LAO

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Plenty of Nothing

Byuclafaculty

Here is a quote from the governor’s recent budget proposal: “The University of California (UC) will receive an increase of $90 million General Fund for base operating costs, which can be used to address costs related to retirement program contributions.” Question: What does it mean?  Answer: Nothing.  UC has always been free to take its general revenue and put it into the pension fund.  Indeed, since the state has so far refused to resume paying the employer contribution for state-funded employees into the pension fund, that is what UC has been doing. Question: If it means nothing, why are you…

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UC Like a Flea on an Elephant in Latest LAO Budget Report

Byuclafaculty

Maybe the biggest lesson to take away from the Legislative Analyst’s Office latest report on the state budget – responding to the governor’s budget proposal – is that UC is a flea on the back of an elephant.  We are hardly mentioned, other than a reference to possible trigger cuts next year if Governor Brown’s tax initiative isn’t passed by voters. Much of the report focuses on the world of Prop 98, i.e., K-14 schools, not surprisingly since that is such a large chunk of the budget. The LAO is concerned about possible over-optimism in Brown’s budget projections.  Just a…

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LAO seems to really miss CPEC now that it’s gone

Byuclafaculty

As readers of earlier blog posts will know, Governor Brown line-item vetoed CPEC (California Postsecondary Education Commission) out of existence by eliminating its funding in the current year state budget.  CPEC was created to coordinate and evaluate the provision of higher ed in California under the Master Plan – public and private. Now the LAO (Legislative Analyst’s Office) thinks that some kind of replacement for CPEC is needed to monitor higher ed.  LAO seems to want performance standards, much of which deals with flows into and out of higher ed institutions. It is interesting that the state generally, not just…

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LAOmission

Byuclafaculty

Our previous post deals with the Legislative Analyst’s Office (LAO) report on the state budget. Quote from page 41 of the report: “…because the state is not required under current law to contribute additional funds to UC to address its unfunded pension and retiree health liabilities, the forecast assumes no General Fund resources to assist UC for these purposes.”

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It Sure Looks Like the Trigger Is Going to be Pulled

Byuclafaculty

There is an advance report from the Sacramento Bee that the Legislative Analyst later today will be announcing that projections of revenue will fall sufficiently short of assumptions to fire the budget trigger – which further chops the UC budget this year. By itself, just the LAO projection does not fire the trigger but it is part of the mechanism. The LAO report is not yet posted. From the Bee: California would impose $2 billion in mid-year “trigger” cuts next month, mostly through K-12 school reductions, under a new revenue forecast issued this morning by the nonpartisan Legislative Analyst’s Office……

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LAO Report on UC and Other Public Pensions

Byuclafaculty

The Legislative Analyst has just released a report on the governor’s proposal for public pensions. The report states that the “Governor’s Proposal Is a Bold, Excellent Starting Point” and then goes into a detailed analysis. Most of the report is not about UC, although it does note that changing the UC plan might well involve amending the constitution. But it does have a section on UC reproduced below: What About UC? UCRP Also Has a Major Funding Problem. From 1990 to 2010, UC and its employees enjoyed a remarkable two–decade pension funding holiday due principally to (1) substantial overfunding of…

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LAO’s Proposed Path for UC

Byuclafaculty

In the Sacramento Bee’s article on the Regents meeting (see prior post), we find: …No one at the (Regents) meeting raised the possibility that UC might not need to increase spending as much as it has proposed. That view, however, could be found in the Capitol, where budget analysts said they were frustrated by the regents’ conversation. “UC is in effect saying that it plans to spend hundreds of millions of dollars more each year … at a time that inflation is at historic lows, when demographic growth in the college-age population is near zero and when most public agencies…

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On the way to trigger

Byuclafaculty

The Legislative Analyst’s Office (LAO) released the following statement on its most recent projection of California state revenue. Translation: So far, it looks like the budget trigger will be pulled (which means more cuts for UC). Below is the text: Despite today’s weak national employment report for the month of August, preliminary reports from California’s tax agencies on personal and corporate income tax receipts for the month tell a “good news/bad news” story. On the one hand, the tax data indicates that the California economy is continuing to recover from the recession, albeit very sluggishly. This slow recovery is essentially…

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LAO Report on Infrastructure Includes Higher Ed and UC

Byuclafaculty

UCLA’s Westwood Campus under construction in 1927 —————————————————— The Legislative Analyst’s Office (LAO) has issued a report on state spending on infrastructure. Most infrastructure spending goes for programs other than higher ed such as K-12 and transportation. However, the higher ed segment of the report is reproduced below. Some portions of the text are in bold indicating they are of special interest. Note: There are some charts in the original that are not reproduced below. Go to the link at the bottom of this item to see the whole report including the charts. Higher Education California’s public higher education system…