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The 2019-20 May Revision: Analysis of the Governor’s January and May Mental Health Workforce Proposals

May 16, 2019 - In January, the Governor proposed a $50 million one-time General Fund augmentation for existing mental health workforce programs that are administered by OSHPD. In the May Revision, the Governor proposes an additional $100 million in MHSA funding for mental health workforce. This post (1) provides background on the state’s mental health workforce, (2) gives an overview of existing programs and funding aimed at improving the state’s mental health workforce, (3) summarizes and assesses the Governor’s proposals, and (4) provides options for legislative consideration.

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The 2019-20 May Revision: Analysis of the May Revision Education Proposals

May 15, 2019 - The May Revision contains more than 100 proposed changes to education programs. The changes range from large new policy proposals, to major modifications of January proposals, to small adjustments relating to revised student attendance estimates. In this post, we focus on the first two categories of proposals. The post has six sections. The first section provides an overview of the proposals. The next four sections cover specific proposals relating to (1) early education, (2) K-14 education, (3) the universities, and (4) financial aid. The last section covers library-related proposals and a crosscutting proposal relating to education innovation.

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Governor’s May Revision Update: Health Insurance Affordability Proposals

May 15, 2019 - With the May Revision (and prior to the May Revision with the release of proposed implementing legislation), the administration has provided additional details on its January proposal to impose a state individual mandate and use penalty revenues from the mandate to fund health insurance subsidies. In this post, we summarize key updates to the Governor’s proposals and raise some issues for the Legislature’s consideration.

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The 2019-20 May Revision: Governor's May Revision Medi-Cal Budget

May 14, 2019 - The Governor’s May Revision includes Medi-Cal spending of $19.7 billion from the General Fund ($93.4 billion total funds) in 2018-19 and $23 billion from the General Fund ($102.2 billion total funds) in 2019-20. As will be described in this post, about half of the reduction in estimated spending in 2018-19 reflects a shift of costs in Medi-Cal to a different budget item, rather than a true reduction in estimated program costs. After accounting for this shift, the May Revision is about $350 million below January estimates across 2018-19 and 2019-20.

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The 2019-20 May Revision: Considerations for the Revised Housing and Homelessness Plan

May 13, 2019 - Housing in California has long been more expensive than most of the rest of the country. In this post we assess the Governor’s 2019-20 May Revision proposals for housing and homelessness.

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The 2019-20 May Revision: Sales Tax Exemptions for Diapers and Menstrual Products

May 12, 2019 - In the May Revision, the Governor has proposed two new sales tax exemptions that would go into effect on January 1, 2020 and expire on December 31, 2021: one for menstrual products and another for children’s diapers. These exemptions would apply to the full amount of the state and local sales tax. The Governor’s proposal would require our office to submit reports evaluating these exemptions by January 1, 2021.

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The 2019-20 May Revision: Initial Comments on the Governor’s May Revision

May 12, 2019 - The Governor’s revised budget package provides updates on the administration’s estimates of revenues (in part based on collections in April, the state’s most important revenue collection month). The Governor’s May Revision also revises some January budgetary proposals and introduces some new proposals. In this post, we provide a summary of the Governor’s revised budget, primarily focusing on the state’s General Fund—the budget’s main operating account.

Correction (5/14/19): Corrected sunset dates on certain Health and Human Services proposals.

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The 2019-20 May Revision: LAO Revenue Outlook

May 12, 2019 - This post details our General Fund revenue outlook for 2017‑18 through 2022‑23. Our estimates of General Fund revenues and transfers for the “budget window”—2017‑18 through 2019‑20—are $774 million (0.2 percent) above the administration’s May 2019 revenue forecast.

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The 2019-20 May Revision: LAO Economic Outlook

May 12, 2019 - Our office just released a summary of our updated state fiscal outlook for the May Revision. Our fiscal outlook is premised on a set of economic assumptions. While our November fiscal outlook included multiple economic scenarios, this update for May focuses on only one economic scenario: continuation of moderate economic growth.

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The 2019-20 May Revision: Opportunity Zones

May 11, 2019 - The Governor proposes to allow state tax benefits for investments in alternative energy or affordable housing in communities designated as Opportunity Zones under a new federal program. Given the mixed evidence regarding the benefits of similar policies and the existence of better mechanisms to fund affordable housing, we recommend rejecting the Governor’s proposal to create a state Opportunity Zone tax benefit.

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The 2019-20 Budget: Immigrant Legal Services at the Public Higher Education Segments

May 8, 2019 - In this post, we (1) provide background on immigrant residents in California and state funding for immigrant legal services, including for students and employees at the California Community Colleges (CCC), California State University (CSU), and University of California (UC); (2) describe the Governor’s proposals to provide funding for legal services at the three higher education segments; (3) provide an update on implementation of legal service programs at each segment; and (4) make recommendations on the Governor’s budget proposals.

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The 2019-20 Budget: Analysis of Governor’s Preschool Slot Estimate

May 6, 2019 - In this post, we compare the administration's estimate with our independent estimate, then discuss the key assumptions underlying each of the estimates.

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The 2019-20 Budget: Special Education Teaching Performance Assessment

April 30, 2019 - In this web post, we analyze the Governor’s 2019-20 proposal to provide $1.2 million for the Commission on Teacher Credentialing (CTC) to develop and implement a performance assessment for prospective special education teachers. We provide background, describe the Governor’s proposals, assess the proposal, and offer associated recommendations. We recommend the Legislature adopt the proposal but direct CTC to collect additional data to determine how the new assessment may affect interest, workload, and completion rates for special education teacher preparation programs.

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The 2019-20 Budget: California Student Aid Commission's Grant Delivery System Modernization Project

April 24, 2019 - In this post, we analyze the Governor’s proposal to provide $6.2 million for the California Student Aid Commission (CSAC) to continue its Grant Delivery System Modernization project. Below, we (1) provide background on the project and the state’s information technology (IT) oversight process, (2) describe the Governor’s proposal to fund the second year of the project, (3) assess that proposal, and (4) make an associated recommendation.

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The 2019-20 Budget: Undoing California’s Outstanding Budgetary Deferrals

March 26, 2019 - When facing budget problems in the past, the state has “deferred” payments from one fiscal year into the next, providing significant one-time budgetary savings. While the state has already addressed many of its outstanding deferrals, there are still three major categories of deferrals remaining. These are related to: (1) state employee payroll, (2) pension payments, and (3) Medi-Cal payments. The Governor proposes using $1.7 billion to undo the payroll and pension deferrals. We find this would improve the state’s fiscal position and moderately improve the state’s budgetary practices, however, this approach has shortcomings relative to alternatives. This post recommends an alternative approach to the Governor’s proposal.