conduct cannabis regulation-related activities. These resources are provided across seven state departments. Based on our initial review, we recommend making key policy choices regarding how the cannabis industry will be regulated before finalizing budget decisions, as well as limiting the amount of out-year funding provided to departments given the high level of uncertainty regarding future workloads. Accordingly, we also provide recommendations on each department’s specific proposal.
May 5, 2017 - The CalSTRS board recently acted to change assumptions used to estimate its unfunded liabilities, including the key assumption about future investment returns--sometimes referred to as the "discount rate." These and other recent developments have eroded CalSTRS' funding situation. This brief details these changes and describes how they will affect the state, school and community college districts, and teachers
May 4, 2017 - Presented to the following Senate Budget and Fiscal Review Subcommittees: Resources, Environmental Protection, Energy, and Transportation Health and Human Services State Administration and General Government
April 25, 2017 - In a Spring Finance Letter, the Governor proposes using remaining funds from a 2009 settlement agreement to provide the Secretary of State a three-year funding increase of $463,000 per year and three positions to support the agency’s activities related to the implementation of SB 450. We recommend that the Legislature (1) use this proposal and the implementation of SB 450 to reconsider the state’s role in paying for elections administration and (2) consider the appropriate level, duration, and source of funding to support the Secretary of State’s SB 450 activities.
April 24, 2017 - Presented to: Assembly Budget Subcommittee No. 4 on State Administration
April 20, 2017 - Presented to Senate Budget and Fiscal Review Subcommittee No. 4 on State Administration and General Government
March 30, 2017 - Despite reaping regular benefits from county administration of elections, the state only sporadically provides funding to counties for election activities. The state has a clear interest in secure, timely, and uniform elections. We recommend the Legislature develop a new financial relationship between the state and counties to (1) direct statewide elections policy and (2) provide a reasonable and reliable level of financial support that reflects the benefits to the state of county elections administration. The pending implementation of a new voting model via 2016 legislation, SB 450, provides an opportunity for the Legislature to consider how to structure such a financial relationship to ensure consistency across counties as well as address other elections issues.
March 24, 2017 - We recommend that the Legislature amend the proposed budget bill language for Control Section 4.11 to improve transparency and legislative oversight over the state’s workforce.
March 23, 2017 - This report updates our November 2016 report on Los Angeles' bid for the 2024 Olympic and Paralympic Games. Los Angeles' bid greatly reduces financial risks that have plagued prior hosts of the Games, as we discussed in November. Since then, organizers have released new plans for the Games' Opening and Closing Ceremonies, an updated budget, and a study of potential economic benefits for Los Angeles. This report recaps those developments and others. We discuss the federal government's significant role in a possible Los Angeles Games and the potential role of state legislative oversight in helping keep public financial risks low, if Los Angeles is chosen over Paris to host the Games.
Correction 5/25/2017: Changed date for new L.A. football stadium's first Super Bowl to 2022, following a decision on this matter by NFL team owners.
March 14, 2017 - We reviewed the proposed memorandum of understanding (MOU) between the state and Bargaining Unit 16. This bargaining unit is represented by the Union of American Physicians and Dentists (UAPD) and consists of state employed physicians, dentists, and podiatrists. This analysis fulfills our requirement under Section 19829.5 of the Government Code.
March 14, 2017 - This report examines the Savings Plus Program (the state's optional retirement savings plan for state employees). We find that, although anyone can benefit from saving money for their retirement, certain groups of state employees--those who work less than a full career, earn lower salaries, and are hired in the future and earn less generous retirement benefits as a result of recent policy changes--could significantly improve their financial security in retirement by saving more money on their own during their working career. In this report, we discuss our findings and options the Legislature can consider to improve employee participation. This report reflects policy changes established through labor agreements that require state employees to contribute a percentage of pay to prefund retiree health benefits and reduce retiree health benefits for future employees. Some of these agreements currently are pending legislative ratification.
March 3, 2017 - The Governor’s budget proposes several actions related to public works labor enforcement, including steps to address a structural funding problem the Governor has identified. In this analysis, we discuss our findings and recommendations relative to this proposed actions.
March 3, 2017 - The Governor’s budget proposes $11 million in special funds and 82.5 positions, phased in over three years, for the Division of Labor Standards Enforcement to pursue additional investigations of labor standards violations. In this analysis, we provide our assessment of the Governor’s proposal and raise several concerns that we believe should be addressed before any funding and staffing are approved.