Typically, when public employees retire, they receive these healthcare benefits for the rest of their lives, or until they are eligible for Medicare (see Appendix A for background). These newly updated figures reveal billions of dollars in chronically underfunded OPEB liabilities. Yet, OPEBs have not received nearly the same scrutiny or sense of urgency as their pension benefit counterparts.
To ensure that money is available to pay for California teachers' future pension benefits, the CalSTRS pension system accumulates contributions into a trust fund. Officially, CalSTRS has only 63% of the assets it needs to provide current and future retirement benefits, leaving the system with an $80.4 billion funding shortfall (market value).
The California State Legislature recently adjourned while leaving the California State Teachers’ Retirement System’s (CalSTRS) major $71 billion funding shortfall unresolved. Until now, failing to address the shortfall has delayed some short-term budget strains but ironically made California’s K-12 education system far more vulnerable to severe cuts in both the near and long-term future.
Governor Jerry Brown signed a bill into law that will increase California's minimum wage from $8/hr to $10/hr by 2016. In 2012, among the nation’s 75.3 million hourly paid workers, 3.6 million (4.7%) were paid at or below the federal minimum nationally. In California, 1.4% of its 127,000 hourly paid workers earn the minimum wage. Click "Learn More" to read the one-pager.
The U.S. Department of Health and Human Services recently released the initial data outlining the number of individuals who have enrolled in health insurance plans through these exchanges during the first month of open enrollment. According to the official figures, only 106,185 individuals enrolled in a health plan through the exchanges nationwide between October 1 and November 2.
Approximately 47 million Americans receive food stamp supplements from the federal government. Federal food stamp spending increased from $15 billion in 2001 to $80 billion this year. Through the 2009 American Recovery and Reinvestment Act (aka the 2009 federal stimulus), Congress increased food stamp funding by nearly 14%.
Oakland ranks among the nation’s most dangerous cities, is often cited as a potential candidate for bankruptcy, has a crumbling transportation infrastructure, and is still recovering from the Great Recession. In response, Oakland has taken on debt, cut expenses with layoffs and furloughs, and pursued different policing strategies. Click "Learn More" to read the overview.
The Bay Area Rapid Transit (BART) system is one of California’s largest public transit operators. BART's overall annual retirement costs nearly quadrupled from 2000 to today, growing from $13.1 million to $58.0 million. Retirement benefits grew from 3.3% of BART’s operating budget in 2000 to 8.0% of its operating budget today.
In 2022, it's projected that federal, state, and local governments will fund nearly half of national health care expenditures. In 1987, governments funded only 32% of health spending nationwide. The federal government will bear most of this shift to government spending, with its share increasing 14 percentage points between 1987 and 2022. Click "Learn More" to watch the video.
In 2012, 55% of Americans received healthcare through employer-sponsored health insurance. The Milliman Medical Index (MMI), which tracks the annual cost of healthcare for a typical family of four, was $22,030 in 2013. This 117% increase is more than twice the $10,168 cost for a typical family of four’s healthcare in 2003, just a decade ago.
When rising costs exert pressure on government budgets, it is not unusual for citizens to pay higher fees and fines to provide additional revenue. In California, rising traffic violation fines reflect this trend. Statewide, running a red light for the first time results in a $100 traffic ticket. These days, however, a $100 ticket actually amounts to nearly $500.
By enrollment, Medi-Cal is the nation’s largest Medicaid program. In 2012, it covered 7.6 million people, or more than a fifth of the state’s population. As the second largest portion of the state budget and as one of the budget’s fastest growing expenses, Medi-Cal has historically been a primary target for cost containment.
Gov. Jerry Brown will likely sign AB 484, a measure that would effectively suspending data collection on K-12 student achievement for the current school year as the state transitions to the Common Core curriculum. The effort doesn't consider that there are other crucial changes taking place in California's education system. At this time of major change, a year without this data is unacceptable.
Governor Brown proposes to alter the way the state distributes funding to K-12 schools, providing more funding to districts and charter schools with higher proportions of English-learners and low-income students a district has. The new formula would shift an additional 3% of total state funding to relatively high-need districts and charter schools.
Analysis of the city of Los Angeles’s pension system – the growth of the city’s pension expenses, the causes of the growth, and the challenges the city faces in handling their pension problems. The city faces year-after-year deficits, and its leaders have raised concerns about the city’s financial difficulties as observers have warned of potential bankruptcy.
Since 2007-08, the California budget’s composition has changed significantly. As some programs’ share grew significantly, others’ shrank significantly. Long- and short-term cost burdens have intensified in several key areas – health care, employee retirement costs, employee compensation, and state borrowing. Consequently, these cost pressures have forced budget cuts to services.
On June 10, Gov. Brown and members of the CA Senate and Assembly reached a compromise altering K-12 finance system. CA's Department of Finance has released its projection data for how the new finance system, called the Local Control Funding Formula (LCFF), would distribute funding to each district throughout the state. Click "Learn More" to explore the map and compare how funding would change.
Rising healthcare costs for retired public employees is an emerging problem state and local governments face nationwide. In 2008, California spent $1.3 billion on retiree healthcare and will spend an estimated $1.8 billion in 2013, amounting to average annual growth of 7.7%. This 45% overall growth came at a time when total state spending grew by only 3%. Click "Learn More" to see the video.
CA's 2013-14 May revised budget presents an uncertain and cautious fiscal outlook for California. It acknowledges some of the major structural challenges facing the state today and in coming years – rising health costs, unfunded pension and retiree healthcare liabilities. However, the budget largely stops at acknowledging these issues and presents no plans of action for addressing them.
California’s education finance system has evolved in often unpredictable ways over the last half-century. This piece briefly explains how financial responsibility for the K-12 system has shifted from local governments to the state and how this shift has been at the root of many of California’s greatest educational challenges.
The budget process relies heavily on the Department of Finance's (DOF) series of budget projections for the coming year, shaping the Governor’s budget and framing the larger debate surrounding it. Therefore, when inaccurate projections shape the budget, the discourse surrounding it becomes farther removed from reality.
On January 10, 2013, Governor Brown presented a balanced budget for the coming fiscal year, which will begin on July 1. No proposed budget had purported to be balanced since Governor Schwarzenegger’s 2007-08 budget, which he presented in January 2007. Since 2007-08, some budget areas have fared much better than others, and some much worse.
This report examines the $220 million in independent expenditures spent on candidate races in California between 2000 and late May 2012, focusing on the 106 organizations and committees that spent all but $25 million of it. We dissected the races that attracted the most money, the groups who spent it, and their donors.
While several factors are responsible for the 1327% increase in CDCR’s budget in just three decades, the state inmate population has been a key driver, expanding rapidly since 1980 and spurring a prison overcrowding crisis in California. Facing a 2013 court-mandated deadline, the State has worked to redistribute its overall prison population among state prisons and county jails.
NBC Bay Area News featured this original research from CACS. Among discretionary spending, two major areas have experienced very different treatment, particularly during recessions. As state support for higher education has lagged over the years, spending on state prisons has soared. To read the report and see the video, click "Learn More" below.
Together, California’s 20 largest cities (by budget) currently have already promised $16 billion in non-pension benefits to their current and future retirees, and $12 billion of that remains unfunded. These non-pension benefits, or Other Post-Employment Benefits (OPEBs), largely consist of retiree health care.
Over the last decade, state funding for the UCs has dropped from 27% to 11% of the UCs budget. Because total costs have not decreased, more money is coming from tuition and medical schools. Additionally, the UCs now spend more on administrator salaries and new construction, but spend proportionally less on professors' salaries. Click "Learn More" to access the full report and summary.
Much attention, in both policy research and broader political circles, has been paid to California’s statewide pensions systems. But virtually no systematic analysis of the state’s independent pension plans has been performed, though they collectively hold more than $150 billion in assets. Click "Learn More" to access the full report and executive summary.
In February 2012, Stockton, California voted to enter bankruptcy mediation. Stockton is one of California’s 20 largest cities, and its bankruptcy would be the nation’s largest in history. Its story highlights the pressures on local governments in the aftermath of the 2007 recession and the looming threat of further bankruptcies. Click "Learn More" to access the full report and summary.
In 2008, the citizens of California voted to authorize the state government to borrow $9.95 billion in order to build California’s first high-speed rail system (CA HSR). In this article, we explain how the State – under the auspices of the California High Speed Rail Authority (CHSRA) employing project management firm Parsons Brinckerhoff – has strayed from this original plan.
- Who We Are
- Retiree Healthcare
- Shrinking Police Forces
- State Migration DataViz
- CalSTRS Op-Ed
- CA Budget Op-Ed
- Teachers' Pensions
- Minimum Wage
- Health Exchanges
- Food Stamps
- Oakland's Woes
- Paying for Health Care
- U.S. Family Budgets
- Traffic Tickets
- California Medicaid
- K-12 Testing Data
- K-12 Funding Reform
- Open Public Data
- LA Pensions & Budget
- Final Budget Case Study
- K-12 Funding Map
- Retiree Health 2013
- May Budget Overview
- K-12 Finance
- Revenue Projections
- Budget Case Study
- Proposition Spending
- Indep. Expenditures
- Prison Realignment
- Corrections & Higher Ed
- CACS on Huffington Post
- State Retiree Health Care
- Local Retiree Benefits
- UC Management Growth
- CA Pension Systems
- Stockton's Bankruptcy
- High-Speed Rail
- Pension Timeline