February 27, 2017 - In this report we provide (1) background on the health care and Long‑Term Services and Supports (LTSS) issues that the Coordinated Care Initiative (CCI) was intended to address, (2) an update on the CCI’s results and challenges to date, (3) an assessment of the Governor’s elimination of the CCI and budget proposal to extend certain CCI components, and (4) options for the Legislature on how to move forward. As ending the In‑Home Supportive Services (IHSS) has major, and rather complex, implications for 1991 realignment, we include a technical appendix at the end of this report that provides an in‑depth analysis of these implications.
October 18, 2017 - Each year, our office publishes the California Spending Plan to summarize the annual state budget. This publication discusses the 2017‑18 Budget Act and other major budget actions approved in 2017. In general, it reflects budgetary actions that the Legislature has taken through September 2017. In some cases, as noted, we discuss budget actions approved by the Legislature after June 15, 2017. In late July, for example, the Legislature passed and the Governor approved, an extension of authority for the Air Resources Board to implement the state’s cap‑and‑trade program from 2020 to 2030.
October 15, 2018 - California has shifted programmatic and funding responsibility between the state and counties for various programs over the last 40 years. Historically, these shifts—or realignments—aimed to benefit both the state and counties by providing greater local flexibility over services, allowing counties opportunities to innovate and improve program outcomes, and encouraging cost savings by requiring counties to share in program costs. To achieve these benefits, we believe there are certain principles any realignment needs to follow. This report evaluates the extent to which one of California’s more notable realignments undertaken in 1991 achieves the intended benefits and meets these principles.
March 8, 2019 - This report evaluates the changes the Governor proposes and assesses whether the changes better position 1991 realignment to achieve its intended benefits and meet the principles of a successful state-county fiscal partnership we identified in our October report.
May 29, 2019 - In this web post, we describe the update to the Governor’s 1991 realignment proposal introduced in January. Additionally, we assess whether the changes included in the Governor’s May Revision align with our realignment principles and address the issues we raised for Legislative consideration in January.
February 22, 2019 - In this report, we evaluate the Governor's major human services budget proposals for programs administered by the Department of Social Services, including the California Work Opportunities and Responsibility to Kids (CalWORKs), the Supplemental Security Income/State Supplementary Payment (SSI/SSP), the In-Home Supportive Services (IHSS), and foster care.
January 13, 2017 - This publication is our office’s initial response to the Governor's 2017-18 budget proposal. The administration's estimates anticipate slow growth in the personal income tax (PIT), the state’s dominant revenue source. The Governor’s estimate of PIT growth in 2017-18 is probably too low. As a result, by the May Revision, the state could have more General Fund revenue than the Governor now projects, but much of that revenue would be required to go to schools and Proposition 2 reserves and debt payments. Facing uncertainties we have long discussed about the economy and new uncertainties about changes to federal policy, the Legislature may want to set a target for total state reserves at—or preferably above—the level the Governor now proposes.
November 18, 2015 - California's state budget is better prepared for an economic downturn than it has been at any point in decades. Under the main economic scenario in this year's LAO Fiscal Outlook, 2016-17 would end with reserves of $11.5 billion, assuming the state makes no new budget commitments through next year. If the economy continues to grow through 2019-20, annual operating surpluses and larger reserves could materialize, and there may be capacity for some new budget commitments—whether spending increases or tax reductions. An economic or stock market downturn, however, could occur during our outlook period. To illustrate this economic uncertainty, we provide projections under alternative scenarios such as a hypothetical recession that causes budget deficits to re-emerge. The more new budget commitments are made in 2016-17, the more likely it is that the state would face difficult choices—such as spending cuts and tax increases—later.
February 24, 2020 - This brief provides information, analysis, and key issues to consider in evaluating the Governor’s 2020-21 budget proposals for the major programs in Department of Social Services.
November 20, 2013 - The 19th annual edition of the LAO's Fiscal Outlook--a forecast of California's state General Fund revenues and expenditures over the next six years--reflects continued improvement in the state's finances. A restrained budget for 2013-14, combined with our updated forecast of increased state revenues, has produced a promising budget situation for 2014-15. Our forecast indicates that, absent any changes to current laws and policies, the state would end 2014-15 with a multibillion-dollar reserve. Continued caution is needed, however, given that these surpluses are dependent on a number of assumptions that may not come to pass. For example, as we discuss in this report, an economic downturn within the next few years could quickly result in a return to operating deficits. In this report, we outline a strategic approach for allocating potential surpluses that prepares for the next economic downturn while paying for past commitments, maintaining existing programs, and making new budgetary commitments incrementally to address other public priorities.
August 19, 2011 - As part of the 2011-12 budget plan, the Legislature enacted a major shift—or “realignment”—of state program responsibilities and revenues to local governments. In total, the realignment plan provides $6.3 billion to local governments to fund various criminal justice, mental health, and social services programs in 2011-12, and ongoing funds for these programs annually thereafter. We recommend the Legislature address a few pressing implementation issues before this legislative session ends. We also identify a series of more extensive issues that we recommend the Legislature address in early 2012, such as developing local funding formulas with an eye towards the long term, promoting local accountability, and simplifying the plan’s extensive network of accounts and subaccounts.
November 14, 2018 - In this web post we discuss our near- and long-term costs projections for the In-Home Supportive Services (IHSS) Program and significant cost drivers and savings.
In addition to this report, you can find the main California's Fiscal Outlook report along with a collection of other fiscal outlook material on our fiscal outlook budget page.