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LAO Report

Report

The Patient Protection and Affordable Care Act: An Overview of Its Potential Impact on State Health Programs

May 13, 2010 - The Patient Protection and Affordable Care Act (PPACA), often referred to as federal health care reform, is far-reaching legislation that will change how millions of Californians access health care coverage. We provide an overview of the new law and describe its implications for state health programs in the near term and the long term. We also recommend the Legislature think broadly about implementing PPACA and identify key issues to address including: (1) future costs for health programs, (2) whether structural changes to health programs are warranted, (3) whether PPACA should prompt a reevaluation of the state-local relationship, (4) new strategies that could bolster health care quality and outcomes, and (5) how future workforce and health infrastructure needs should be addressed.


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Year-One Survey: Update on School District Finance and Flexibility

May 4, 2010 - We surveyed public school districts in California to see how they are responding to various state and federal developments. In particular, the survey asked districts to report how they were responding to the newly granted flexibility to shift funds among, as well as away from, approximately 40 state-funded categorical programs. The survey also asked districts to report how they were using federal stimulus funding. We found that categorical flexibility is having a positive impact on local decision making and that the majority of districts generally appear to be using freed-up categorical funds to support core classroom instruction. Also, roughly two-thirds of the federal stimulus funds were used to minimize teacher layoffs and the remainder used to backfill reductions to categorical programs and make various one-time purchases. Finally, we lay out a package of recommendations that the Legislature could adopt in 2010-11 to provide school districts with additional flexibility.

(Short video introducing this report)


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Analysis of Newly Identified Mandates

May 3, 2010 - Semiannual report


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Moving Forward With Eligibility and Enrollment System Improvements

May 3, 2010 - Through Chapter 7, Statutes of 2009, the Legislature has directed the Department of Health Care Services and the Department of Social Services to implement a statewide eligibility and enrollment determination process for the California Work Opportunity and Responsibility to Kids (CalWORKs), Food Stamp, and Medi-Cal programs. The new statewide process is intended to achieve two primary outcomes: (1) providing better service to people applying for these programs and (2) lowering administrative costs through better use of technology. We identify possible improvements and cost-savings in the eligibility and enrollment process. We also recommend a general approach that the Legislature may wish to consider when making difficult decisions about how to proceed with Chapter 7.


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Evaluating the Sale-Leaseback Proposal: Should the State Sell Its Office Buildings?

April 27, 2010 - Recent legislation authorized the Department of General Services (DGS) to sell and then lease back 11 state-owned office properties. The sale-leaseback is designed to free up the state’s equity in the buildings to provide one-time revenue for addressing the state’s current budgetary shortfall. We estimate that the sale of buildings would result in one-time revenue to the state of between $600 million and $1.4 billion, but that annual leasing costs would eventually exceed ownership costs by approximately $200 million. Over the lives of these buildings, we estimate the transaction would cost the state between $600 million and $1.5 billion. The Legislature will need to weigh how these costs compare to other alternatives for addressing the state’s budget shortfall. In our view, taking on long-term obligations—like the lease payments on these buildings—in exchange for one-time revenue to pay for current services is bad budgeting practice as it simply shifts costs to future years. Therefore, we encourage the Legislature to strongly consider other budget alternatives.

(Short video introducing this report)


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Implementation of AB 32—Global Warming Solutions Act of 2006

April 14, 2010 - The state's major climate change legislation—commonly referred to as "AB 32"—is approaching a crossroads in its implementation. The state's AB 32 activities, currently carried out mainly by the Air Resources Board (ARB) but also by eleven other state agencies, will be shifting from the development of plans and regulations to program implementation and enforcement. Legislative oversight of the overall size and components of the AB 32 program budget is very important, particularly given this upcoming shift in the program's focus. In this budget-focused brief, we provide details of the Governor's AB 32 budget proposal and ARB's plan to pay for most of the AB 32 program administrative activities from a new fee. We also offer recommendations to ensure that (1) sufficient resources are devoted to economic analysis of AB 32 measures and (2) future AB 32 expenditures and fees are justified and set at appropriate levels.


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The 2010-11 Budget: Social Services

March 26, 2010 - Addresses the 2010-11 Budget through a Special Session brief, a summary of Social Services findings and recommendations, and the companion reports Health and Social Services Budget Primer and Health and Social Services—A Restricted Environment.


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The 2010-11 Budget: Health

March 26, 2010 - Addresses the 2010-11 Budget through a Special Session brief, a summary of Health findings and recommendations, and the companion reports Health and Social Services Budget Primer and Health and Social Services—A Restricted Environment.


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Liquid Assets: Improving Management of the State's Groundwater Resources

March 24, 2010 - California’s water system is facing a series of challenges affecting water availability, reliability, and delivery. Reevaluating how groundwater is managed is necessary if it is to achieve its full potential as a reliable source of water. In this report, we present the Legislature with a series of actions that would be phased in over a period of time to address current and emerging groundwater management issues, including bringing science and law together to accurately reflect the physical interconnection of surface water and groundwater.


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Maximizing Federal Funds for HIV/AIDS: Improving Surveillance and Reporting

February 22, 2010 - In this report, we identify significant problems in the state’s ability to accurately track AIDS–related cases. These gaps in the surveillance database weaken the state’s ability to use it as an effective tool to track and respond to trends in the disease. These problems also affect the state’s ability to collect additional federal funding that could otherwise be available to offset the cost of state AIDS programs. We recommend two actions that the state could take: First, have the state Office of AIDS (OA) take steps to ensure that persons receiving services through state–supported programs are reflected in the HIV surveillance database. Second, require electronic reporting by laboratories that must provide HIV data to local health departments. These changes, our analysis indicates, would make the state’s surveillance database more complete, improve the state’s knowledge of disease trends, and make the state more competitive for federal AIDS funding.


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Education Mandates: Overhauling a Broken System

February 2, 2010 - Currently, the state requires K-12 and community college districts to perform hundreds of mandated activities, the majority of which provide little benefit to students or teachers. Since the state does not pay for K-14 mandates on a regular basis, the result is billions in outstanding costs the state must eventually pay. In this report, we recommend comprehensively reforming K–14 mandates. If a mandate serves a purpose fundamental to the education system, such as protecting student health or providing essential assessment and oversight data, it should be funded. If not, the mandate should be eliminated. Taken as a whole, our reform package would relieve school districts and community colleges of performing hundreds of activities that provide little value to students while providing them with adequate and timely compensation for the activities still required of them. In addition, comprehensively reforming mandates would reduce the state’s annual obligations by more than $350 million—funds that could be saved or allocated to districts for higher priorities.


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The Master Plan at 50: Greater Than the Sum of Its Parts--Coordinating Higher Education in California

January 28, 2010 - California’s approach to coordination of the state's higher education system over the past 50 years has been indirect, resting mostly on well–defined missions and eligibility pools to guide the development of higher education institutions. This approach worked well during several decades of expansion, producing arguably the greatest higher education system in the world. The effectiveness of this approach has declined over the last quarter century, however, and institutions have been left to pursue their separate interests with insufficient mechanisms to advance the state’s priorities. This report examines the need for a systemwide approach to planning and coordination of California’s system of higher education, and proposes strategies for improvement.


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Considering the State Costs and Benefits: In-Home Supportive Services Program

January 21, 2010 - The In-Home Supportive Services (IHSS) program is the fastest–growing major social services program, providing care for over 430,000 recipients, at an annual total cost of about $5.5 billion. The program, which is available to low-income elderly and disabled persons, provides various services to recipients in their own homes and can enhance the quality of life for recipients by making it easier to live at home. For many recipients, the program allows individuals to live at home rather than in an institutional setting (typically, a nursing home). By preventing—or at least delaying—the move to a nursing home, the program can save money for the state. In this report we look at the net fiscal impact of the IHSS program on the public sector and conclude that the state maximizes its net fiscal impact by targeting IHSS services to those recipients who are most likely to enter a nursing home in the absence of the program. Given the state’s continuing fiscal problems, we offer additional options for the Legislature to consider that can achieve state savings through increased targeting.

(Short video introducing this report)


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Counties and Design-Build

January 12, 2010 - This report presents a summary of reports received by the LAO from California counties on construction projects that they completed with the design-build delivery method. Although it was difficult to draw conclusions from the reports received about the effectiveness of design-build compared to other project delivery methods, we do not think that the reports provide any evidence that would discourage the Legislature from granting design-build authority to local agencies on an ongoing basis. In doing so, however, we recommend the Legislature consider some changes such as creating uniform design-build statute, eliminating cost limitations, and requiring project cost to be a larger factor in awarding the design-build contract.


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The Master Plan at 50: Improving State Oversight of Academic Expansions

December 2, 2009 - The state’s public higher education segments periodically create new degree programs and schools, and each segment has internal procedures for reviewing and authorizing them. State law delegates the state’s oversight of proposals to the California Postsecondary Education Commission (CPEC) but their role is only advisory and limited to certain proposals. In 2007 CPEC determined that a new law school proposed for University of California (UC) Irvine was unnecessary and duplicative. The opening of the new law school this fall despite CPEC’s objections calls into question the ability of the state’s approval process to prevent unnecessary or nonpriority programs and schools. In this report, we examine a number of new programs and schools that have been approved in the last few years to determine the efficacy of the state’s approval process. We conclude that there are several structural changes that are needed to improve the approval process including (a) measuring supply and demand in major fields, (b) identifying the extent to which proposals fit with the state's priorities and resources, and (c) increasing oversight from the Legislature.

(Short video summary)