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Budget/Policy Analysis

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Analysis of the 2006-07 Budget Bill, Transportation Chapter

February 23, 2006 - Analysis of the 2006-07 Budget Bill, Transportation Chapter


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Analysis of the 2006-07 Budget Bill, Capital Outlay Chapter

February 23, 2006 - Analysis of the 2006-07 Budget Bill, Capital Outlay Chapter


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Analysis of the 2006-07 Budget Bill, Education Chapter

February 23, 2006 - Analysis of the 2006-07 Budget Bill, Education Chapter


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UC and CSU Enrollment Growth And Funding

February 23, 2006 - The Governor’s budget proposes $110 million to fund 2.5 percent enrollment growth at the University of California (UC) and the California State University (CSU). This amount would provide $10,103 in General Fund support for each additional student at UC and $6,792 for each additional student at CSU. (The proposed budget also provides $149 million for a 3 percent enrollment increase at the California Community Colleges.) In this write-up, we (1) review recent enrollment trends at UC and CSU, (2) analyze the Governor’s proposed enrollment growth and funding rates for 2006-07, and (3) recommend alternatives to those rates.


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Higher Education Student Fees

February 23, 2006 - For 2006-07, we recommend the Legislature at least maintain nonneedy students’ share of cost at the current-year level. Holding this share constant would entail modest fee increases of 3.5 percent at the University of California (UC), 3.0 percent at the California State University (CSU), and 7.0 percent at the California Community College (CCC). For a full-time undergraduate, this equates to an annual increase of $215 at UC, $76 at CSU, and $55 at CCC. These increases would generate $84 million in net new fee revenue. (Of this fee revenue, $35 million is generated at UC, and $1 million at Hastings, $24 million at CSU, and $24 million at CCC.) We also recommend the Legislature reject the Governor’s “fee buyout” proposal because it distorts budgeting and creates the wrong incentives. Rather than provide a fee buyout, we recommend the Legislature provide the segments sufficient funding to meet identified needs.


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Year-Round Operations at UC and CSU

February 23, 2006 - Operating University of California (UC) and California State University (CSU) campuses on a year-round schedule-which more fully utilizes the summer term-is an efficient strategy for serving additional students with existing facilities. In this write-up, we (1) review actions the state has taken to promote summer expansion, (2) provide an update on UC’s and CSU’s efforts to expand summer operations, and (3) identify issues for the Legislature to consider in regard to further summer expansion.


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Community Colleges Per-Student Funding Equalization

February 23, 2006 - The Governor’s 2006-07 budget proposal includes $130 million to equalize per-student funding among community college districts. To the extent the Legislature wishes to fund priorities beyond workload increases, we recommend that the Legislature approve an augmentation sufficient to finish funding equalization to the 90th percentile, as called for in statute. However, we recommend the Legislature fund equalization contingent upon enactment of legislation providing an allocation method that preserves its equalization investment.


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Restructuring How the State Administers Higher Education Grant and Loan Financial Aid Programs

February 23, 2006 - We recommend the Legislature enact legislation that would restructure how the state administers grant and loan programs. Specifically, we recommend the Legislature authorize a single agency, with a single board and Executive Director, to administer both state grant and federal loan programs. We recommend the agency be structured as a nonprofit public benefit corporation but subject to stronger accountability requirements.


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Proposition 99: Too Many Programs, Too Few Dollars

February 24, 2005 - We recommend the Legislature approve the Governor’s budget proposal for Proposition 99-funded programs, which shifts allocations of tobacco tax revenues to maximize resources for health programs and achieve General Fund savings. We further recommend that the Legislature begin this year to address the long-term issues posed by the present structure of Proposition 99.


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Towards a More Systematic Rate-Setting Model for Regional Centers

February 24, 2005 - Our analysis finds that the way the state sets rates for vendors who provide community services for the developmentally disabled on the whole lacks a rational and consistent approach. We review how rates are set for these services and offer an improved and systematic approach that could achieve significant state savings.


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Hospital Financing Plan Could Begin to Right Ailing System

February 24, 2005 - The state’s hospital system continues to face a variety of fiscal challenges that weigh particularly heavily on public hospitals. The administration is negotiating with the federal government for a comprehensive redesign of hospital financing as part of its Medi-Cal redesign package. Our review of the plan now under development suggests that it could help preserve the financial stability of public hospitals but also raises some significant fiscal and policy issues.


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Medi-Cal Redesign Sound in Principle But Needs Further Development

February 24, 2005 - The seven-part administration redesign proposal would result in broad changes in Medi-Cal managed care as well as some more limited changes in benefits, cost-sharing, and eligibility administration. Overall, we find that the Governor’s proposals are conceptually sound but that the Legislature needs more information about some aspects of the package and that some refinements are warranted.


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Child Care Reforms Merit Serious Consideration

February 24, 2005 - The Governor proposes a number of significant reforms to California’s subsidized child care system including eligibility restrictions, a new waiting list system, and tiered reimbursement rates. With certain qualifications, we support proposed eligibility and waiting list changes. Although tying reimbursement rates to quality makes sense, the Legislature may wish to consider alternative approaches which increase reimbursement rates for higher quality care rather than simply reducing reimbursement rates (as the Governor proposes) for lower quality care.


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Proposition 49—Recommend Repeal

February 24, 2005 - We recommend the Legislature enact legislation placing before the voters a repeal of Proposition 49 because (1) it triggers an autopilot augmentation even though the state is facing a structural budget gap of billions of dollars, (2) the additional spending on after school programs is a lower budget priority than protecting districts’ base education program, and (3) existing state and federal after school funds are going unused.


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Charter Schools

February 24, 2005 - Ever since it was first implemented in 1999-00, we have had concerns with the calculation of the charter school categorical block grant funding level. We recommend the Legislature pursue a reform strategy based upon a new control section in the annual budget act that would provide charter schools a share of categorical funding that is equivalent to the proportion of K-12 students they serve. This alternative approach would be simple, workable, and consistent with the original intent of the block grant.