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March 6, 2014 - Presented to Senate Budget and Fiscal Review Subcommittee No. 2 on Education
March 5, 2014 - Presented to Assembly Budget Subcommittee No. 2 on Education Finance
March 4, 2014 - Presented to: Assembly Budget Subcommittee No. 2 on Education Finance
March 4, 2014 - Presented to Assembly Budget Subcommittee No. 2 on Education Finance
March 4, 2014 - In this report, we provide an analysis of the Governor's budget proposals for the state's child care and preschool programs. Specifically, we review the caseload and cost assumptions underlying the Governor's proposal. We find that the Governor likely overestimates caseload and underestimates per-child costs—on net leaving child care funding a few million dollars short of fully covering 2014-15 costs. Once additional data is released in April, the Legislature will be able to develop more accurate caseload and cost estimates for the child care programs in 2014-15.
March 4, 2014 - The Governor's budget proposes $24 billion to pay salary and benefit costs for state workers in 2014-15, up from an estimated $23.5 billion in the current year. The increased costs reflect pay increases for most state workers, rising health and pension benefit costs, and a net increase in the number of state workers. In this report, we provide an overview of the state workforce, current collective bargaining agreements, and state employee compensation costs in 2014-15. We also discuss historical trends of state employee compensation costs and state worker take-home pay. We find that over the last two decades, after adjusting for inflation and state worker cost for health and retirement benefits, state worker take-home pay has remained largely flat while state costs per employee have grown significantly. In addition, assuming the number of state workers does not decline significantly, we expect the state's employee compensation costs to increase for the foreseeable future.
February 28, 2014 - In this report, we provide an analysis of the Governor's proposals to comply with the federal court order to reduce the state's prison population. Specifically, we review the administration's plans to comply with the population cap by (1) contracting for additional prison bed space, (2) utilizing funding from the Recidivism Reduction Fund to support initiatives intended to reduce the prison population (such as expanding rehabilitative services), and (3) implementing court-ordered population reduction measures. We recommend a variety of modifications to the Governor’s proposals. In particular, we recommend using a portion of the monies in the Recidivism Reduction Fund to evaluate the Department of Corrections and Rehabilitation's current rehabilitative programs and to expand an existing grant program that incentivizes counties to reduce prison admissions.
February 27, 2014 - Presented to the Senate Committee on Budget and Fiscal Review, this handout summarizes the key features of ACA 4—the rainy-day fund proposal currently on the November 2014 statewide ballot—and the Governor’s proposal for a different rainy-day fund mechanism. California’s state tax system is highly volatile, and the state has a poor track record of setting aside reserves when times are good to help balance the budget during later economic downturns. Designing a constitutional rainy-day fund mechanism, however, involves many complexities that require detailed consideration by the state’s leaders.
February 26, 2014 - Presented to: Senate Education Committee Senate Budget and Fiscal Review Subcommittee No. 1 on Education
February 26, 2014 - Traditionally, the state has reimbursed local educational agencies (LEAs) for performing mandated activities by requiring them to submit detailed documentation of their costs. In recent years, the state has tried to simplify this process by creating two alternative reimbursement structures. The reasonable reimbursement methodology (RRM) provides reimbursement for a particular mandate using a formula developed in a quasi-judicial forum. The education mandates block grants (one for schools and one for community colleges) provide reimbursement for all active education mandates using a per-student rate established in the budget. Whereas the rarely used RRM process has been very adversarial (once involving litigation) and resulted in long reimbursement delays, nearly all LEAs have chosen to participate in the block grants. Given their overlapping purposes and the comparative advantages of the block grants, we recommend the Legislature repeal the RRM for education mandates.
February 25, 2014 - Presented to: Assembly Budget Subcommittee No. 2 on Education Finance
February 25, 2014 - In 2013-14, the Legislature undertook a major restructuring of school finance but retained the state’s Home-to-School Transportation (HTST) program. Recognizing the need for additional reform, the Legislature asked our office to make recommendations for improving the state’s approach to funding school transportation. The state’s existing approach for allocating HTST funding is widely recognized as outdated and irrational. Given the problems with the state’s existing funding approach, we recommend the Legislature replace it with one of three alternatives. In the report, we describe and assess the trade-offs of the following three options: (1) fund transportation services within the new Local Control Funding Formula; (2) create a new, targeted program to help districts that face extraordinarily high transportation costs; and (3) create a broad-based program whereby the state pays a share of each district’s transportation costs. Any of the three options would be a notable improvement over the state’s current approach.
February 24, 2014 - In order to minimize the negative economic impact of cap-and-trade, it is important that auction revenues be invested in a way that maximizes GHG emission reductions for a given level of spending. In reviewing the Governor's proposed expenditure plan, we find that there is significant uncertainty regarding the degree to which each investment proposed for funding will achieve GHG reductions. This uncertainty is the result of several factors, including there being only limited data and analysis provided by the administration, as well as the fact that the level of emission reductions achieved would depend on the specific projects funded by departments. Given these concerns, we recommend that the Legislature direct ARB to develop metrics for departments to use in order to prospectively evaluate the potential GHG emission benefits of proposed projects, as well as direct the board to establish a set of guidelines for how departments should incorporate these metrics into their decision making processes.
February 21, 2014 - Presented to the California County Superintendents Educational Services Association on February 21, 2014.
February 21, 2014 - In this report, we analyze the Governor's 2014-15 budget for the state's resources and environmental protection programs. We review and make recommendations on a number of major policy proposals, including a review of the administration's recently released Water Action Plan as well as the proposal to reduce or eliminate several programs currently funded by the Beverage Container Recycling Fund (commonly referred to as the "bottle bill"). We find that these policy proposals are generally reasonable approaches, though we identify trade-offs in the proposals and offer recommendations for legislative consideration. The report also identifies several issues included in the Governor's budget that merit additional legislative oversight. This includes the proposal to provide the Department of Parks and Recreation and the Department of Forestry and Fire Protection with a total of $43 million from the General Fund to address deferred maintenance backlogs. While we find that it makes fiscal sense to address deferred maintenance, there is uncertainty about what factors have contributed to the large backlogs, as well as how the state can best address maintenance needs on an ongoing basis.