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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.
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.
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.
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.
February 24, 2005 - Some school districts face huge fiscal liabilities to pay for retiree health benefits. It will be difficult for districts to deal with these obligations without a long-term strategy. We recommend the Legislature take various actions to start addressing this problem. Around 40 percent of school districts face declining enrollment. The state continues to have inequities in revenue limit (general purpose) funding across school districts. We recommend an approach to address both of the problems, allowing declining enrollment districts to increase their per pupil revenue limit until they reach the equalization target.
February 24, 2005 - The 2005-06 budget proposes $20 million in support of a broad-based reform of vocational education in K-12 education. We believe the Governor's proposal addresses a significant problem, but lacks the level of detail necessary for the Legislature to fully evaluate it. We therefore recommend the Legislature direct the Department of Finance to provide to the budget subcommittees prior to budget hearings (1) the details of the proposed plan and (2) responses to our initial concerns about the proposal.
February 24, 2005 - The budget proposes to leave 2004-05 Proposition 98 appropriations at roughly the level provided in the 2004-05 Budget Act. This proposal would create $2.3 billion in General Fund savings over the two years. While the Governor’s 2005-06 spending plan for K-14 grows by $2.9 billion, it does not include funding to cover all K-14 operating expenses that districts would incur under the budget proposal. We recommend the Legislature build a base budget for 2005-06 that fully funds the current K-14 education program.
February 24, 2005 - To the extent that the Legislature chooses to assess a fee to cover the state’s share of costs of the Medfly Preventative Release Program, we offer a number of considerations concerning a fee structure.
February 24, 2005 - The budget proposes an augmentation of $4.8 million and 46 two-year limited-term positions for increased regulatory activities related to tribal gambling. The request would double the size of the California Gambling Control Commission. The request fails to (1) clearly articulate what problems are being addressed, (2) justify a new state gaming lab, and (3) reflect a joint strategy with the Department of Justice. We recommend that the Legislature reject the request and the administration resubmit a proposal which addresses these problems.
February 24, 2005 - The Governor proposes shifting $469 million in General Fund teacher retirement costs to school districts and/or schools. Due to current law requirements, it is likely that the proposal would require a $469 million upward “rebenching” of Proposition 98’s minimum guarantee—nullifying the proposed General Fund savings. In addition, from a long-term perspective, the proposal on its own would not address the retirement system’s shortcomings—the lack of local control and responsibility.
February 24, 2005 - The Governor proposes to lower the grants for all working CalWORKs recipients, by reducing the amount of earned income which is disregarded (not counted) when determining a family’s grant. This proposal results in savings of $80 million and is likely to have minimal impact on the work incentive. We present alternative approaches which are likely to increase the work incentive but result in less budgetary savings.
February 24, 2005 - In 2000, a legislatively mandated study found that it was difficult for social workers to provide services or maintain meaningful contact with children and their families because of the excessive numbers of cases they were expected to carry. Our analysis indicates California now meets or is approaching the three of the five workload standards in child welfare services.