Overview

• Spending by Major Program
• State Administration
• Tax Relief and Local Government Payments
• State Employee Compensation and Retirement Programs

Crosscutting Issues

• Vacant Positions
• Statewide Vacancy Rate Consistently Has Been About 14 Percent
• Salary Levels Often Are Not the Main Reason For High Vacancy Rates
• Recommend Repealing Ineffective Law on Abolishing Vacant Positions
• Options for the Legislature to Address Vacant Positions
• Suggested Questions for the Legislature to Ask Departments About Vacant Positions
• Broad Legislative Efforts Needed to Simplify, Expedite State Hiring Processes

Departmental Issues

• Secretary for Business, Transportation and Housing (0520)
• Infrastructure State Revolving Fund Program
• Project Scoring Criteria Do Not Effectively Target Key Program Objectives
• Additional Staffing Not Justified on a Workload Basis
• Reporting Inadequate to Facilitate Legislative Oversight
• Office of Planning and Research (0650)
• Volunteers Come at High Cost
• Suspend Discretionary Grants
• Office of Emergency Services (0690)
• Restructure Local Assistance for Public Safety
• Decision on Fire Engines Tied to Surcharge Proposal
• Department of Insurance (0845)
• Budget Provides No Staff for Collection of Special Assessment
• California State Lottery Commission (0850)
• Legislative Considerations Regarding Changes to the Lottery
• Noting Weak Lottery Sales, Governor Proposes Leasing It to Private Entity
• A $37 Billion Up–Front Payment to the State Is Unlikely
• Recommend Considering Strategies to Improve the Lottery’s Performance
• California Gambling Control Commission (0855)
• Suspend Use of Tribal Revenues for Transportation Purposes—$101 Million for the General Fund
• Under New Compacts, Special Distribution Fund Spending Can Directly Affect the General Fund
• Administration Proposal Unnecessarily Deprives General Fund of $40 Million in Revenue
• Lower Appropriations for Local Casino Grants Will Help the General Fund
• Key Reports From Commission To Be Submitted By March 1
• Withhold Recommendation on All Commission Budget Proposals, Pending Review of the Reports
• Display of General Fund Tribal Compact Revenues
• More Transparency Needed
• Board of Equalization (0860)
• E–Services Deliver a Return on Investment
• Some Tax Gap Auditors Would Provide Minimal Benefit
• Franchise Tax Board (1730)
• Additional Revenues From Closing the Tax Gap
• Administration’s Revenues Scored Too Low
• Recommend Additional Efforts
• CalPERS—Pension Contributions (1900/Control Section 3.60)
• Budget Assumes Stable Pension Contribution Rates
• CalPERS’ Inconsistency in Discussing Its Funded Condition May Confuse Policy Makers and Public
• Recommend Applying Commission’s Independent Performance Audit Recommendation to CalPERS
• $64 Billion of Unfunded Pension Liabilites Among State and Local Pension Systems
• California State Teachers’ Retirement System (1920)
• System’s Funded Status Improved in Most Recent Valuation
• Proposal to Delay Court–Ordered Interest Payment Is Risky
• Recommend That Legislature Again Reject Plan to Guarantee Teacher Benefit
• Recommend Applying Commission’s Independent Performance Audit Recommendation to CalSTRS
• Department of Real Estate (2320)
• Real Estate Fraud Prosecution Trust Fund Program
• Employment Development Department (7100)
• Reprioritizing WIA Discretionary Funds
• Department of Industrial Relations (7350)
• Proposal to Relocate Headquarters Is Premature
• Department of Personnel Administration (8380)
• Layoff–Related Workload Will Depend on Budget Plan
• Financial Information System for California (8880)
• Increasing Legislative Oversight For the Proposed (FI$Cal)
• Background: 2007 Project Proposal
• Legislative Direction
• Assessment of the Response to Budget Control Language
• Revised Project Proposal
• Assessing the Advantages and Disadvantages of Administration’s Approach
• Benefits of Proceeding Now
• Limitations of Administration’s Approach
• LAO Alternative: Limit Initial Scope and Then Pause for Legislative Approval After Wave 1
• Key Features of LAO Alternative
• Analyst’s Recommendation
• Commission on State Mandates (8885)
• Overview
• No Funds to Pay 2007–08 Mandate Costs
• Animal Adoption mandate
• Background
• Analysis
• Recommendation
• Analysis of Newly Identified Mandates
• Military Department (8940)
• Tuition Assistance Program Not Justified
• Decision on Helicopters Tied to Surcharge Proposal
• Tax Relief (9100)
• Recommend Phase–Out of Subventions for Open Space
• Alternatives to Proposed Changes to Senior Citizens’ Property Tax Assistance
• Health and Dental Benefits For Annuitants (9650)
• Initial Administration Estimates Appear Reasonable
• Benefits Exempt From Governor’s Proposed Reductions, But Some Savings Options May Exist
• The State Should Start Addressing $48 Billion of Unfunded Liabilities for These Benefits
• At Least $118 Billion of Unfunded State and Local Retiree Health Liabilities
• Augmentation for Employee Compensation (9800)
• Background
• Improved Budgeting Practices
• This Year, Virtually All Funding for Compensation Increases Is In This Item
• With Most Contracts Expiring, the Legislature Has Broad Discretion to Control Employee Costs
• Recommend Targeting Increases to Critical Staffing Problems and Avoiding Multiyear Labor Agreements
• Governor’s Budget Funds Pay Increases for Correctional Officers, CHP Officers, Engineers, and Health Professionals
• The Layoff Process Takes a Long Time in State Government
• Budget Balancing Reductions (Control Section 4.44)
• Any Reductions Should Be Made Directly to Department’s Appropriations