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The Legislative Analyst’s Office will publish shorter, more focused budget analyses over the next few months. In most cases, rather than sending out an announcement for each publication, we will provide periodic updates with the key takeaways from recent pieces. All of our 2023-24 budget analyses to date can be found here.
The 2023-24 Budget: Child Welfare Proposals and Implementation Updates
- Governor’s Budget Proposal for Child Welfare Reflects Net Decrease, Includes One Major New Proposal. The 2023-24 Governor’s Budget includes around $920 million General Fund for child welfare programs under the Department of Social Services (DSS). This represents a net decrease of around $420 million General Fund from the 2022-23 revised budget. The net decrease largely reflects the expiration of one-time and limited-term augmentations provided by recent budgets.
- DSS Has Taken Steps to Begin Implementation of Many New Child Welfare Programs Funded by Recent Budget Acts. DSS has received more than $1 billion General Fund to augment child welfare programs in recent years, comprising mostly one-time funds for new limited-term programs. Some of these major new programs include: building capacity and placement flexibilities for youth with complex care needs, increasing support for family finding and engagement, and developing prevention services.
- Recommend Continuing Oversight and Seeking More Information Around Implementation. To improve oversight of the many new programs, the Legislature could ask the department to report on: why developing guidance and launching new programs requires the amount of time it does, what challenges have arisen and required additional time to address, what any unanticipated obstacles have been, and what programs are achieving in terms of impacts on youth and families.
The 2023-24 Budget: California Community Colleges
- Repurpose Unearned Enrollment Funds and Outreach Funds for Other Priorities. Over the past few years, the state has provided funding for community colleges to grow enrollment. Based on preliminary estimates, districts will not end up earning much of this funding. We recommend the Legislature sweep any unearned growth funds. Given substantial funding remains available for student outreach efforts, we also recommend the Legislature reject the Governor’s proposal to augment funding for this purpose. The Legislature could use the funds freed up from these actions to support other Proposition 98 priorities.
- Treat Governor’s Proposed 8.13 Percent Cost-of-Living Adjustment (COLA) as an Upper Bound. The Governor’s largest proposal for the California Community Colleges (CCC) is $653 million ongoing Proposition 98 General Fund for an apportionment COLA. While districts are facing several costs pressures in 2023-24, and the calculated COLA rate could be even higher at the May Revision, we recommend the Legislature treat the 8.13 percent COLA rate as an upper bound given the state’s budget condition.
- Address Apportionment Issue and Possible Shortfall. CCC’s apportionment formula has a funding protection known as “stability” that is confusing and difficult to understand. The Governor’s budget assumes no district receives stability funding in 2023-24, whereas the Chancellor’s Office estimates the associated cost is $134 million. We recommend the Legislature clarify the statutory provision and adopt a new way to calculate stability funding. In 2023-24, we describe a few options the Legislature has to address the potential shortfall.
- Recommend Partially Funding General Fund Proposals for New Training Center. The Governor proposes $19 million to perform a study and acquire property for a new training center—with estimated future construction costs of roughly $400 million. The Governor also proposes $13 million for the next several years for temporary training facilities and $3 million ongoing for new facility-related staff. We recommend approving funding for the study, but with a revised scope, as well as some funding for temporary training facilities. We recommend rejecting funding for the acquisition phase until the study is complete and for the requested positions since they are not adequately justified.
- Recommend Rejecting Growlersburg Conservation Camp Proposal. The Governor proposes $4.5 million General Fund to restart a previous project to rebuild the Growlersburg Conservation Camp—with estimated total project costs of roughly $100 million. We recommend the Legislature reject the proposal because the state may not need the Growlersburg Conservation Camp, the costs of the project are much higher than anticipated, and the project is not a clear priority for limited resources.
The 2023-24 Budget: Crafting Climate, Resources, and Environmental Budget Solutions
- Governor Proposes $5.8 Billion in General Fund Solutions Across Five Years From Climate, Resources, and Environmental Programs. This includes $5.5 billion in General Fund savings in 2023-24—$3.8 billion from spending reductions, $875 million from reducing General Fund and backfilling with a different fund source (primarily the Greenhouse Gas Reduction Fund), and roughly $800 million from delaying spending to a future year.
- While Important Needs Remain, Identifying Budget Solutions From These Programs Is Appropriate Given Magnitude of Recent Augmentations. A significant focus on reducing these one-time augmentations likely is necessary if the Legislature wants to avoid cutting ongoing programs in this or other policy areas. Through careful prioritization, the state can continue to make significant progress on its climate and environmental goals even at moderately reduced spending levels.
- Governor’s Overall Approach Is Reasonable, but Specific Choices Reflect Administration’s Priorities. The Legislature has numerous options for selecting a different and equally sensible package of choices that achieves roughly the same—or, as may be necessary, an even greater amount—of budget solutions as the Governor’s, but that includes the activities it believes are most important to sustain.
- Recommend Legislature Adopt Package of Budget Solutions Based on Legislative Priorities. In this report we provide the Legislature with a framework and suggestions for how it might modify the Governor’s proposals to better reflect its priorities and prepare to address a potentially larger budget problem.
