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1,015 Publications Found
January 31, 2011 - For four of its budget proposals, the administration uses a new approach for accruing (attributing) revenues to each fiscal year. In the administration's budget figures, this approach increases revenues available for the 2011-12 budget process by over $700 million and decreases the 2011-12 minimum funding guarantee for schools and community colleges by $1.5 billion below what it would have been otherwise. We find that the administration's new accrual approach—while imperfectly executed in its forecast—has some merit. It would move state budget accounting closer—in some respects—to generally accepted accounting principles. We fault the administration for not describing the new approach and its implications more clearly in its public budget documents and recommend that the Legislature take steps to require more transparency in the future.
January 27, 2011 - The Governor proposes to increase California Community College (CCC) fees from $26 per unit to $36 per unit beginning on July 2011. We believe that a fee increase should be an important component of the state’s budget strategy for CCC, as it would leverage more federal funds (in the form of federal tax credits) to mitigate programmatic impacts on CCC instruction and services, while having no negative effect on financially needy students (who do not pay fees). While the Governor is on the right track, the Legislature might consider going even further in the budget year to tap additional federal dollars in support of the CCC system. In future years, we recommend the Legislature ensure that CCC fee levels are pegged to the maximum amount covered by federal tax credits.
January 25, 2011 - Recently, the Legislature enacted a package of changes known as the “fuel tax swap” to achieve General Fund relief. However, the passage of ballot measures in November 2010 potentially undoes portions of the tax swap package. In response to these ballot measures, the Governor’s January 2011-12 budget proposes statutory changes to recapture the use of transportation funds to help balance the state’s budget. In this brief we describe and evaluate these recent changes and the Governor’s proposal. We also provide additional options that the Legislature may wish to consider that offer more solutions to achieve General Fund relief.
January 25, 2011 - In this brief, we (1) provide an overview of the Governor’s budget proposals for the judicial branch and (2) recommend specific actions to achieve savings, while at the same time minimizing the impacts on access to the courts. Some of our cost-saving recommendations include changes in court reporting practices, utilizing competitive bidding for court security, contracting out for court interpreter services, and offsetting General Fund costs with other fund sources in the judicial branch.
January 24, 2011 - Over the last several years, the state has deferred payments to school districts as a way to achieve significant Proposition 98 savings. Relying on deferrals has allowed the state to achieve significant one-time savings while simultaneously allowing school districts to continue operating a larger program by borrowing or using cash reserves. As the magnitude and length of payment deferrals have increased, however, school districts have found fronting the cash required to continue operating at a higher programmatic level increasingly difficult. As part of his 2011-12 budget plan, the Governor continues to rely heavily on payment deferrals. His one major budget proposal for K-12 education is a $2.1 billion deferral. In this report, we track the state's increased use of deferrals, discuss the advantages and disadvantages of deferrals, and highlight several other major factors the Legislature should consider as it decides whether to approve additional K-12 deferrals.
January 24, 2011 - The Governor’s budget solutions in higher education include unallocated General Fund reductions of $500 million for the University of California (UC) and the California State University (CSU). As we discuss in our recent publication, The 2011‑12 Budget: Higher Education Budget in Context, while these reductions are large, in our view they do not appear unreasonable given the size of the state’s budget problem, and considering that the current-year budget imposed no program reductions on the universities. Despite some new revenue from tuition increases, the universities would have to implement a range of service reductions affecting students, faculty, and staff to absorb these reductions. This brief provides our recommendations for mitigating the impact of the reductions on UC’s and CSU’s educational missions.
January 24, 2011 - The Governor’s budget plan provides $2.2 billion for child care and development (CCD) in 2011-12—a reduction of $535 million, or 19 percent, compared to the current year. To achieve these savings he proposes several significant changes to current policies. In assessing the Governor’s CCD proposals and building its own CCD package, we recommend the Legislature: (1) balance access to and quality of care, (2) prioritize services for those who most need them, and (3) prioritize direct service over administrative activities. Consistent with these principles, we recommend the Legislature reject the Governor’s proposal to cut state subsidies by 35 percent, reconsider the Governor’s proposal to restore CalWORKs Stage 3 child care, and approve—perhaps in modified form—his proposals to change eligibility criteria and reduce administrative and support activities. We also offer the Legislature a menu of additional CCD savings options and build three illustrative CCD packages.
January 21, 2011 - Persuant to recent legislation authorizing the California State University (CSU) to independently offer Doctor of Education (Ed. D. ) degrees, the CSU, the Department of Finance (DOF), and the Legislative Analyst’s Office (LAO) prepared a report describing and assessing the early implementation of the new doctorate programs. In this brief, we outline our recommendations to the legislature, which include placing conditions on the further expansion of CSU doctoral programs and requiring the CSU to provide additional reporting about their doctoral degrees.
January 20, 2011 - In recent years, community college enrollment has been constrained by two major factors: (1) reductions in course-section offerings as a result of state budget cuts, and (2) strong demand for CCC services by adults seeking retraining and other skills at a time of weak state and national economic growth. Given limited resources, we believe that the state should target funds that best meet the state’s highest priorities for community college services. We recommend the Legislature: (1) adopt statewide registration priorities that reflect the Master Plan’s primary objectives, (2) place a limit on the number of taxpayer-subsidized credit units that students may earn, and (3) restrict the number of times that a student may repeat physical education and other classes at taxpayers’ expense. Our recommendations would (1) help increase opportunities for high-priority students to enroll in courses they need to progress toward their educational goals, and (2) reduce funding for lower-priority enrollment by approximately 50,000 FTE students—for savings to the state of about $235 million.
January 19, 2011 - The Governor’s proposed 2011-12 budget includes sizable General Fund reductions for the state’s university systems and the community colleges totaling about $1.4 billion. While the administration does not provide many specific proposals as to how those reductions would be accommodated, they could affect access to higher education programs, the price paid by students, average class size, and the availability of various related services, among other things. The budget assumes fee and tuition increases at all three public segments. At the same time, the Governor’s budget would fully fund financial aid programs, thus helping to ensure that cost does not prevent enrollment by financially needy students. The budget also includes General Fund augmentations to backfill one-time federal funds received by the universities in 2010-11, pay for increased retirement costs, and cover other workload adjustments.
December 7, 2010 - On December 6, 2010, Governor Schwarzenegger declared a fiscal emergency and called the new Legislature into special session to address the anticipated 2010‑11 General Fund deficit—estimated by our office at $6.1 billion. The Governor’s special session proposals would decrease the gap between General Fund revenues and expenditures by $1.9 billion in 2010‑11 and by $8 million in 2011‑12, thereby reducing the $25.4 billion budget problem that we have identified to $15.5 billion. The Governor's proposals consist of $7.4 billion of expenditure-related reductions and two major revenue proposals. Essentially all of these proposals were rejected earlier this year by the prior Legislature. The Governor also proposes to transfer vehicle weight fee revenues to the General Fund. This would achieve an estimated $850 million in budget solutions in 2010‑11 and $727 million in 2011‑12 by reimbursing the General Fund with weight fee revenues for certain transportation bond debt service costs, and also loaning a portion of the weight fee revenues to the General Fund. Under the proposal, the fuel tax revenues that would have helped the General Fund prior to Proposition 22 would now be available for transportation programs.
October 25, 2010 - While distance education is not—and is not intended to be—suitable for everyone (students as well as faculty), we find that it offers an important alternative means of providing instruction that can complement existing formats and expand options for the state’s students and segments. In order to take fuller advantage of this potential, we believe that the Legislature should guide a clearer statewide vision that specifies data which the segments should collect and report on distance–education students, and which clarifies expectations concerning intercampus collaborations and other partnerships. To that end, we make a number of recommendations.
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October 20, 2010 - California's Unemployment Insurance (UI) program became insolvent in 2009, ending that year with a shortfall of $6.2 billion. Absent corrective action, the fund deficit is projected to increase to approximately $20 billion at the end of 2011. This report looks at the history of the UI program, compares California's program to those in other states, examines different scenarios for addressing the insolvency, and makes recommendations to the Legislature for solving this difficult problem.
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June 14, 2010 - Recently, there has been significant legislative and public interest in the state’s Every Woman Counts (EWC) program for breast cancer early detection. We provide background on the EWC program and other state breast cancer programs and describe the recent history of the program, including caseload and funding trends and recent program changes. We also recommend the Legislature adopt a modified version of the Governor’s May Revision cost containment proposals, consider redirecting existing funding for research to direct clinical services, and improve transparency and oversight by requiring the administration to prepare a formal budget estimate for the EWC program.
May 26, 2010 - The February 2009 state budget agreement changed the apportionment formula used to determine California taxable income for firms that also operate in other states. While the current formula considers the location of firms’ sales, property, and payroll, starting in 2011 firms will have the option to consider only their sales. This policy is intended to encourage firms to produce in California and sell into other states. In this report, we examine the rationales for different approaches to apportionment and evidence from California and other states on how changes to apportionment laws affect both economic activity and tax revenue. Our findings indicate that: (1) a formula with a higher weight on sales and lower weights on property and payroll promotes job growth to some extent; (2) with most states’ formulas now based only on sales, the old formula that used property and payroll could put some California producers at a competitive disadvantage; and (3) allowing firms to choose their formula every year arbitrarily favors some firms over others. We recommend that the state require all firms to use the single sales factor, which would help the state’s competitiveness while limiting the cost to the budget.