LAO

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Cosmetic Adjustments to the State Budget

Byuclafaculty

At the governor’s media conference last Thursday where he presented his budget proposal for 2013-14, some reporters asked about the discrepancy between the proposal – which said that at the end of this year we would have a positive reserve in the general fund – and an earlier estimate by the Legislative Analyst that there would still be a negative reserve.  Basically, the answer – from the budget director (Brown begged off on answering) – was that the governor’s budget involved different assumptions. Actually, the difference between slightly positive ($785 million) and the Leg Analyst’s negative (-$1.9 billion) isn’t all…

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Legislative Analyst Says Everything’s OK With UC Faculty Pay

Byuclafaculty

Legislative Analyst’s summary: In this report, we assess UC’s ability to recruit and retain tenured and tenure-track faculty. We find that (1) UC has been hiring candidates who have received their highest degree from some of the most selective universities in the nation, (2) UC has a long history of hiring its top choice faculty candidates, (3) most new entry-level faculty stay at UC long enough to earn tenure, (4) less than 2 percent of faculty resign from UC each year, and (5) UC’s faculty compensation is competitive with other top universities. These findings indicate that UC generally has been…

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Good News and Bad News

Byuclafaculty

The Legislative Analyst’s Office (LAO) has issued a report on the state budget outlook. The good news is above.  Adding in the effects of Prop 30 (and 39), in the out-years the state begins to run surpluses as shown by the rising positive bars on the right side of the chart above.  Lots of uncertainty, of course, about what might happen to the underlying economy.  It is likely that the governor will be making statements, given the report, about the need for caution. And there is bad news also seen on the chart above on the left side or the…

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Some Handy Comparison Slides of Props 30 & 38

Byuclafaculty

The Legislative Analyst’s Office has some handy comparisons of the governor’s tax initiative (Prop 30) and the rival Munger tax initiative (Prop 38).  “PIT” = personal income tax.  Three slides are below: Prop 30 Prop 38 ($7,316 is not a typo.  Prop 38 starts at a relatively low income hurdle.  A more detailed description that you will be finding in the official ballot pamphlet is: “Increases personal income tax rates on annual earnings over $7,316 using sliding scale from .4% for lowest individual earners to 2.2% for individuals earning over $2.5 million, for twelve years.” Prop 30’s income tax hurdle is much…

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Higher Ed Metrics Bill is Dead on Arrival

Byuclafaculty

On Friday, the governor vetoed SB 721 which would have instructed the Legislative Analyst’s Office (LAO) to come up with “metrics” to determine if the UC, CSU, and the community colleges were meeting three goals.  These goals were described in a section of the bill: In order to promote the state’s competitive economic position and quality of civic life, it is necessary to increase the level of educational attainment of California’s adult population to meet the state’s civic and workforce needs. To achieve that objective, it is the intent of the Legislature that budget and policy decisions regarding postsecondary education…

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LAO Needs to Join Governor & Legislature on the UC Pension Train

Byuclafaculty

The Legislative Analyst’s Office (LAO) yesterday issued a review of the 2012-13 state budget enacted last June.  At one time, LAO asserted that the state had no responsibility for the UC pension plan.  The language on page 19 describing the treatment of the pension this time around is more constrained and does not venture a legal opinion.  That’s progress but LAO is still not where it needs to be.  Here is what it said on the UC pension: Provides Augmentation for UC Pension Costs.  The $89 million augmentation for UC’s pension costs represents the first time in more than two…

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The UC Budget in the May Revise: Allusion Leads to Illusion

Byuclafaculty

The Legislative Analyst has released a summary of its recommendations regarding UC and CSU reflecting the governor’s May Revise budget proposal.  Below, in italics are excerpts related to pension funding for UC. As noted in prior blog posts, in January, the governor designated a sum of $90 million which he said could be used (or not) for UC pension funding.  The problem with that approach is that UC has always been free to allocate what it gets from the state for the pension.  By alluding to use for the pension, the governor triggered a recommendation from the Leg Analyst that…

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LAO Report on the May Revise: UC Barely Exists

Byuclafaculty

The Legislative Analyst has issued its evaluation of the governor’s May Revise budget proposal. There is little of direct UC interest in the text. On the other hand, one would be hard put to find anything that would encourage the legislataure to “buy out” a tuition increase as the Regents wanted at their recent meeting.  There is nothing about UC pension obligations.  There might be a bit of relief for Cal Grant students at UC but even if so, the relief would come in future years. The LAO has suggestions for reframing parts of the budget which might free up…

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Legislative Analyst Forecasts Less Revenue than Governor

Byuclafaculty

The Legislative Analyst has issued a new report on the outlook for state revenue.  It is less optimistic than the forecast contained in the governor’s budget proposal of January. Both the LAO and the governor assume that the governor’s tax measure slated for the November ballot will pass.  Forecasting involves much uncertainty and in the case of budgeting, the economic forecast must be linked to specific taxes, another possible source of error.  Nonetheless, ultimately the legislature has to go with some forecast and, as we saw last June, it can assume phantom revenue and pass a budget on that basis…

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LAO Report on Higher Ed Contains Significant Pension Recommendations

Byuclafaculty

The state’s Legislative Analyst has released a lengthy report on funding higher education which covers UC, CSU, and the community colleges (as well as CalGrants).  The report is essentially a response to the governor’s January budget proposal with regard to higher ed. Generally, the report tends to disagree with the governor’s approach which the Legislative Analyst views as giving too much autonomy to UC and the other segments with regard to enrollment and other matters.  On the other hand, it documents the trend towards reduced state funding and thus seems to continue the pay-less/say-more approach which is odd on its…