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Elimination of Energy-Related Agencies

February 24, 2005 - The Governor’s Reorganization Plan Number One (GRP 1), related to reforming boards and commissions, proposes eliminating two energy-related agencies—the California Consumer Power and Conservation Financing Authority and the Electricity Oversight Board—and moving their duties to the Energy Resources Conservation and Development Commission. We find that this proposal raises various issues, including potential conflicts of interest in the resulting organization and whether the reorganization is premature pending potential future changes in the energy market and a potential proposal to establish an energy agency.

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Resources Bonds: Getting Funds Out-the-Door

February 24, 2005 - We find that there are significant amounts of resources bond funds that were appropriated in the current and prior years that have not been expended. We also find that delays persist in getting funds out-the door and that there has been a lack of demand for the specified use of some bond funds. We recommend that the administration report at budget hearings on various bond program implementation issues.

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Reorganizing the State’s Recycling Programs

February 24, 2005 - In order to increase the effectiveness and efficiency of the state’s recycling programs, we recommend that such programs be consolidated into a new department within the California Environmental Protection Agency. We also recommend that the nonrecyling-related functions in the current agencies be transferred to other departments. This reorganization would generate special fund savings of at least $2 million.

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Financing Flood Lawsuit Settlement

February 24, 2005 - The budget proposes to finance a pending $464 million settlement of a flood-related lawsuit against the state (the Paterno case) with a judgment bond. We think that there may be other ways to pay this settlement. We also find that the judgment bond proposal raises legal, policy, and fiscal issues for the Legislature to consider. We recommend that the Director of Finance report on various issues at budget hearings.

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Analysis of the 2005-06 Budget Bill, Resources Chapter

February 24, 2005 - Analysis of the 2005-06 Budget Bill, Resources Chapter

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Water Policy Issues Facing the State

February 22, 2005 - Two of the most important water policy issues facing the state today are how to address what has been characterized by the administration as a “crisis” in flood management and how to finance the $8.1 billion CALFED Bay-Delta Program (CALFED). We analyze a Department of Water Resources White Paper recently submitted to the Legislature on addressing the state’s flood management challenges and make recommendations for legislative action. We also analyze a ten-year finance plan for CALFED that the budget indicates will be incorporated in the Governor’s May Revision. We find that the finance plan’s revenue assumptions may be unrealistic. As a result, the Legislature will need to establish its expenditure priorities so that the program can be “right sized” consistent with those priorities.

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Improving Coastal Access And Development Mitigation

January 19, 2005 - The Legislature has made protection of and access to California's 1,100 miles of coastline a statewide priority. While the California Coastal Commission has made progress toward protecting California's coastline, certain of the commission's permitting practices have temporarily reduced, and may permanently reduce, the public's access to the coast. The Coastal Commission's mitigation strategies include owners offering to dedicate (OTD) portions of their property to public use as a condition of receiving a coastal development permit. We make a number of recommendations focused on encouraging more upfront mitigation of coastal development, finding a more appropriate funding source for mitigation, and shortening the timeframes for acceptance and opening of OTDs.

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Proposition 50 Resources Bond: Funding Eligibility of Private Water Companies

May 14, 2004 - The implementation of the Proposition 50 resources bond has raised the issue of whether private water companies should be eligible for these funds. We identify several legal, tax, and policy issues for legislative consideration in evaluating this issue. We recommend that the Legislature declare its policy position on this matter. Our review concludes that the broad public purpose of Proposition 50 bond funds would be served by including private entities as eligible recipients of such funds.

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California Teleconnect Fund: An Assessment

February 18, 2004 - The Governor's budget proposes a significant reduction in expenditures for the California Teleconnect Fund (CTF) program, which provides discounts on telephone service and other advanced telecommunication services that provide access to the Internet (such as digital subscriber line [commonly referred to as DSL] services) to schools, libraries, and qualifying hospitals and community-based organizations. While we have concerns regarding the operation of the current program, we find this underfunding to be contrary to legislative direction. To address this, we recommend the California Public Utilities Commission report at budget hearings on the projected funding requirements of the program in the budget year. Furthermore, if the CTF program requires additional funding in 2004-05, we identify options for the Legislature to consider to provide additional funding for the program.

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State Park Services: Potential for Increased Private Sector Partnership

February 18, 2004 - We find other park jurisdictions contract with the private sector for the delivery of types of services not contracted out by the Department of Parks and Recreation. We recommend a pilot program to further explore the pros and cons, as well as the costs and benefits, of expanding these public-private partnering activities in state parks.

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Governor’s Resources Bond Expenditure Proposal

February 18, 2004 - The Governor has deferred the submittal of most of his resources bond expenditure proposals to later in the spring, leaving major gaps in programs traditionally funded from bond funds. We provide a framework to assist the Legislature in evaluating the forthcoming bond proposals; this includes ensuring that the Governor’s proposals reflect legislative priorities for bond funding.

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California Power Authority: Where Now?

February 18, 2004 - The budget proposes eliminating the California Consumer Power and Conservation Financing Authority (CPA). Although CPA has been unable to fulfill its core mission to finance new power plants, this has largely been due to market conditions. Given significant uncertainties regarding the adequacy of the state’s energy supply to meet future demand, we think retaining some of CPA’s functions (either within or outside CPA) has merit

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Timber Harvest Fee Proposal Should Go Further

February 18, 2004 - The budget proposes to impose a new fee on timber owners to partially cover the costs incurred by the California Department of Forestry and Fire Protection (CDFFP) in its review and enforcement of timber harvest plans (THPs) beginning in the current year. While this is a step in the right direction, we recommend the enactment of fee legislation that would go further by fully funding the costs of CDFFP and all other state agencies with THP review responsibilities.

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State’s Approach to Flood Management Should Be More Strategic

February 18, 2004 - Development in and around floodplains has contributed to increased losses due to floods, but the state’s efforts to improve floodplain management have been reduced significantly in recent years. We recommend reducing the state’s share of funding for certain flood control projects to better reflect the local benefit from these projects. This would create future savings that could be used to make more strategic flood management investments and benefit the General Fund.

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CALFED Bay-Delta Program: At A Funding Crossroads

February 18, 2004 - The CALFED Bay-Delta Program—with a projected $6 billion funding gap—is at a funding crossroads. To date, the state has been the biggest funding contributor by far to the program, with federal and local governments and water users lagging in their support. We recommend a funding framework for CALFED that applies the beneficiary pays principle, including a fee on water users that take water from the Bay-Delta system.