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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)
March 10, 2010 - Presented to Senate Revenue and Taxation Committee
March 9, 2010 - This responds to Assembly Member De León's request relating to California’s regulatory environment and AB 32 (Núñez), the Global Warming Solutions Act of 2006 (Chapter 488, Statutes of 2006). Specifically, you have asked that we analyze the methodologies, data, and reliability of the findings of two studies by Varshney and Associates. In our response, we summarize the methodologies and analyses contained in these two studies, discuss their findings, and provide our assessment of the analyses supporting their conclusions.
March 4, 2010 - This responds to Senator Cogdill's request for an analysis of the net impact on jobs in California that would occur as a result of the implementation of AB 32 (Núñez), the Global Warming Solutions Act of 2006, Chapter 488, Statutes of 2006. In our response, we briefly summarize the basic provisions of AB 32 and its planned implementation through the California Air Resources Board’s (CARB’s) Scoping Plan (SP), discuss the avenues by which the SP would potentially affect California jobs, and present the jobs-related effects of the SP as estimated by CARB. We then comment on CARB’s analysis and offer our own view about how the SP might affect jobs.
February 3, 2010 - Presented to Senate Budget and Fiscal Review Committee
January 12, 2010 - Presented to Assembly Revenue and Taxation Committee
November 18, 2009 - Our forecast of California’s General Fund revenues and expenditures shows that the state must address a General Fund budget problem of $20.7 billion between now and the time the Legislature enacts a 2010–11 state budget plan. The budget problem consists of a $6.3 billion projected deficit for 2009–10 and a $14.4 billion gap between projected revenues and spending in 2010–11. Addressing this large shortfall will require painful choices—on top of the difficult choices the Legislature made earlier this year.
November 17, 2009 - Presented to Senate Labor and Industrial Relations Committee
June 10, 2009 - Presented to Senate Committee on Revenue and Taxation
June 3, 2009 - Presented to Budget Conference Committee
May 7, 2009 - Presented to Senate Budget and Fiscal Review Subcommittee No. 5 on Revenues, the Economy, and Labor
March 23, 2009 - Presented to Assembly Revenue and Taxation Committee
February 13, 2009 - Presented to Commission on the 21st Century Economy
February 6, 2009 - To assist the Legislature in resolving the 2009‑10 budget gap, we developed a list of proposals that would raise more than $5 billion in each of 2009‑10 and 2010‑11. Our proposed options include eliminating or modifying 12 tax expenditure programs for a savings of $1.7 billion over the next two years. In general, these recommendations are based on our conclusion that these programs lack a strong rationale or are not sufficiently effective or efficient in achieving their stated goals. We also identify two targeted rate increases—increasing the vehicle license fee (VLF) to 1 percent and a three-year temporary PIT surcharge—that, combined, would raise $3.4 billion in 2009‑10 and $3.5 billion in 2010‑11. These options could be considered by the Legislature in lieu of any of the Governor’s revenue-related proposals. We believe these proposals have merit, both for tax policy reasons (for example, the VLF increase would result in all property in California taxed at the same rate) and for reducing the net impact of any rate increases on taxpayers (as both the VLF and PIT are deductible for federal tax purposes).
January 22, 2009 - Legislative Analyst Mac Taylor's presentation to the Commission on the 21st Century Economy.