Unaddressed Challenges in the 2013-14 California Revised Budget California’s 2013-14 May revised budget (released earlier this week) presents an uncertain and cautious fiscal outlook for California. For instance, discussing the state’s lack of budgeting flexibility following the release, Governor Jerry Brown told reporters, "Anyone who thinks there's spare change around here, they haven’t read the budget." The revised version 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, for the most part, the budget stops at acknowledging these issues and presents no plans of action for addressing them.

For California Pensions, Math is Already at Work This op-ed appeared on Fox & Hounds Daily on May 10, 2013. Last week, in this forum, Lou Paulson argued that the pension debate in California should be more concerned with math and less with politics. I completely agree, which is why I was perplexed after reading his op-ed. Among other things, he argues that California’s state and local governments should not fully fund pension plans for their employees. When he actually uses math or data to justify his arguments, his conclusions are largely incorrect or misleading.

Viewpoints: California has options for securing retiree health benefits This op-ed appeared in the April 30, 2013 edition of the Sacramento Bee. California Common Sense released a report this month showing a 45 percent increase in retiree health spending for state employees over the last five years, growth from $1.3 billion in 2008 to an estimated $1.8 billion in 2013. While funding for higher education, K-12, parks, courts, transportation and welfare have all suffered significant cuts, this part of the budget is rare for its consistent increase in funding. This is rapid growth for any budget area, especially when revenue grew only 4.5 percent over that same period.

Paving a Way Out: Options for Managing California’s Rising Retirement Healthcare Costs Rising retiree healthcare costs is one of the emerging problems that state and local governments face nationwide. The true costs of providing promised healthcare and other non-pension benefits to retirees became clear when the Governmental Accounting Standards Board (GASB) mandated public disclosure of these costs and liabilities in fiscal year 2008. Since then, policy makers have gradually shifted their attention toward limiting this cost growth. Still, growing liabilities and annual out-of-pocket costs now exert increasing strain on government budgets. Includes summary video.

Demystifying Education Finance in California California’s education finance system has evolved in often unpredictable ways over the last half-century. Understanding how the bulk of 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 – is vital to recognizing how the state can effectively educate the nation’s largest and most diverse student population going forward.

Case Study: City of Los Angeles’s Pension Slide, 2002-03 vs 2012-13 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, including a $222 million budget deficit for the current fiscal year and a forecasted $427 million deficit for fiscal year 2014-15. City leaders have raised concerns the city’s financial difficulties and observers have warned of potential bankruptcy.

Case Study: California’s Budget Transformation, 2007-08 to 2013-14 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. While both the 2013-14 and 2007-08 proposed budgets purported to be balanced, their overall compositions are quite different. Since 2007-08, some budget areas have fared much better than others, and some much worse.