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Budget and Policy Post

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LAO Multiyear State Budget Outlook

May 19, 2017 - This post presents our multiyear outlook for the condition of the state budget through 2020-21 based on current federal and state law and policies, as modified by the Governor’s May Revision proposals. This outlook assumes the passage of the Governor’s proposals, but uses our office’s own estimates of future costs of state programs, along with our own estimates of revenues.


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The 2017-18 Budget: Overview of the Governor's May Revision Medi-Cal Budget Proposal

May 17, 2017 - In this Budget and Policy Post, we provide an overview of several of the key factors driving the changes in estimated and proposed Medi-Cal spending in 2016-17 and 2017-18; our evaluation of the Governor’s updated caseload estimates; and an update on several key proposals from the January budget, some of which have been modified at May Revision. During continuing budget deliberations, we recommend that the Legislature ask for clarity from the Department of Health Care Services on how the Major Risk Medical Insurance Program will be funded in the future under the Governor’s proposal if Health Care Services Plans and Penalties Fund revenues are insufficient to cover the costs of the program. We also recommend that the Legislature, should it approve the Governor’s plan to cancel the planned transition of Newly Qualified Immigrants from Medi-Cal to Covered California, consider trailer bill language that repeals existing state statutory language that calls for the transition. Finally, we recommended a downward technical adjustment of $62 million General Fund to the 2017-18 May Medi-Cal Estimate.


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The 2017-18 Budget: The Governor's May Revision Cannabis-Related Proposals

May 16, 2017 -

In this analysis, we discuss the Governor’s cannabis-related May Revision proposals for seven state departments. Based on our initial review of these proposals, we provide (1) overarching comments and (2) recommendations on each department’s specific proposal.

LAO Bottom Line. The Governor’s May Revision proposes 201 positions and $43.2 million in 2017‑18 from various funds to conduct cannabis regulation-related activities. These resources are provided across seven state departments. Based on our initial review, we recommend making key policy choices regarding how the cannabis industry will be regulated before finalizing budget decisions, as well as limiting the amount of out-year funding provided to departments given the high level of uncertainty regarding future workloads. Accordingly, we also provide recommendations on each department’s specific proposal.


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The 2017-18 Budget: The Governor's May Revision In-Home Supportive Services Cost-Sharing Proposal

May 16, 2017 - Rather than return to the original 1991 realignment cost-sharing ratios for In-Home Supportive Services (IHSS) as initiated by the Governor in January (described in our report: The Coordinated Care Initiative: A Critical Juncture), the administration proposes establishing a new Maintenance of Effort (MOE) for counties’ share of IHSS cost. The new MOE would include both services and administration using 2017-18 costs. The new MOE would significantly increase costs to counties in 2017-18 relative to 2016-17. While the MOE shifts significant costs to counties, the proposal provides state General Fund support and additional realignment revenue to partially offset this increase. In this analysis, we lay out the various components of this complex proposal. We also raise key questions for Legislative consideration and provide our recommendation for how to move forward.


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The 2017-18 Budget: Initial Comments on the Governor’s May Revision

May 13, 2017 - On May 11, 2017 the Governor presented his 2017-18 May Revision budget proposal to the Legislature. We are releasing our assessment of the May Revision in various online products. This post describes the major features of the Governor’s May Revision and our office’s initial comments on it. Other posts in this series discuss our office’s independent assessments of the state’s economy, revenues, and spending proposals in the May Revision.


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Federal Funding for Natural Resources and Environmental Protection

May 10, 2017 - In this post, we provide more detail on federal funding for the state’s natural resources and environmental protection programs, with a focus on the five state departments that receive the most federal funds last year.


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Update on COLA for K-14 Education Programs

April 28, 2017 - On April 28, 2017, the federal Bureau of Economic Analysis released updated information that affects the cost-of-living adjustment for certain school and community college programs. In this post, we describe the new information and its implications for school funding.


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The 2017-18 Budget: Secretary of State Spring Finance Letter

April 25, 2017 - In a Spring Finance Letter, the Governor proposes using remaining funds from a 2009 settlement agreement to provide the Secretary of State a three-year funding increase of $463,000 per year and three positions to support the agency’s activities related to the implementation of SB 450. We recommend that the Legislature (1) use this proposal and the implementation of SB 450 to reconsider the state’s role in paying for elections administration and (2) consider the appropriate level, duration, and source of funding to support the Secretary of State’s SB 450 activities.


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Lessons From Other States to Address California’s Redemption Center Closures

April 10, 2017 - Since January 1, 2016, over 300 “convenience zone” (CZ) recycling centers—those generally located within a half mile of supermarkets—have closed. CZ recycling centers are an important part of California’s Beverage Container Recycling Program (BCRP). They provide a convenient location for consumers to recycle beverage containers and have their deposit—the California Redemption Value, or “CRV”—repaid. This post examines the closures by reviewing programs in other states and identifying options to improve convenient recycling options in California.


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Department of Toxic Substances Control: Performance Improvement Initiatives Merit Oversight

April 4, 2017 - In light of concerns about the Department of Toxic Substances Control’s execution of its responsibilities in recent years, the Legislature has held numerous hearings to monitor the performance of the department’s programs. The Legislature has also approved additional funding and positions for the department to address deficiencies in some of these programs. In this web post, we discuss the department’s progress to date in addressing these deficiencies, as well as provide questions for legislators to ask the department in future budget and policy hearings to determine the degree to which the department is improving program performance.


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The 2017-18 Budget: Update on Per Capita Personal Income

March 30, 2017 - On March 28, 2017, the federal Bureau of Economic Analysis released updated data on personal income. In this post, we describe the new data and the implications for school funding.


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The 2017-18 Budget: Update on K-12 Student Attendance

March 30, 2017 - In early March of 2017, the California Department of Education certified initial average daily attendance data for 2016-17. In this post, we describe how the state tracks attendance and discuss the implications for Proposition 98 and school funding.


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2017-18 Budget: Control Section 4.11—Position Transparency

March 24, 2017 - We recommend that the Legislature amend the proposed budget bill language for Control Section 4.11 to improve transparency and legislative oversight over the state’s workforce.


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A History of California’s Budget Reserves

March 24, 2017 - This post provides an overview and history of the state’s budget reserves. It also includes an interactive graphic comparing actual reserves to enacted reserves over time.


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The 2017-18 Budget: Local Update of Census Address Program Overview

March 23, 2017 - The Governor proposes $7 million in incentive grants for local governments to participate in the Census Bureau's Local Update Address Program in preparation for the 2020 Census. This post describes the upcoming U.S. Census and considerations for the Legislature in ensuring an accurate count.