Funding for capital outlay totals about $1.2 billion. The budget proposes a 39 percent increase in pay-as-you-go funding and does not include any debt financing using lease-payment bonds.
The 2000-01 Governor's Budget proposes $1.2 billion for capital outlay programs (excluding highway and rail programs, which are discussed in the Transportation section of this Analysis). This is spending on physical assets--college buildings, state parks, and prisons. (Spending to pay off debt on those assets financed with bonds is discussed later in this section.) The proposed amount is a decrease of $367 million (24 percent) from current-year appropriations. Most of this decrease is in the area of prisons, where construction of a new prison in Delano, Kern County, was funded in the current year. No new prisons are proposed in the 2000-01 Governor's Budget.
Figure 1 (see next page) compares the amounts appropriated for capital outlay in the current year to the amounts proposed in the budget for each general organizational area. As shown in the figure, the largest decrease is in the area of youth and adult corrections ($342 million) and the largest increase is in higher education ($83 million).
Figure 2 (see next page) shows the amounts each department requested for capital outlay funding in 2000-01, the amounts included in the Governor's budget, and the future cost for these projects. As shown in the figure, an estimated $991 million will need to be appropriated in the future in order to complete these projects. Thus, the request before the Legislature represents a total cost of nearly $2.2 billion.
| Figure 1 | |||
| State Capital Outlay Program | |||
| 1999-00 and 2000-01
(In Millions) | |||
| 1999-00 Appropriations | 2000-01 Governor's Budget | Difference | |
| Legislative, Judicial, and Executive | $48.7 | $19.2 | -$29.5 |
| State and Consumer Services | 3.9 | 5.4 | 1.5 |
| Transportation (excluding highways and rail) | 31.7 | 34.4 | 2.7 |
| Resources | 253.3 | 199.3 | -54.0 |
| Health and Human Services | 51.4 | 10.5 | -40.9 |
| Youth and Adult Corrections | 485.4 | 143.4 | -342.0 |
| Education | 1.1 | 8.5 | 7.4 |
| Higher Education | 648.5 | 731.3 | 82.8 |
| General Government | 10.7 | 15.6 | 4.9 |
| Totals | $1,534.7 | $1,167.5 | -$367.2 |
| Figure 2 | ||||
| Summary of Proposed 2000-01 Capital Outlay Program | ||||
| All Funds
(In Thousands) | ||||
| Governor's Budget | ||||
| Department | Requests | Proposed 2000-01 | Future Costa | Totals |
| Legislative, Executive, and Judicial | ||||
| Judicial Council | $5,004 | $5,004 | --b | $5,004 |
| Justice | 14,240 | 14,240 | -- | 14,240 |
| State and Consumer Services | ||||
| Franchise Tax Board | $126 | $126 | -- | $126 |
| General Services | 5,264 | 5,264 | --b | 5,264 |
| Business, Transportation, and Housing | ||||
| Transportation | $8,937 | $8,937 | $204,848 | $213,785 |
| Highway Patrol | 10,517 | 7,361 | 6,045 | 13,406 |
| Motor Vehicles | 19,084 | 18,073 | 5,108 | 23,181 |
| Resources | ||||
| Tahoe Conservancy | $10,956 | $10,956 | -- | $10,956 |
| Conservation Corps | 1,181 | 1,181 | $12,500 | 13,681 |
| Forestry and Fire Protection | 81,513 | 62,420 | 64,826 | 127,246 |
| Fish and Game | 508 | 508 | 3,369 | 508 |
| Wildlife Conservation Board | 50,772 | 50,772 | -- | 50,772 |
| Boating and Waterways | 13,709 | 9,307 | 1,824 | 11,131 |
| Coastal Conservancy | 36,755 | 36,755 | -- | 36,755 |
| Parks and Recreation | 48,864 | 19,659 | 24,500 | 44,159 |
| Water Resources | 7,500 | 7,500 | -- | 7,500 |
| Air Resources Board | 259 | 259 | 2,142 | 2,401 |
| Health and Human Services | ||||
| Health Services | $4,034 | $4,034 | -- | $4,034 |
| Mental Health | 9,633 | 2,099 | --b | 2,099 |
| Employment Development | 4,720 | 4,083 | -- | 4,083 |
| Rehabilitation | 295 | 295 | -- | 295 |
| Youth and Adult Corrections | ||||
| Corrections | $157,012 | $117,061 | $37,026 | $154,087 |
| Youth Authority | 20,598 | 26,371 | 15,313 | 41,684 |
| Education | ||||
| Education | $7,715 | $7,958 | $2,504 | $10,462 |
| State Library | 510 | 510 | --b | 510 |
| Higher Education | ||||
| University of California | $212,691 | $287,691 | $392,991 | $680,682 |
| California State University | 505,534 | 153,350 | 114,728 | 268,078 |
| Community Colleges | 311,097 | 290,194 | 76,998 | 367,192 |
| General Government | ||||
| Food and Agriculture | $19,845 | $1,936 | $20,521 | $22,457 |
| Military | 2,540 | 2,540 | 4,276c | 6,816 |
| Veterans' Homes of California | 9,100 | 9,100 | 1,263 | 10,363 |
| Unallocated Capital Outlay | 2,000 | 2,000 | -- | 2,000 |
| Totals | $1,582,513 | $1,167,544 | $990,782 | $2,158,326 |
| a Department estimates. | ||||
| b No information on future costs. | ||||
| c Includes $1.953 million in federal funds not included in the state budget. | ||||
The Governor's budget proposes funding the capital outlay program from bonds, the General Fund, special funds, and federal funds.
Figure 3 compares the sources of funds for the 1999-00 capital outlay program to those proposed in the 2000-01 Governor's Budget. As shown in the figure, the budget proposes increasing the amount for direct appropriations from the General Fund, special funds, and federal funds by a total of $137.3 million (37 percent). General Fund appropriations include increases of $75 million for the University of California and $78.5 million for youth and adult corrections. These increases are partially offset by a $70 million reduction in the area of resources. With regard to debt financing, the budget includes $662 million from general obligation bonds, of which $656 million are for higher education. The budget does not include any proposed financing from lease-payment bonds.
| Figure 3 | ||
| Sources of Funds for Capital Outlay Program | ||
| 1999-00 and 2000-01
All Funds (In Millions) | ||
| Funds | 1999-00 | 2000-01 Governor's Budget |
| General Fund | $305.6 | $398.3 |
| General obligation bonds | 760.9 | 662.1 |
| Lease-payment bonds | 405.7 | -- |
| Special funds | 56.9 | 96.8 |
| Federal funds | 5.6 | 10.3 |
| Totals | $1,534.7 | $1,167.5 |
Figure 4 displays the proposed funding for each department by fund source.
| Figure 4 | |||||
| Proposed 2000-01 Capital Outlay Program Appropriations by Fund Type | |||||
| (In Thousands) | |||||
| Department | Bonds | General | Special | Federal | Total |
| Judicial Council | -- | $5,004 | -- | -- | $5,004 |
| Justice | -- | 14,240 | -- | -- | 14,240 |
| Franchise Tax Board | -- | 126 | -- | -- | 126 |
| General Services (seismic retrofit) | $818 | -- | -- | -- | 818 |
| General Services (other) | -- | 4,446 | -- | -- | 4,446 |
| Transportation | -- | -- | $8,937 | -- | 8,937 |
| Highway Patrol | -- | -- | 7,361 | -- | 7,361 |
| Motor Vehicles | -- | -- | 18,073 | -- | 18,073 |
| Conservation Corps | -- | 1,181 | -- | -- | 1,181 |
| Tahoe Conservancy | -- | 4,885 | 6,071 | -- | 10,956 |
| Forestry and Fire Protection | -- | 62,420 | -- | -- | 62,420 |
| Fish and Game | -- | 375 | 40 | $93 | 508 |
| Wildlife Conservation Board | -- | 30,000 | 20,772 | -- | 50,772 |
| Boating and Waterways | -- | -- | 9,307 | -- | 9,307 |
| Coastal Conservancy | -- | 25,980 | 8,775 | 2,000 | 36,755 |
| Parks and Recreation | -- | 3,849 | 15,810 | -- | 19,659 |
| Water Resources | -- | 6,500 | 1,000 | -- | 7,500 |
| Air Resources Board | -- | -- | 259 | -- | 259 |
| Health Services | -- | 4,034 | -- | -- | 4,034 |
| Mental Health | -- | 2,099 | -- | -- | 2,099 |
| Employment Development | -- | -- | -- | 4,083 | 4,083 |
| Rehabilitation | -- | 295 | -- | -- | 295 |
| Corrections | -- | 117,061 | -- | -- | 117,061 |
| Youth Authority | -- | 26,371 | -- | -- | 26,371 |
| Education | -- | 7,958 | -- | -- | 7,958 |
| State Library | -- | 510 | -- | -- | 510 |
| University of California | 212,691 | 75,000 | -- | -- | 287,691 |
| California State University | 153,350 | -- | -- | -- | 153,350 |
| Community Colleges | 290,194 | -- | -- | -- | 290,194 |
| Food and Agriculture | -- | 1,511 | 425 | -- | 1,936 |
| Military | -- | 2,504 | -- | 36 | 2,540 |
| Veterans' Home of California | 5,021 | -- | -- | 4,079 | 9,100 |
| Unallocated | -- | 2,000 | -- | -- | 2,000 |
| Totals | $662,074 | $398,349 | $96,830 | $10,291 | $1,167,544 |
Over the last several years, the majority of capital outlay has been funded with bonds. In the 1990s, the voters have authorized $25.6 billion in general obligation bonds. Most of these authorizations have been for K-12 schools ($13.1 billion), higher education ($4.8 billion), and transportation ($5 billion). In addition to these general obligation bonds, the Legislature has authorized $6.5 billion in lease-payment bonds since 1990. These bonds have funded higher education facilities, prisons, state office buildings, state laboratories, and state homes for veterans.
As shown in Figure 5, the state's debt payments on bonds will be about $2.9 billion in the budget year--an increase of 7.5 percent over current-year costs. There are two components of this debt:
Debt for lease-payment bonds continues to grow as a share of total debt costs. For example, lease-payment debt was 13 percent of total debt payments in 1990-91 and will increase to 23 percent in the budget year. (As noted above, the Governor's budget includes no new authorizations for lease-payment bonds.)
Figure 5 also shows, with sales of currently authorized bonds, total debt payments will increase to $3.2 billion in 2005-06 and decline thereafter. This amount does not include any bonds that may be approved in the March 2000 election.
We estimate that the amount of debt payments on General Fund-backed bonds as a percent of state General Fund revenue (that is, the state's debt ratio) will be 3.9 percent for the budget year. As shown in Figure 6, this ratio rose significantly in the early 1990s, and has declined for the last four years because of stronger General Fund revenue growth. We estimate that, as currently authorized bonds are sold, the debt ratio will increase to 4 percent in 2001-02 and decline thereafter (assuming no further bond authorizations).
