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February 18, 2004 - To reduce budget costs, the administration proposes to issue bonds to finance almost $1 billion in scheduled retirement contributions. A Superior Court has thus far prevented the state from issuing such bonds. Regardless of its legality, incurring decades worth of debt to avoid an annual operating expense is poor fiscal policy. We recommend the Legislature reject the administration’s proposal. The administration also proposes having current employees contribute more of their salaries to retirement. The idea is worth pursuing in collective bargaining, but the Legislature should be aware of what this provision might cost the state in return. For new employees, the administration proposes rolling back retirement benefits to those in place in 1999. We recommend that the Legislature also consider alternatives such as Tier 2 and defined contribution plans for all new employees. These alternatives would result in more state savings and benefits compared to the administration’s proposal.
February 18, 2004 - The California Department of Food and Agriculture's management of 500 permanent positions needs significant revision. We recommend that the Legislature adopt trailer bill language to specify that the department's continuous appropriations do not exempt it from the normal position approval process. We also recommend that the department establish permanent positions with the State Controller's Office and submit budget requests through the Department of Finance and the Legislature for all of its future staffing needs. Finally, we recommend budget bill language requiring the department to report on these permanent blanket positions by December 2004.
February 18, 2004 - The Economic Impact Aid (EIA) program provides funding to school districts to provide compensatory education services to low-performing and English learner (EL) pupils. School districts use funding for a variety of purposes, including: (1) extra assistance to low-achieving pupils, (2) supplemental instructional services to EL students, (3) training to teachers who instruct EL students, and (4) supplementary materials. We find that the EIA funding formula is outdated and results in district allocations that appear arbitrary and unpredictable. We recommend the Legislature simplify the EIA formula so that district allocations are predictable and meet local needs for serving both poor and English learner students.
February 18, 2004 - The Governor's budget proposes to consolidate five of seven existing school safety programs into a School Safety Competitive Grant, leaving two programs outside of the block grant. We recommend the Legislature expand on the Governor's proposal by creating a formula-driven School Safety Block Grant combining all seven school safety programs and 12 school safety-related state reimbursable mandates. We also recommend reversion of $1.6 million in current-year funds for competitive grant programs that the State Department of Education does not plan to administer.
February 18, 2004 - We recommend the Legislature consolidate the ten remaining teacher-related programs into a teacher quality block grant. This would allow the state to retain its focus on teacher quality while simultaneously allowing school districts to pool their existing resources and use them more strategically. To ensure that the greater flexibility provided through a teacher quality block grant is balanced with greater accountability, we also recommend the Legislature develop a comprehensive teacher information system. Specifically, we recommend the Legislature: (1) develop clear teacher quality objectives and associated performance measures, (2) enhance data-collection efforts to ensure performance can be tracked, and (3) provide feedback and assistance to struggling school districts.
February 18, 2004 - The Governor proposes significant new restrictions and reductions for the Cal Grant program. We recommend the Legislature reject these proposals and link grant levels with fee levels. We also offer an alternative way to achieve comparable General Fund savings.
February 18, 2004 - The Governor proposes a variety of fee increases at all three public segments. While we believe most of these increases are reasonable, we recommend slightly smaller increases for several fees. We also recommend establishing a long-term fee policy that links student fees to a fixed percentage of educational costs.
February 18, 2004 - Although the Governor proposes no new funding for enrollment growth at UC and CSU, we find that both universities have unused enrollment funding in their base budgets that would permit them to enroll more students in 2004-05 than in the current year.
February 18, 2004 - Whereas the Governor proposes to eliminate General Fund support for outreach programs at the University of California (UC) and the California State University (CSU), we propose a new College Preparation Block Grant for K-12 schools to contract for outreach services.
February 18, 2004 - The Governor's budget offers a good starting point for addressing the 2004-05 budget problem. Given the structural budget situation the state faces, we believe the Governor's proposed suspension of the Proposition 98 minimum guarantee is appropriate. If suspension is approved, we recommend the Legislature balance K-14 funding priorities with other General Fund priorities without regard to the exact Proposition 98 funding level proposed in the Governor's budget.
February 18, 2004 - The Governor proposes to consolidate $2 billion in funding for 22 existing categorical programs into revenue limits to provide schools and districts with greater funding flexibility. We recommend the Legislature transfer 17 programs into revenue limits, including 14 proposed by the Governor, plus two class size reduction programs and deferred maintenance. We propose redirecting the remaining programs in the Governor’s proposal into a professional development block grant, or a restructured Economic Impact Aid program. We also propose a separate block grant for school safety programs.
February 18, 2004 - The Governor proposes sweeping reductions to the IHSS program in the form of eligibility restrictions, provider wage reductions, and limitations on services. The details of each aspect of the proposal are discussed below. In a subsequent discussion, we comment on the Governor's proposal and present alternatives for legislative consideration.
February 18, 2004 - In order to improve the program's cost effectiveness, we recommend enactment of legislation that (1) sets grant levels at an amount that recognizes the adoptive parents' financial responsibility for their adoptive children, (2) better ties benefit levels to the needs of adoptive children, and (3) narrows the definition of "special needs" so as to focus the program's financial assistance on those children who are likely to benefit the most from such aid. These changes will save approximately $2 million General Fund in 2004-05, growing to approximately $12 million in 2005-06.
February 18, 2004 - As of February 2004, Congress had not completed action on federal welfare reauthorization. We describe the major features of the currently pending House and Senate versions of welfare reform and update our fiscal estimates of these measures.