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The 2017-18 Budget: Overview of the Governor’s Transportation Budget

January 18, 2017 - The Governor’s budget for 2017-18 proposes a total of about $20 billion in expenditures for the state’s various transportation departments and programs. In this web post we provide an overview of the proposed transportation budget.


Federal Spending in California

January 18, 2017 - These online posts estimate and explore federal expenditures in California, which we define as the amount of federal spending that we can directly attribute to recipients in California. In this set of posts, we display total federal expenditures by major program, recipient, and county. We also compare federal expenditures in California to other states.


The 2017-18 Budget: Overview of the Governor’s Proposition 98 Budget Package

January 13, 2017 - On January 10, 2017, the Governor presented his Proposition 98 budget package to the Legislature. In this post, we provide an overview and initial assessment of the package.


Ten Years Later: Progress Towards Expending the 2006 Bond Funds

January 3, 2017 - In November 2006, voters approved over $42 billion in bonds. In this web post, we summarize a variety of the reasons why some of these bonds remain unspent ten years later. We also identify some lessons for crafting future bonds.


Key Differences Between Recent Medical Cannabis Laws and Proposition 64: A Preliminary Review

December 20, 2016 - The Medical Cannabis Regulation and Safety Act (MCRSA) provides a statutory framework for regulating medical cannabis and Proposition 64 of 2016 provides a statutory framework for regulating nonmedical cannabis. In this web post, we provide a preliminary review of the key differences between MCRSA and Proposition 64. We also describe some overarching issues for Legislative consideration.

(Updated 1/9/17)


Statewide Minimum Wage Increasing in January

December 6, 2016 - A new law passed in 2016 (SB 3 [Leno]) will increase California’s statewide minimum wage over a period of several years. The first increase will occur on January 1, 2017. This budget and policy post is a supplement to our series on the California Economy and Taxes blog, where we describe California's low-wage workers and highlight the parts of the state with local minimum wages higher than the statewide minimum wage in 2017.

(Updated 12/21/2016 to include Los Altos.)


Hydraulic Fracturing: How It Works and Recent State Oversight Actions

December 1, 2016 - In 2014, the Legislature passed new laws intended to improve state oversight of hydraulic fracturing, or “fracking.” In this web post, we provide a progress report on the implementation of these new laws and a high-level overview of how hydraulic fracturing is used to stimulate oil and natural gas production.


Fiscal Outlook Supplement on Proposition 2

November 16, 2016 - On November 16th our office released its annual Fiscal Outlook. The outlook provides our assessment of California’s budget condition through 2020-21. This post provides more details on the outlook’s estimates of constitutionally required debt payments and reserve deposits under Proposition 2.


New Federal Toxics Law Could Have Future Implications for State

October 5, 2016 - On June 22, 2016, the President signed the Frank R. Lautenberg Chemical Safety for the 21st Century Act. The new law implements significant reforms to the federal Toxic Substances Control Act. Under the new law, U.S. EPA will have greater authority to evaluate and regulate existing chemicals, as well as new chemicals proposed to be brought to the market. In addition to providing EPA with more authority to enforce restrictions on chemicals, the new law places greater limits on the authority of states to enforce their own laws and regulations restricting the use of chemicals. In the long-run, it is quite possible that the new federal law—and specifically the preemption provisions—could significantly affect California’s chemical safety programs and the implementation of current and future state restrictions.


Revisiting the Unemployment Insurance Trust Fund Insolvency

September 30, 2016 - Due to a variety of factors, the state's Unemployment Insurance (UI) trust fund exhausted its reserves in 2009, requiring the state to take on loans to continue the payment of benefits to unemployed workers. In this series of four online posts, we (1) examine the current condition of the UI trust fund and how it may change in the near future, (2) provide context on who pays UI taxes and how much they pay, (3) assess the extent to which the UI trust fund is prepared for the next economic downturn, and (4) look at potential steps the Legislature could take should it wish to increase reserves in the trust fund as a means to address the fiscal impacts of the next economic downturn.

Update 6/13/17:
Post 1 updated to reflect estimates in the 2017-18 May Revision.

Update 1/20/17:
Post 1 updated to reflect estimates in the 2017-18 Governor's Budget.


Road Charge Pilot Program Update

September 15, 2016 - In 2014, legislation was enacted that requires the California State Transportation Agency to conduct a road charge pilot program to study the feasibility of charging individuals for each mile they drive as an alternative to fuel taxes. The road charge pilot program officially began in July 2016 and will continue through March 2017. In this post, we provide an update on the pilot program.


How Did California Schools Spend Common Core Implementation Funding?

June 10, 2016 - The 2013-14 state budget package included $1.25 billion in Proposition 98 funding for schools to implement the new Common Core State Standards in English and math. State law allowed schools to use the funds in three areas associated with Common Core implementation: (1) information technology, (2) staff development, and (3) instructional materials. State law required the California Department of Education to report expenditure data to the Legislature by January 1, 2016. In this post, we summarize schools’ expenditures based on that report.


Sheriff Court-Security Services Mandate

May 27, 2016 - State law tasks the Commission on State Mandates with determining whether new state laws or regulations affecting local governments create state-reimbursable mandates. Typically, the process for determining whether a law or regulation is a state-reimbursable mandate takes several years. State law further requires our office to analyze any new mandates identified by the commission as part of our annual analysis of the proposed state budget. In particular, state law directs our office to report on the annual state costs for new mandates and make recommendations to the Legislature as to whether the new mandates should be repealed, funded, suspended, or modified. In this budget post, we discuss the Sheriff Court-Security Services mandate.


LAO Multiyear State Budget Outlook

May 20, 2016 - This online post is our office’s multiyear outlook for California’s General Fund through 2019-20 based on current state law and policies, as modified by the Governor’s May Revision proposals. This is part of our response to the Governor’s 2016-17 May Revision. Our outlook estimates the state will end 2016-17 with $8.7 billion in total reserves. Over our outlook period, and assuming continued economic growth, we estimate the state’s budget has the capacity to pay for the Governor’s May Revision proposals over the period. After 2016-17, the state would have a few billion dollars available each year to build reserves or make additional commitments. Despite these budgetary surpluses, compared to other recent similar analyses, our outlook shows much smaller budget surpluses. Surpluses have declined largely as a result of new spending commitments by the state, including the increased state minimum wage. As a result, the state’s budget is now more vulnerable to a future economic downturn than it was last year. For this reason, we suggest the Legislature aim to pass a state budget with a robust level of total reserves this year.


Considering Changes to Streamline Local Housing Approvals

May 17, 2016 - The Governor’s May Revision proposes changes to state law to streamline local government approval of certain housing. This proposal has the potential to be an important step toward addressing California’s housing shortage. We believe it warrants serious consideration from the Legislature. We also suggest the Legislature consider expanding eligibility for streamlining to facilitate more new housing, as well as making other changes to strengthen the proposal’s effectiveness.