LAO’s Overview of the Governor’s Proposed Budget for 2020-21
https://lao.ca.gov/reports/2020/4135/budget-overview-2020.pdf
The Legislative Analyst annually analyzes, critiques and offers alternatives to the Governor’s Budget.
The Governor is facing a potential budget surplus of $6 billion in the coming year; he devotes $1.6 billion to building the state’s reserves (Rainy Day fund), $1.4 billion to ongoing spending and $2.7 billion to one time spending. Most of the education spending is ongoing; most of the Human Services, Housing and Homelessness spending is one time, likewise with Natural Resources, the Environment and Emergencies.
The Governor proposes $2 billion in added payments on state debts and liabilities and an additional $2 billion in deposits into the state’s reserve accounts.
Most of the one time spending is $750 million to decrease homelessness and $250 million for revolving fund loan program on projects to reduce climate change. The state universities receive $417 million in increased ongoing funding and nearly $200 million is dedicated to the MediCal §1115 waiver request.
The LAO questions how much can be achieved with the one time $900 million in funding for better teacher training, recruitment and retention believing this will require a multi year effort. Likewise the LAO questions the $600 million for low performing schools and community schools, believing this too requires a multi-year effort.
The LAO asks whether the 5% increase in base funding for universities should be tied to specific goals of increasing enrollment, improving graduation rates, holding down tuition increases and narrowing student achievement gaps.
The LAO asks several questions about the $750 million increase in funding to combat homelessness: 1) how much can be achieved in one year if it is not sustained, 2) why use newly created regional administrators as opposed to existing cities and counties, and 3) why transfer responsibility from the Business and Housing Agency to the Department of Social Services.
The LAO asks the following questions about the new proposed §1115 waiver: 1) are the new strategies sufficiently tested and piloted to have any confidence in their success, 2) how will the changes interact with the rest of the (unchanged) MediCal program and the other Governor’s initiatives for example on the homeless, and 3) how likely is federal approval of the waiver.
Prepared by: Lucien Wulsin
Dated: 1/21/20