Legislative Analyst's Office, February 18, 1998

Highlights of the
1998-99 Analysis and P & I


State Fiscal Picture

The Bottom Line

California's Fiscal Outlook Brightest in a Decade
  • The main reasons for this outlook are healthy revenue growth and declining health and welfare caseloads.
LAO's Findings
  • We estimate that revenues will exceed the budget forecast by $1 billion in 1997-98 and 1998-99 combined, and that expenditures will fall below the budget estimate by $200 million.


  • In contrast to recent years, the $1.2 billion in additional resources will be available for non-Proposition 98 purposes.


  • While the overall picture is bright, we note that budgetary pressures will emerge in the following year, due to continued phase in of tax reductions, and an increase in certain state costs. (P&I, page 15.)
LAO Recommendations
  • The Legislature should use some of the new funds we identify to augment the Governor's proposed reserve by at least $300 million.


  • The remaining new funds should be focused on one-time commitments.


  • While ongoing commitments also could be undertaken, the Legislature should be cautious and not over-commit future budgets. (P&I, page 18.)



Economy and Revenues

Continued Economic and Revenue Growth Expected

LAO's Assessment


Program Highlights

K-12 Education

The State Should Develop a K-12 Framework

Legislature Faces Three Key Decisions in Developing Its
1998-99 K-12 Expenditure Plan


Statewide Assessment Is Behind Schedule

Budget Increases Proposition 98 Child Care Support
of CalWORKs Program



Higher Education Projected Enrollment Increases Are Not of "Tidal Wave" Proportions



Higher Education Enrollment Increases Are Not Justified

UC Request for $9.9 Million for the Tenth Campus
Lacks Sufficient Detail


A Market Driven Approach to Training Teachers


Health and Social Services CalWORKs Employment Services Budget Significantly
Exceeds the Amount Needed to Fully Fund the Program


Over $200 Million of Budgeted Medi-Cal Savings Appear Arbitrary

Changes to the New Healthy Families Program
Could Provide Better Coverage and Result in Savings


State Plan Amendment Would Result in General Fund
Savings in the In-Home Supportive Services (IHSS) Program


New Child Support Incentive Payment System Is Needed

State Could Save $300 Million by Eliminating
Overbudgeting and Increasing Federal Funds





Judiciary and Criminal Justice Growth in Prison Population Continues

Legislature Should Reform Adult Parole System

The Federal Government Is Playing an Increasing Role
in California Law Enforcement


New Fees Have Changed How Counties Use Youth Authority

Governance and Accountability Key Issues for Trial Court Funding


Capital Outlay The State Needs a Better Planning
and Financing Process for Capital Outlay


Set Priorities Instead of Allocating Equal Amounts
for Capital Outlay in Higher Education


The Legislature Needs a Better Way to Assess
Seismic Risk in Higher Education Buildings


A Plan Is Needed for Housing Judicially Committed
and Penal Code Patients in State Hospitals


Administration Continues to Plan Huge Increase in Prison System

State Should Not Fund UC San Francisco Mission Bay Campus

Defer Decision on Moving CSU to the Camarillo State Hospital Site

Community College Districts Should Share in Project Costs


Transportation Overall Transportation Funding Outlook Improves Significantly;
But Uncertainties Exist

Mass Transportation Funding Faces Shortfall

Motor Vehicle Account Balance Masks Continuing Problems

Database Redesign Shows No Progress


Resources Cal-EPA Not Meeting Its Goals

Priorities Need to Be Set for Resources Bonds



Governor's Resources Initiatives Lack Detail

State Agencies Lag in Recycling

Pesticides Department Not Responsive to Legislative Direction


General Government Year 2000 Computer Problem Poses Challenge to State

Health and Welfare Agency Data Center
Should Identify Tools It Needs


Department of Food and Agriculture
Food Safety Program Is Not Defined


Implementation of Enhanced Smog Check Program Is Problematic

Foreign Offices Should Be Established Through Separate Legislation

Trade and Commerce Agency Augmentations
for Economic Development



Legislative Analyst's Office

Legislative Analyst

Elizabeth G. Hill 445-4656

Deputy Legislative Analysts

Hadley Johnson, Jr 445-5456
Mac Taylor 445-6511

Business, Labor, and Capital Outlay

Director: Gerald Beavers 322-8402

Criminal Justice and State Administration

Director: Craig Cornett 445-4660

Economics, Taxation, and Fiscal Forecasting

Director: Jon David Vasché 324-4942

Education

Director: Paul Warren 445-8641

Health and Welfare

Director: Chuck Lieberman 445-6061

Local Government

Director: Mac Taylor 445-6511

Transportation and Resources

Director: Dana Curry 445-5921
LAO Background

The Legislative Analyst's Office (LAO) is a nonpartisan office which provides fiscal and policy information and advice to the Legislature.

LAO Publications

To request publications call (916) 445-2375.
This report and others are available on the LAO's World Wide Web site at http:// www.lao.ca.gov.
The LAO is located at 925 L Street, Suite 1000, Sacramento, CA 95814.















 


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