M E M O R A N D U M

Our ninth annual contest to test just how closely the members of the news media are reading our Perspectives and Issues (P&I) and Analysis books is over. This time, the analysts win.

The contest rules provided that the first reporter to submit a completed and correct entry by the deadline would win. No correct entry was submitted by noon yesterday, so our hard-working analyt­ical staff at LAO who helped to dream up these questions won this time out. In light of public health concerns over obesity, their prize was an assortment of bagels and muffins from Noah’s Bagels instead of the traditional prize of donuts.

To find the correct answer, click on the question:

1.  The Department of Motor Vehicles (DMV) faces a statutory deadline of October 2006 to set up a new computer system so it can suspend the registration of vehicles when their owners fail to provide evidence to the state that they have auto insurance. Which of the following events has occurred during the development of this project?

• (A) In February 2005, DMV proposed to contract out the new computer system to a vendor.
• (B) In May 2005, DMV proposed instead to hire staff to carry out the project.
• (C) In July 2005, DMV changed its mind and again proposed to hire a vendor.
• (D) All of the above occurred and the project is unlikely to be completed by the October 2006 deadline.

2.  The Department of Health Services (DHS) used to assume that nursing evaluators who help with nursing home inspections could on average provide about 1,500 productive hours of work each year. The DHS budget asks for 96 more staff evaluators to do this work. How much productive work did it assume each new nurse evaluator would provide?

• (A) 897 hours per worker per year.
• (B) 1,364 hours.
• (C) 1,412 hours.
• (D) 1,968 hours.

3. The School Land Bank Fund is expected to have a $59 million balance at the end of 2006-07 that can be used to acquire property and earn lease revenues for the support of public education. How much has been spent for these activities in the last five years?

• (A) Nothing.
• (B) $12 million.
• (C) $114 million.
• (D) $256 million.

4. The budget proposes to provide $6.5 million for the development of hydrogen fueled automobile technology for 2006-07. The Legislature provided $6.5 million for this so-called “hydrogen highway” project in a 2005 bill. How much of this allotment of money is now projected to actually be spent during the current fiscal year?

• (A) $500,000.
• (B) $3 million.
• (C) $6.5 million.
• (D) $24.5 million.

5. Which of these acronyms does not represent a federal transportation funding program?

• (A) NCIIP.
• (B) SAFETEA-LU.
• (C) PNRS.
• (D) CTC.

6.  Which of the following is the slang term for a substance prohibited by regulation for certain animals in California?

• (A) Hot fudge sundaes.
• (B) Milkshakes.
• (C) Donuts.
• (D) Jelly beans.

7.  What is the phenomenon referred to as “spread”?

• (A) The process of leasing surplus state lands for agricultural production.
• (B) The sometimes significant gap between what the state reimburses a pharmacy for providing drugs to certain patients and what the pharmacy paid for the drug.
• (C) The odds established for various categories of betting regulated by the state Gambling Control Commission.
• (D) The weight gain ordinarily experienced by an LAO director during the Analysis period.

8.  The budget proposes a new human resources initiative to assist state departments in coping with the expected retirement of up to 100,000 "baby boom" state employees during the next decade. The new initiative would be supported by a staff of how many state employees?

• (A) 100.
• (B) 25.
• (C) 8.
• (D) 1.

9.  The state has budgeted more than $200 million to pay for emergency repairs at schools to address conditions that pose a threat to the health and safety of students or staff. Almost none of the money has been allocated to districts. What does the LAO identify as one of the reasons why?

• (A) School districts are reluctant to spend money on repairs because it is uncertain if the state will reimburse them after-the-fact for the work.
• (B) Schools already had sufficient unspent bond funds available for these projects.
• (C) Continued litigation over the school repair issue has held up release of the funds.
• (D) Because of recent statewide school facility investments, only a limited number of school districts have outstanding emergency repair needs.

10.  What are fiscal experts referring to when they refer to the “tax gap”?

• (A) The separation in dollars between different state income tax brackets.
• (B) The difference between the amount of taxes legally owed to the state and the amount actually remitted by taxpayers.
• (C) The relatively different share of taxes owed by poor taxpayers and high-income taxpayers as a proportion of their personal incomes.
• (D) The amount of additional state tax revenues that would be needed to solve the state’s structural budget problem.