Summary of LAO Findings and Recommendations on the 2011-12 Budget

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Budget Issue
LAO Finding Or

Last Updated
See Detail  Department of Transportation Request for $1.9 billion in transportation special funds to pay for capital outlay support (COS) Approve the overall level of COS resources requested. Recommend the Legislature adopt two changes to the mix of resources requested: (1) modify proposed budget bill language to allow up to 20 percent of the workload to be performed by private consultants, and (2) approve a technical adjustment to decrease the funding for COS activities supported from the State Highway Account by 430 FTEs (about $70 million) and increase reimbursement funding by an equivalent amount. 5-24-11
See Detail  Department of Transportation Request for $63 million to replace vehicles to comply with air quality regulations Approve the request for $63 million in funding from the State Highway Account and also adopt budget bill language directing the Department of Finance to adjust the appropriation based on the findings of an ongoing vehicle fleet survey. Specify that funding not needed for vehicle replacement instead be made available for pavement maintenance. 5-24-11
See Detail  High-Speed Rail Authority Governor’s May Revision proposals Approve the Governor’s proposals to increase funding for IT services by $781,000, increase staff positions by 15 at a cost of $1.7 million, and fund the interagency agreement with Caltrans for $1.25 million. Reject the $500,000 augmentation for the outreach and communications contract, as well as the adjustments to the capital outlay proposals. These recommendations are consistent with those we make in our recent report High Speed Rail Is at a Critical Juncture. 5-23-11
See Detail  Secretary for Business, Transportation, and Housing Request for $279,000 in General Fund dollars to promote the jobs tax credit for small businesses Reject the Governor’s request for $279,000 in General Fund dollars to fund one staff and consultant services for outreach and technical assistance to small businesses for the state’s jobs tax credit. Our analysis finds that certain state departments and other entities that assist small businesses already provide similar efforts and as a result, providing additional funding for outreach for this tax credit would likely be duplicative. 5-23-11
See Detail  Department of Insurance Request for $748,000 to fund positions to work on implementing federal health insurance reform We recommend the Legislature reject the May Revision request for $748,000 in special funds to pay for eight currently authorized positions. Our analysis finds that the department has funding for 17 staff that is in excess of the level of resources justified on a workload basis. The department can redirect funds to pay for the eight positions. 5-23-11
See Detail  Department of Insurance Request for $8 million in special fund expenditure authority to fund 54 new positions Revised LAO Recommendation (June 2011). Recommend that the Legislature approve 39 of the 54 requested positions and reduce the Governor’s request by 15 positions. Our analysis indicates that some of the proposed positions are unjustified at this time. 2-18-11
See Detail  Crosscutting Reenactment of the fuel tax swap We recommend that the Legislature adopt the Governor's proposals to reenact the fuel tax swap and use weight fees to achieve General Fund relief of roughly $1.6 billion in 2010-11, and $943 million in 2011-12. We also recommend taking advantage of an additional $194 million in weight fees for General Fund relief. In addition, we recommend that the Legislature consider additional options to achieve even greater General Fund relief from transportation funds. 1-30-11
See Detail  California Transportation Commission Public private partnership consultant Reject without prejudice the request for a three-year $400,000 annual contract from the State Highway Account for a consultant to assist the Commission in the evaluation of public private partnership (P3) projects. Revisit the request later in the budget process when more information on workload will be available. 1-30-11
See Detail  California Science Center Unallocated reduction of $3.7 million General Fund Adopt the Governor’s January budget proposal of an unallocated reduction for the Science Center of $3.7 million General Fund. Support for the Science Center should come from a mix of funding that includes admission fees, private donations, and other non-state revenues. Given the number of annual visitors and other potential revenue sources we believe that the Center could achieve the proposed reduction. 1-27-11
See Detail  Department of Consumer Affairs - Board of Accountancy Repayment of $10 million loan to the General Fund Reject the Governor’s January 2011-12 budget proposal to repay a $10 million loan that was made from the Board of Accountancy to the General Fund in 2010-11. Adopt budget bill language to delay repayment of this loan for one year. Our review of the fund balance at the Board of Accountancy found that reserves are adequate and repayment is unnecessary in 2011-12. Delaying repayment of the loan would help to provide General Fund relief in the budget year. 1-27-11
See Detail  Department of Consumer Affairs - Board of Accountancy Peer Review Program Reject the Governor’s January proposal to fund one office technician to perform clerical workload. Advise the board to maximize the use of technology, such as the online submission of data and emailing information to licensees. More fully utilizing this technology should enable the board to reduce staff workload associated with mailing and processing hardcopy forms. 1-27-11
See Detail  Small Business Loan Guarantee Program (SBLGP) Increased federal funds Adopt Governor’s January budget proposal to augment the program by $84 million in federal funds and revert $20 million to the General Fund (GF) from SBLGP in 2011-12. Also, adopt trailer bill language to revert additional GF dollars as the lines of credit and the loans backed by roughly $24 million in state funds expire. Reduce request for additional staff by one and approve the .5 managerial position. Consider eliminating GF subsidy of $1.7 million for the financial development corporations. 1-26-11
See Detail  Department of Motor Vehicles (DMV) and California Highway Patrol (CHP) Early partial repayment ($40 million) of 2010-11 Motor Vehicle Account (MVA) loan Recommend the Legislature maximize MVA funds available for General Fund relief. Have DMV and CHP report at budget hearings on the impact of the additional savings, not scored in the Governor's January 2011-12 budget, and delay for one year the lease of the consolidated commercial drivers' license facility ($20,000 savings). 1-25-11
See Detail  Department of Transportation Project Resource and Schedule Management (PRSM) system Approve the Governor's January budget request to extend the time that the Department of Transportation has to expend $8.3 million in funds for implementation of the PRSM system. In addition, we are working with the department to identify the level of savings resulting from a change in the project. We recommend that the Legislature revisit this issue later in the budget process to score the appropriate level of savings from this change. 1-24-11
See Detail  Department of Transportation Proposition 1B capital funding Approve the Governor's January budget request to appropriate $2.3 billion of bond funding to the Department of Transportation for various Proposition 1B programs. However, recommend the Legislature adjust the dollar amounts downward to reflect existing appropriations of bond funds provided in the current year, but not yet used. We are working with the department to determine the appropriate amount of adjustment. 1-24-11
See Detail  Department of Housing and Community Development HCD administration of the Enterprise Zone (EZ) program Conforming issue. If the Legislature adopts the Governor’s January 2011-12 budget proposal to eliminate enterprise zone tax credits, recommend elimination of the ten positions at HCD responsible for administering the program. 1-23-11
See Detail  Department of Fair Employment and Housing Transfer of IT function to Department of General Services (DGS) and staff to handle new workload Adopt Governor’s 2011-12 January budget proposal to transfer DFEH’s IT workload to DGS. Reject transfer of five positions to DGS and $507,000 in General Funds to pay for these staff. Instead, eliminate the five positions at DFEH and require DGS to justify the need for additional staff on a workload basis. In addition, withhold redirecting two positions from DFEH’s IT unit to its enforcement division until volume of the new workload is better known (anticipated in mid-February). 1-22-11