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October 20, 2010 - In this short video, Todd Bland, Director of the Social Services Section at the LAO discusses the report "California's Other Budget Deficit: The Unemployment Insurance Fund Insolvency."
October 20, 2010 -
California's Unemployment Insurance (UI) program became insolvent in 2009, ending that year with a shortfall of $6.2 billion. Absent corrective action, the fund deficit is projected to increase to approximately $20 billion at the end of 2011. This report looks at the history of the UI program, compares California's program to those in other states, examines different scenarios for addressing the insolvency, and makes recommendations to the Legislature for solving this difficult problem.
October 6, 2010 - Presented to the Conference Committee on the Budget
September 29, 2010 - Presented to Joint Hearing of Senate and Assembly Committees on Revenue and Taxation
September 28, 2010 - Presented to Joint Hearing of Senate Committee on Elections, Reapportionment, and Constitutional Amendments and Assembly Committee on Elections and Redistricting
July 15, 2010 - In our required fiscal analysis of six proposed collective bargaining agreements, we find that the memoranda of understanding (MOUs), if adopted, would produce state savings in 2010-11, little net budgetary impact in 2011-12, and some increasing state costs for one or more years thereafter. Over the long term (many decades), the MOUs' proposed changes in retirement benefits could produce significant state savings, but no actuarial analysis of these changes has yet been submitted by the administration. The Legislature will face a major decision whether and how to approve the proposed continuous appropriations for economic terms of the six bargaining agreements.
June 23, 2010 - Presented to The Conference Committee on the Budget
May 3, 2010 - Presented to: Budget and Fiscal Review Subcommittee No. 5 On State Administration Hon. Denise Moreno Ducheny, Chair
April 27, 2010 -
Recent legislation authorized the Department of General Services (DGS) to sell and then lease back 11 state-owned office properties. The sale-leaseback is designed to free up the state’s equity in the buildings to provide one-time revenue for addressing the state’s current budgetary shortfall. We estimate that the sale of buildings would result in one-time revenue to the state of between $600 million and $1.4 billion, but that annual leasing costs would eventually exceed ownership costs by approximately $200 million.
Over the lives of these buildings, we estimate the transaction would cost the state between $600 million and $1.5 billion. The Legislature will need to weigh how these costs compare to other alternatives for addressing the state’s budget shortfall. In our view, taking on long-term obligations—like the lease payments on these buildings—in exchange for one-time revenue to pay for current services is bad budgeting practice as it simply shifts costs to future years. Therefore, we encourage the Legislature to strongly consider other budget alternatives.
(Short video introducing this report)
February 19, 2010 - A presentation on California's budget, economic outlook, and education funding. Presented at the California County Superintendents Educational Services Association Chief Business Officials Conference in Sacramento on February 19, 2010.
February 9, 2010 - Presented to: Senate Governmental Organization Committee Hon. Roderick Wright, Chair
February 3, 2010 - Presented to: Senate Budget and Fiscal Review Committee Hon. Denise Moreno Ducheny, Chair
February 3, 2010 - Presented to: Assembly Committee on Insurance Hon. Jose Solorio, Chair
January 27, 2010 - This report discusses some key issues facing the Legislature in the employee compensation area of the budget. In 2009–10, the state has achieved significant savings due to the Governor’s furlough program, which is being challenged in many court cases. For 2010–11, the Governor proposes various measures to reduce state personnel costs, including shifting pension contribution costs from the state to employees, unallocated reductions in personnel budgets of departments, and an across–the–board salary reduction for employees. These proposals would result in $2.5 billion in savings ($1.4 billion General Fund). We believe that employee compensation reductions are necessary due to the magnitude of the budget problem. Nevertheless, some of the administration’s proposals would face legal challenges or otherwise may be difficult to implement. Consequently, we recommend that the Legislature focus efforts to reduce compensation costs on pay reduction options. Special session.