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The 2019-20 Budget: Considerations for the Governor's Housing Plan


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The 2019-20 Budget: Overview of the Governor's Budget

January 14, 2019 - This report presents our office’s initial assessment of the Governor’s Budget. The budget’s position continues to be positive. With $20.6 billion in discretionary resources available, the Governor’s budget proposal reflects a budget situation that is even better than the one our office estimated in the November Fiscal Outlook. The Governor’s Budget allocates nearly half of these discretionary resources to repaying state liabilities. Then, the Governor allocates $5.1 billion to one-time programmatic spending, $3 billion to reserves, and $2.7 billion to ongoing spending. Although the Governor’s allocation to discretionary reserves represents a smaller share of resources than recent budgets, the Governor’s decision to use a significant share of resources to pay down state debts is prudent. The Governor’s ongoing spending proposal is roughly in line with our November estimate of the ongoing capacity of the budget under an economic growth scenario. This was just one scenario, however. Recent financial market volatility indicates revenues could be somewhat lower than either we or the administration estimated.

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The 2019-20 Budget: What Can Be Done to Improve Local Planning for Housing?

February 20, 2019 - As part of the 2019‑20 Governor’s Budget, the administration proposes changing state oversight of local housing decisions and proposes offering rewards to cities and counties to encourage them to plan for and approve housing. To help the Legislature in its consideration of the Governor’s proposals, this report: (1) explains the existing process through which local communities plan for housing, as well as its limitations and shortfalls; (2) describes the Governor’s proposal; (3) provides recommendations on the parts of the proposal aimed at increasing home building in the short term; and (4) offers a package of changes to improve the state’s existing long‑term planning process for housing.

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How Has COVID-19 Affected Renters and Homeowners?

January 19, 2021 - In this brief we assess how coronavirus disease 2019 (COVID-19) has affected renters and homeowners. We also provide an updated estimate of the total unpaid rental debt in California that has accumulated due to COVID-19.

Correction 1/19/21: Legend on Figure 3 corrected to match data.

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The 2021-22 Budget: Business Tax Incentives

January 28, 2021 - The Governor’s budget proposes several changes to taxation to support businesses. Two key factors for evaluating these proposals are: (1) which level of government would forgo revenue; and (2) which businesses would receive assistance. Based on these criteria and others, we recommend that the Legislature prioritize expansion of the Main Street credit, explore alternative structures for an elective S Corporation tax, and reject the proposed one-time expansions of the CAEATFA exclusion and California Competes.

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Evaluation of the Property Tax Postponement Program

October 8, 2018 - Housing is very expensive in California—in early 2018, the typical California home cost $481,000, roughly double the price of the typical home in the United States. The state offers the Property Tax Postponement (PTP) Program to help certain homeowners afford their property taxes and stay in their homes. This report evaluates the advantages and shortcomings of the PTP and offers policy alternatives for legislative consideration.

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The 2019-20 Budget: California Spending Plan (Final Version)

October 17, 2019 - Each year, our office publishes California Spending Plan, which summarizes the annual state budget. In July, we published a preliminary version of the report. This, the final version, provides an overview of the 2019‑20 Budget Act, then highlights major features of the budget approved by the Legislature and signed by the Governor. In addition to this publication, we have released a series of issue‑specific, online posts that give more detail on the major actions in the budget package.

Correction (10/29/19): Figure 4 total.

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The 2020-21 Budget: The Governor’s Homelessness Plan

February 11, 2020 - In this report we provide the Legislature context for the state’s homelessness crisis, provide an update on major recent state efforts to address homelessness, assess the Governor’s 2020‑21 homelessness plan, propose a framework to help the Legislature develop its own plan and funding allocations, and offer an alternative to the Governor’s 2020‑21 budget proposal.

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Perspectives on Helping Low-Income Californians Afford Housing

February 9, 2016 - In this follow up to California’s High Housing Costs: Causes and Consequences, we offer additional evidence that facilitating more private housing development in the state’s coastal urban communities would help make housing more affordable for low–income Californians.

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The 2019-20 Budget: Student Food and Housing Insecurity at the University of California

April 25, 2019 - The Governor proposes to provide the University of California (UC) with ongoing funding to address student food and housing insecurity. UC indicates it would use the proposed funds either to augment student financial aid or support specific food and housing initiatives. In this brief, we provide background, then describe the Governor’s proposal. Next, we offer issues to consider and provide associated recommendations.

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The 2019-20 May Revision: Considerations for the Revised Housing and Homelessness Plan

May 13, 2019 - Housing in California has long been more expensive than most of the rest of the country. In this post we assess the Governor’s 2019-20 May Revision proposals for housing and homelessness.

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The 2019-20 Budget: Analysis of Proposed Earned Income Tax Credit Expansion

March 6, 2019 - The state adopted an EITC in 2015 and expanded it in 2017 and 2018. The Governor proposes another expansion starting in 2019 that would (1) extend the income eligibility range to $30,000, (2) increase the credit amount for workers with dependents under age six, and (3) increase the credit amount for workers with earnings at the higher end of the current eligibility range. This report evaluates the Governor’s proposal, discusses potential alternative approaches, and examines implementation issues and options for providing credits on a monthly basis.

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The 2019-20 Budget: Natural Resources and Environmental Protection

February 14, 2019 - In this report, we assess several of the Governor’s budget proposals in the natural resources and environmental protection areas. Based on our review, we recommend various changes, as well as additional legislative oversight. We provide a complete listing of our recommendations at the end of this report.

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Expanding Access to Safe and Affordable Drinking Water in California—A Status Update

November 10, 2020 - In 2019 the Legislature passed and the Governor signed Chapter 120 (SB 200, Monning) establishing the Safe and Affordable Drinking Water (SADW) Fund, which provides up to $130 million annually for efforts to provide safe drinking water for every California community. The legislation tasked the State Water Resources Control Board (SWRCB) with administering the funding and overseeing efforts to implement both short‑ and long‑term solutions to persistent drinking water problems. One year later, SWRCB has made good progress in establishing spending priorities, beginning to allocate funds and execute projects, and collecting essential data to identify the communities that should be targeted for improvements. However, the state is still in the very early stages of implementation. Given the serious threats to public health, safety, and environmental justice posed by existing drinking water deficiencies, the Legislature will want to continue conducting robust oversight over how efforts to rectify these conditions proceed.

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Housing and Homelessness Funding Impacting Children

March 25, 2019 - These materials were prepared for an informational hearing about housing challenges and their impact on the well-being of children by the Senate Select Committee on the Social Determinants of Children’s Well-Being.

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The 2021-22 Budget: Overview of the Spending Plan (Final Version)

October 27, 2021 - Each year, our office publishes the California Spending Plan to summarize the annual state budget. This publication provides an overview of the 2021-22 Budget Act, then highlights major features of the budget approved by the Legislature and signed by the Governor.

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The 2020-21 Budget: Overview of the Governor's Budget

January 13, 2020 - This report presents our office’s initial assessment of the Governor’s budget. We estimate the Governor had a $6 billion surplus to allocate to discretionary purposes in 2020-21. The Governor allocates most of the surplus toward one-time purposes, including maintaining a positive year-end balance in the state’s discretionary reserve. Under the administration’s estimates, total reserves would reach $20.5 billion at the end of 2020-21—this represents a $1.7 billion increase from the 2019-20 enacted level. California continues to enjoy a healthy fiscal situation. Despite its positive near-term picture, the budget’s multiyear outlook is subject to considerable uncertainty. In addition to describing the condition of the budget under the Governor’s proposal, this report discusses tools the Legislature can use to mitigate against these heightened risks.

January 20, 2020: Upon further review, one item included in the original version of Appendix Figure 3 on discretionary on health spending should not have been included (specfically, use of the Medi-Cal drug rebate fund to offset General Fund costs). Removing this item—which reduces General Fund spending—from the list of discretionary choices made in the Governor’s budget increases our calculation of the surplus to $6 billion. The document is updated to reflect these changes.

Update 1/24/20: Adjusted Judicial Branch items in Appendix Figure 1 to reflect ongoing spending.