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 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.
October 17, 2019 - From the General Fund, the 2019-20 spending plan provides $26.4 billion for health programs and $15.5 billion for human services programs—an increase of 18 percent and 12.6 percent, respectively, over estimated 2018-19 General Fund spending in these two policy areas. Major health-related policy actions include the reauthorization of a tax on managed care organizations (which will reduce the above-noted General Fund health spending by $1 billion, pending federal approval) and over $400 million General Fund for state-funded subsidies for health insurance purchased on the individual market through Covered California. Major human services-related policy actions include General Fund support to increase CalWORKS cash grants and most developmental services provider rates, and to restore previously reduced service hours in the In-Home Supportive Services program. The spending plan also reflects the deposit of $700 million into a safety net reserve (bringing its balance to $900 million) that can be used for future CalWORKs and/or Medi-Cal expenditures.
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.
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.
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.
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.
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.
November 4, 2013 - The LAO’s annual California Spending Plan publication details the 2013-14 budget package, including legislative and gubernatorial actions through October 2013. (Our office released a preliminary electronic version of the report on July 30, 2013 that summarized legislative and gubernatorial actions through that date.) Major features of the 2013-14 budget plan include $2.1 billion for a new formula to distribute funding amongst schools, a state-based plan to expand Medi-Cal to cover more than one million additional low-income adults, and selected program augmentations.
February 1, 1992 - The state and local program realignment legislation enacted in 1991 represents a fundamental change in the state and county fiscal relationship. In this piece, we (1) provide background on the evolution of the legislation, (2) review its primary components, (3) assess its likely programmatic and fiscal effects, and (4) identify realignment-related implementation and policy issues we believe the Legislature will face in the current legislative session and in later years. Finally, we identify program areas where we believe the Legislature might effectively extend some of the legislation's features to enact further reforms.
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.
September 1, 1991 - This report summarizes the fiscal effect of the 1991 Budget Act (Ch 118/91-AB 222, Vasconcellos) including the effects of major legislation accompanying the budget which were enacted as part of the overall state spending plan for 1991-92.
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.
February 19, 2013 - Under the Patient Protection and Affordable Care Act, also known as federal health care reform, the state has the option to expand its Medicaid program (known as Medi-Cal) to cover over one million low-income adults who are currently ineligible. Currently counties have the fiscal and programmatic responsibility for the care of the low-income adult population that would be covered by the expansion. The Governor has proposed to adopt the optional expansion, but has outlined two distinct approaches to implementing the expansion—a state-based approach and a county-based approach—and has not indicated a preference for either approach. Under both approaches, the Governor indicates that the expansion will require a reassessment of the state-local fiscal relationship. We find that the expansion would have significant policy benefits, including improved health outcomes for the newly eligible Medi-Cal population. We estimate that fiscal savings to the state as a whole are likely to outweigh the cost of the expansion for at least a decade, although these estimates are subject to significant uncertainty. Despite the significant uncertainty about long-term costs and savings, on balance, we believe the policy merits of the expansion and fiscal benefits to the state as a whole likely will outweigh the costs and potential fiscal risks. We therefore recommend the state adopt the expansion. We also find that the state is in a better position to effectively deliver health services to the newly eligible population. Therefore, we recommend the Legislature adopt a state-based expansion, shifting the fiscal and programmatic responsibility of providing physical health care to the expansion population from counties to the state. Given this shift of responsibility, we further recommend the Legislature redirect a portion of funding currently allocated to counties under 1991 realignment for indigent health 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.