Free Republic

Hold the champagne: New contracts may be too costlyState workers looking for good news on contracts recently negotiated by Gov. Jerry Brown's administration won't find it in an internal state memo issued by the Legislative Analyst's Office last week.Because those contracts don't come close to saving the state enough money, the memo says, the deals heighten pressure on the state to cut costs through "hiring freezes, furlough programs, and layoffs." The memo, sent last Wednesday to Senate Republicans, estimates that the contracts would cut costs by only about one-third of the $308 million that Brown projected in his proposed budget.

The plan to sell California state office buildings contained in this year's budget will cost taxpayers $1.4 billion over 35 years, the nonpartisan legislative analyst said Wednesday. The analysis released this week says the state will pay an effective interest rate of 10.2 percent to lease back the parcels, which include 24 separate buildings, from the new owner. That is about double what the state pays on existing bonds used to build its offices. "There are long-run costs and short-term benefits," said Mark Whitaker, who wrote the 12-page analysis for the Joint Legislative Budget Committee. "It's going to cost a...

It’s official. In the Legislative Analyst’s initial eight-page summary of the budget approved by lawmakers in the early hours of the 100th day of the fiscal year it’s supposed to dictate spending for, the conclusion is that the package is unlikely to balance and certainly won’t improve the state’s chronic gap between spending commitments and revenue. “We estimate that well over two-thirds of the Legislature’s 2010-11 budget solutions are one-time or temporary in nature,” the analyst says in the top right-hand corner of Page 2. “This means that California will continue to face sizable annual budget problems in 2011-12 and...

In a four-page review, the nonpartisan Legislative Analyst's Office said today that lawmakers should reject Gov. Arnold Schwarzenegger's proposed ballot measure to dedicate more money to public universities than prisons. "It is an unnecessary, ill-conceived measure that would do serious harm to the budget process," the LAO report concludes. Schwarzenegger's constitutional amendment would require the state to spend no more than 7 percent of general fund money on corrections and no less than 10 percent on the University of California and California State University systems. In 2009-10, the state is spending 5.7 percent of general fund money on UC and...

SACRAMENTO - Not that Gov. Schwarzenegger and state legislators needed any more bad news, but the nonpartisan Legislative Analyst's Office Thursday said the state's budget deficit looks to be more than $24 billion. The governor's Department of Finance just last week had pegged the shortfall at $21.3 billion if a package of budget-related ballot measures went down in Tuesday's election, which they did. The analyst said it calculations indicate the number may be $3 billion higher. In unusually frank language, the analyst also sounded an alarm over a major element of the governor's plan to rebalance the state's budget. A...

The Legislative Analyst's Office has just released its overview of the 2009-10 state budget May Revision. On page 18, it suggests that the Legislature veto the SEIU contract and add a third furlough day each month: The Legislature could direct the administration to score budgetary savings if it chooses not to approve the labor agreements proposed by the Governor with the state employee units . . .

California could face a staggering shortage of cash unless voters and legislators both address the issue before the start of the new fiscal year July 1, the Legislative Analyst's Office said today. In a report called "California's Cash Flow Crisis," the nonpartisan and independent analyst said state government could be faced with having to borrow a record $20 billion at the start of the fiscal year in order to pay its day-to-day bills. The report said failure of budget-balancing measures before voters at the May 19 special election "would increase the state's cash flow pressures substantially - potentially increasing the...

For more than two years, Gov. Arnold Schwarzenegger, leading California Democrats and environmentalists have insisted that AB 32 – a 2006 law requiring California businesses and residents to use cleaner but far more costly sources of energy by 2020 – would actually prove to be an economic bonanza. They asserted it would position the state to lead the world in green technology and reduce societal costs stemming from air pollution. This claim falls apart under the slightest inspection. Sure, some well-positioned industries might thrive. But how could sharply increasing the operating costs of most businesses and reducing the disposable income...

It's kind of hard to be surprised by bad economic and budget news in California these days. After all, there's virtual unanimty that we're in deep you-know-what. And yet, today's full analysis by the Legislature's nonpartisan budget watchers is still shocking... probably for its opinion that the problems stretch across almost every single aspect of state revenues and expenditures. The annual fiscal outlook, the first under newly minted Legislative Analyst Mac Taylor, adds some details to the gloomy projections the LAO released just nine days ago. That projection focused on a $28 billion gap by July 2010. Ready for some...

The Legislative Analyst's Office will release a new report today analyzing the woeful state of California's finances. It will flesh out last week's estimate that the state faces a $27.8 billion deficit over the next 19 months. But a new report from Beacon Economics predicts things will look even glummer in the future: Labor markets are showing increased signs of stress.There is little sign of a recovery in housing, and foreclosure rates are growing worse by the day.Consumer markets have fallen off a cliff.Corporate profits are taking a serious beating. The report commissioned by California Forward, the nonpartisan government reform...

The in-depth analysis of Governor Schwarzenegger's new state budget is out, and the Legislature's non-partisan analyst essentially says the numbers don't add up. Legislative Analyst Elizabeth Hill says that expenditures in 2007-08 would outpace revenues by $2.6 billion. And while there is reserve cash left from the current fiscal year to help soften the blow, Hill projects the governor's plan would still leave the state short by $726 million. That's a far cry from Schwarzenegger's bold statement in January that his budget had wiped out the state's red ink. Beyond that, the LAO report forecasts an even larger deficit in...

Budget analysts, Wall Street bond-raters and state lawmakers are casting doubt on Gov. Arnold Schwarzenegger's claim that his proposed spending plan for next fiscal year could wipe out California's chronic budget deficit. On Friday, the state's nonpartisan legislative analyst blasted Schwarzenegger's plan in unusually forceful terms. "We believe that the fiscal benefits of many of the budget's key proposals are overstated," Legislative Analyst Elizabeth Hill wrote in her annual critique of the spending plan, kicking off months of negotiations in the capital. "While any budget is subject to risks and uncertainties, we believe that the number and magnitude of these...

Abusive tax shelters cost state billions But going after wealthy cheats would be blow to business growth, report saysSACRAMENTO — Cash-starved California collected hundreds of millions of dollars in a special, one-time attack on ever-growing illegal tax shelters used by the rich and corporations but could be raking in billions more, according to a state report released Wednesday. The downside is that a long-term war on the complex, secretive tax strategies — marketed in the thousands by firms and baffling to tax auditors — could hurt business growth in California, which runs counter to the wishes of Gov. Arnold Schwarzenegger's...

SACRAMENTO – Gov. Arnold Schwarzenegger's proposed $125.6 billion state budget moves in the "wrong direction" by using a temporary surge in tax revenue to expand programs rather than pay down debt, Legislative Analyst Liz Hill said yesterday. The nonpartisan analyst said the governor's budget would widen a deficit the state has been struggling with for six years, producing a budget gap of $5 billion to $6 billion next year. "Our concern is that we are expanding spending at a time when we have a significant state budget problem," Hill said. "We would urge using more of the unanticipated revenues to...

Legislative analyst says it will create chronic shortfalls - Sacramento -- Gov. Arnold Schwarzenegger's budget would take the state in the wrong direction because it spends too much of a revenue windfall on expanding programs rather than trying to wipe clean the deficit that California has racked up over the past several years, the state's nonpartisan budget analyst said Thursday. Legislative Analyst Elizabeth Hill warned that much of the revenue surplus that Schwarzenegger plans to spend this election year is from volatile business tax and capital gains tax revenues, which could quickly disappear if the economy softens. Schwarzenegger's plan for...

SACRAMENTO - Gov. Arnold Schwarzenegger's $123 billion budget proposal spends too much of a one-time windfall on new or expanded programs, leading to higher deficits in future years, the state's nonpartisan legislative analyst said Thursday. The review urges lawmakers to consider putting more of an estimated $4 billion in unanticipated income into reserve accounts or use it to pay off existing debts. "The overall plan moves the state in the wrong direction in reaching its longer-term goals of getting its fiscal house in order," said the report from Legislative Analyst Elizabeth Hill. Schwarzenegger released his plan Tuesday, calling it a...

Two members of a civilian border-patrol group similar to the Minuteman Civil Defense Corps were depicted as guilty of murder in tonight's episode of NBC's "Law & Order."

The LAO analysis of the governor's budget initiative from Legislative Analyst Elizabeth Hill is available for review. You can read it HERE.

Offering withering appraisals of key parts of Gov. Arnold Schwarzenegger's schools agenda, the nonpartisan legislative analyst warned Thursday that the governor's plan to change teacher pensions was probably illegal and recommended that lawmakers repeal his first foray into politics, the 2002 initiative expanding after-school programs. Elizabeth G. Hill, whom lawmakers of both parties look to for advice on budget matters, said legal problems with the governor's plan to stop $469 million of teacher retirement payments — leaving schools or teachers to pick up the tab — made it unlikely that the state would save any money. (snip) "We simply suggest...

Last Saturday night brought His Imperial Highness Prince Nguyen Phuc Buu Chanh of Vietnam, Regent of the Imperial Dynasty and President of the Vietnamese Constitutional Monarchist League, to Cornell. The Prince, a member of the Vietnamese imperial family gave a lecture, entitled "Revival of Vietnamese Culture: The Nguyen Dynasty," before a crowd of about 50 people. Maria Nguyen '05, vice president of the Cornell Vietnamese Association sang the American national anthem and then played the national anthem of South Vietnam. Aided by PowerPoint slides, Prince Buu Chanh then began his lecture speaking from a podium draped with the American flag...