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Cal Facts: 2014

Legislative Analyst's Office · lao-3154 · Report · 2014-12-04

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CCAALL FFAACCTTSS2014 Mac Taylor LEGISLATIVE ANALYST CCAALL FFAACCTTSS MAC TAYLOR DECEMBER2014 LEGISLATIVE ANALYST CAL FACTS DECEMBER 2014 DECEMBER 2014 i With a state as big, as populous, and as complex as California, it would be impossible to quickly summarize how its economy or state budget works. The purpose of Cal Facts is more modest. By providing various "snapshot" pieces of information, we hope to provide the reader with a broad overview of public finance and program trends in the state. Cal Facts consists of a series of charts and tables which address questions frequently asked of our office. We hope the reader will find it to be a handy and helpful document. Mac Taylor Legislative Analyst ii L a ’ O s egisLative naLyst s ffice taff Legislative Analyst Mac Taylor State and Local Finance Education Jason Sisney Jennifer Kuhn Marianne O'Malley Edgar Cabral Chas Alamo Carolyn Chu Justin Garosi Natasha Collins Seth Kerstein Jason Constantouros Ryan Miller Rachel Ehlers Nick Schroeder Paul Golaszewski Brian Uhler Judy Heiman Brian Weatherford Kenneth Kapphahn Jameel Naqvi Corrections, Transportation, and Environment Health and Human Services Anthony Simbol Mark Newton Brian Brown Shawn Martin Drew Soderborg Amber Didier Ashley Ames Rashi Kesarwani Ross Brown Lourdes Morales Virginia Early Ginni Bella Navarre Aaron Edwards Felix Su Anton Favorini-Csorba Ryan Woolsey Jeremy Fraysse James Hacker Helen Kerstein Sarah Larson Anita Lee Administration and Jessica Peters Information Services Larry Castro Support Sarah Kleinberg Tina McGee Karry Dennis-Fowler Izet Arriaga Michael Greer Sarah Scanlon Vu Chu Douglas Dixon Jim Stahley Sandi Harvey Anthony Lucero iii c Ontents IntroductIon .....................................................i LAo StAff ......................................................ii cALIfornIA'S Economy ......................................1 StAtE And LocAL fInAncE ...............................12 ProgrAm trEndS K-12 ...............................................................30 HigHer education ............................................42 Human ServiceS ...............................................47 HealtH ............................................................52 criminal JuStice .............................................60 reSourceS .....................................................64 tranSportation ................................................67 otHer programS .............................................70 iv Graphic Sign Off California’s EConomy Secretary 1 Analyst MPA California's Economy Is Eighth-Largest in the World Deputy 2013 Gross Domestic Product (In Trillions) United States (excluding California) China Japan Germany France United Kingdom Brazil California Russia Italy 5 10 $15  California’s gross domestic product (GDP)—the value of goods and services produced here—totaled $2.2 trillion in 2013.  With 34 percent of the population, the Los Angeles/ Orange County region produces 36 percent of California’s economic output. With only 17 percent of the population, the Bay Area produces 25 percent of the state’s output. ARTWORK # CF_140496  The GDP of Texas, the next-largest state economy, was $1.5 trillion. Template_CalFACTS.ait Graphic Sign Off California’s EConomy Secretary 2 Analyst MPA California's Job Mix Deputy Similar to the U.S. in Many Sectors (Nonfarm Jobs) Percentage of Percentage of California Jobs U.S. Jobs California and the U.S.: Sectors With Equal Shares of Jobs Retail and wholesale trade 15 15 Health care and social assistance 13 13 Food services and hotels 9 9 Construction 4 4 Federal government 2 2 Sectors In Which California Has Larger Share of Jobs Professional/business services and informationa 19 16 Local government 11 10 Sectors In Which California Has Smaller Share of Jobs Manufacturing 8 9 Finance, insurance, and real estate 5 6 Transportation and utilities 3 4 State government 3 4 a Includes most technology and entertainment industry jobs, among others in this category. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary California’s EConomy 3 Analyst MPA California Firms Get Large Deputy Share of Venture Capital Funding (In Billions) $20 18 California 16 Rest of the U.S. 14 12 10 8 6 4 2 1995 2000 2005 2010 2013  Venture capital provides investment funding for new technology firms that may not have access to conventional bank loans. Historically, the level of this funding has affected job growth in California’s technology industries.  In many recent years, venture capital funding to California firms often has equaled or exceeded that for firms in the other 49 states combined. Overwhelmingly, this funding goes to firms in the Bay Area. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary California’s EConomy 4 Analyst MPA International Trade Is Deputy Important to California's Economy 2013 International Goods Exportsa (In Billions) California Exports by Destination European Union China Mexico Canada Japan South Korea Taiwan Other 10 20 30 40 $50 California Exports by Product Computers and Electronics Vehicles and Machinery Agriculture, Food, and Beverages Chemicals and Pharmaceuticals Other 10 20 30 40 $50 a Excludes exports of services. Nationwide, services account for about 30 percent of total exports. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary California’s EConomy Analyst 5 MPA Milk Is California's Deputy Top Farm Commodity Top 10 Commodities by Billions in Sales, 2012 Milk Grapes Almonds Cattle Nursery/Greenhouse Strawberries Hay Lettuce Walnuts Tomatoes 1 2 3 4 5 6 $7  California is the nation’s leading farm state. Its farm commodities generated $45 billion of sales in 2012—far surpassing the $32 billion generated by farms in Iowa (the second-ranked state). Milk is, by far, California’s top farm commodity.  Across the U.S. and around the world, consumers often eat agricultural products that are almost exclusively California grown. For example, California accounts for about 99 percent of U.S. production of almonds and walnuts. Almonds are the state's leading agricultural export. ARTWORK # CF_140496  In 2012, the top five counties by sales volume of farm commodities were Fresno, Kern, Tulare, Monterey, and Merced. Template_CalFACTS.ait CALIFORNIA’S ECONOMY 6 Poverty Much Higher in California Under Alternative Measure Percentage of Population Living Below Poverty Threshold From 2011 Through 2013 25% 23.4% California Rest of U.S. 20 16% 15 14.8% 14.8% 10 5 Official Poverty Measure Research Supplemental Poverty Measure  The Official Poverty Measure (OPM) defines a family as poor if their pretax cash income is less than a poverty threshold that is standard across the continental U.S.  In contrast, the Research Supplemental Poverty Measure (SPM) accounts for forms of public assistance not included in the OPM and adjusts poverty thresholds for a number of factors, such as the cost of housing.  From 2011 through 2013, California’s OPM poverty rate was somewhat higher than in the rest of the U.S. California’s SPM poverty rate—at 23.4 percent—was ARTWORK # CF_140496 much higher than in the rest of the U.S., primarily due to the state’s higher housing costs. This rate is equivalent to about 9 million Californians being considered poor. Template_CalFACTS.ait Graphic Sign Off Secretary California’s EConomy Analyst 7 MPA Deputy Incomes Higher in California Than U.S., and More Spread Out $176,800 90th Percentile $150,000 90th Percentile $60,000 Median $52,000 Median $13,200 $12,000 10th Percentile 10th Percentile California United States  In 2013, median household income in California was $60,000, compared to $52,000 for the nation as a whole. As shown above, the gap between high- income households (for example, the 90th percentile of households by income) and very low-income households (such as those at the 10th percentile) is greater in California than in the U.S. as a whole. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary Analyst California’s EConomy 8 MPA Deputy California Home Prices Rising Again Estimated Median Home Price (In Thousands) $600 500 400 California 300 200 United States 100 2002 2004 2006 2008 2010 2012 2014  In California, 2013 was the first year since 2006 in which home prices increased significantly.  The median home price in California has continued to rise in recent months, reaching $431,400 by September 2014. This was roughly the same as it was ten years ago in 2004. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off California’s EConomy Secretary 9 AGnraalypsht ic Sign Off Californians Spend MPA Secretary More of Their Income on Housing Deputy Analyst Share of Household Income Spent on Housing, 2013 MPA Deputy Los Angeles San Diego Riverside-San Bernardino Santa Ana-Anaheim Los Angeles Fresno San Diego Oakland Riverside-San Bernardino Sacramento Santa Ana-Anaheim Bakersfield Fresno San Francisco Oakland San Jose Sacramento Other States' Metro Areas Bakersfield San Francisco20 22 24 26 28 30% San Jose HoOtuhesr Sitnategs' MCetoro sArtesas Have 2G0%rown Faster T2h0an 2I2nco2m4 es26 28 30% 1T5otal Inflation-Adjusted Change Since 2002 Housing Costs 10 20% 5 15 Housing Costs 10 Median -5 Household Income 5 -10 2002 2004 2006 2008 2010 2012 Median -5 Household Income -10 2002 2004 2006 2008 2010 2012 ARTWORK # CF_140496 ARTWORK # CF_140496 Template_CalFACTS.ait Template_CalFACTS.ait Graphic Sign Off Secretary Analyst California’s EConomy 10 MPA Deputy Great Recession: More Lost Jobs, Longer Recovery Than Past Downturns 0% -2 -4 -6 Percent Change in California Jobs Since Beginning of: -8 1990-1991 Recession 2001 Recession 2007-2009 Recession -10 1 2 3 4 5 6 7 Number of Years Since Start of Recession  California lost 1.3 million net jobs between July 2007 and early 2010. These job losses were much bigger than those of recent recessions. Also, the time it took California to recover the lost jobs—nearly seven years—was much longer.  California’s population and labor force have grown since the Great Recession began. Therefore, even with the job recovery described above, the state’s unemployment rate as of August 2014 (7.4 percent) remained above pre-recession levels. In late 2006, before the recession, California’s unemployment rate fell as low as 4.8 percent. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary Analyst California’s EConomy 11 MPA Deputy California's Changing Population Rapid Elderly Population Growth... 70% 60 50 40 30 20 10 -10 0-17 18-24 25-44 45-64 65-74 75+ LAO Projected Growth by Age Group, 2010-2020 ...And a New Hispanic Plurality Percent of California Population (LAO Estimates) ARTWORK # CF_140496 2010 2020 Hispanics 38% 39% Whites 40 38 Asian-American 13 14 African-American 6 6 Template_CalFACTS.ait Other 3 4 Graphic Sign Off Secretary Analyst State and LocaL Finance MPA 12 Deputy California Governments Rely... STATE LOCAL Tax Rate Revenue Tax Rate Revenue 1% of assessed value, Marginal rates of Personal Income Property plus rate for 1% to 13.3% voter-approved debt Sales and Use: Sales and Use: General Purpose 4.19% Levied Statewide 1.25% State Rate for 2.06% Levied Locally 0.94% (average) Local Programs 8.84% of Commonly, 5% of Corporation California Utility utility charges net income 36¢ per gallon Commonly, 10% of Fuel Hotel of gasoline hotel charges 2.35% of A flat amount or based Insurance Business gross premiums on business’ gross receipts Vehicle 0.65% of Typically 0.11% of Property Transfer License Fee depreciated value transferred property value Cigarettes 87¢ per pack Amount of Revenue Raised $10 billion Varies−20¢/gallon for $1billion Alcoholic Beverage beer and wine to $6.60/gallon for spirits Amount of Revenue Raised $10 billion $1 billion ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary Analyst State and LocaL Finance MPA 13 Deputy ...On a Variety of Taxes STATE LOCAL Tax Rate Revenue Tax Rate Revenue 1% of assessed value, Marginal rates of Personal Income Property plus rate for 1% to 13.3% voter-approved debt Sales and Use: Sales and Use: General Purpose 4.19% Levied Statewide 1.25% State Rate for 2.06% Levied Locally 0.94% (average) Local Programs 8.84% of Commonly, 5% of Corporation California Utility utility charges net income 36¢ per gallon Commonly, 10% of Fuel Hotel of gasoline hotel charges 2.35% of A flat amount or based Insurance Business gross premiums on business’ gross receipts Vehicle 0.65% of Typically 0.11% of Property Transfer License Fee depreciated value transferred property value Cigarettes 87¢ per pack Amount of Revenue Raised $10 billion Varies−20¢/gallon for $1billion Alcoholic Beverage beer and wine to $6.60/gallon for spirits Amount of Revenue Raised $10 billion $1 billion ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary 14 State and LocaL Finance Analyst MPA Personal Income Tax Is the Deputy Dominant State Revenue Source All General Fund Revenues 70% 60 Personal Income Tax 50 Sales Tax 40 30 20 Corporation Tax 10 1950-51 1960-61 1970-71 1980-81 1990-91 2000-01 2010-11 Note: Excludes transfers and bond proceeds.  Over the past several decades, the personal income tax (PIT) has replaced the sales tax as the predominant source of General Fund revenue.  The increase in the PIT is due to growth in real incomes,A thReT sWtatOe’sR pKro g#r eCssFiv_e1 t4ax0 4st9ru6cture, and increased capital gains.  The decline in the sales tax is largely due to an increase in spending on services, which generally are untaxed. Prices of taxable goods have increased little in recent decades. InT eamddpitiloant,e th_eC paolrFtAioCn TofS s.aaliets tax revenues that are deposited outside of the General Fund has increased. Graphic Sign Off Secretary State and LocaL Finance 15 Analyst MPA Personal Income Tax Much Deputy More Volatile Than Economy Percent Change From Prior Year 40% 30 Personal Income Tax 20 10 0 Personal Income -10 -20 -30 95-96 97-98 99-00 01-02 03-04 05-06 07-08 09-10 11-12 13-14  Personal income is a broad measure of economic activity in California. It measures wages and salaries and various other types of income, but it excludes capital gains (income resulting from sales of assets, such as stocks and homes).  Personal income taxes are the largest state revenue source. As shown above, these taxes are much ARTWORK # CF_140496 more volatile than statewide personal income. This is partly because California taxes capital gains, which are especially volatile and mainly go to high-income taxpayers who pay the highest tax rates. These taxpayers’ other income also tends to be volatile. Template_CalFACTS.ait State and LocaL Finance Graphic Sign Off 16 Secretary Analyst Top 1 Percent of Income Earners MPA Paid Half of Income Taxes in 2012 Deputy Top 1 Percent Share of: Personal Income Tax Payments 60% Income 50 40 30 20 10 1995 1997 1999 2001 2003 2005 2007 2009 2011  The share of California’s personal income tax (PIT) paid from the 1 percent of PIT returns with the most income is highly volatile—driven by rises and falls in stock and other asset prices.  In 2012, the top 1 percent of PIT return filers paid a higher share of these income taxes than in any other recent year—just over 50 percent. Proposition 30 took effect in 2012 and temporarily raises PIT rates for these filers.  Overall, tAheR PTITW pOroRvidKe s# a CroFun_d1 t4w0o4-th9ir6ds of state General Fund revenues. As such, income fluctuations among the top 1 percent can cause state revenues to rise or fall by billions of dollars each year. Template_CalFACTS.ait Graphic Sign Off Secretary Analyst State and LocaL Finance 17 MPA Deputy Corporation Tax Liability As Percent of Profits Has Declined 12% Corporate Tax Rate 10 8 6 Taxes Paid as Percent of Profits 4 2 1950 1960 1970 1980 1990 2000 2010  Using various provisions of state tax law, such as tax credits, corporations may reduce their tax liability. This can result in the firms’ final tax liabilities—as a percent of their California profits—being less than the main 8.84 percent corporate tax rate in state law.  The state has made various major changes in corporate tax law in recent decades. These include expansions of some tax credits and other changes. Such changes have contributed to a sharp decline in corporation tax liabilities as a percent of profits. In prior decades, these tax liabilities were closely linked with the state tax rate. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off 18 State and LocaL Finance Secretary Analyst Sales and Use Taxes MPA Levied for State and Local Purposes Deputy Average 8.44% Statewide Rate Optional local rates 0.94% (statewide average) Local rates City and county operations (1%a) and county 1.25 transportation (0.25%) Public safety 0.50 (Proposition 172, 1993) Health and human services 0.50 State rates for programs (1991 realignment) local programs Criminal justice programs 1.06 (2011 realignment) 0.25 Temporary rate (Proposition 30, 2012) State general purpose rates 3.94 General Fund (baseline) a Until the state pays off its deficit-financing bonds in mid-2015, the city and county operations rate is 0.75%, with the remaining 0.25% dedicated to state deficit financing bond payments. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary State and LocaL Finance Analyst 19 MPA Deputy Consumers Are Spending a Declining Share of Income on Taxable Goods 55% 50 45 40 35 30 25 1970 1975 1980 1985 1990 1995 2000 2005 2010  Since 1970, the state’s sales tax base, “taxable sales,” has grown 6.3 percent per year, while personal income—the total income earned by businesses and individuals in California—has grown 7 percent per year. Californians are spending more of their income on housing, health care, and other services not subject to the sales tax.  Total state and local sales tax revenue has grown ARTWORK # CF_140496 7.4 percent per year since 1970. Revenue growth has outpaced taxable sales growth because the average sales tax rate has increased from 5 percent to 8.4 percent. Template_CalFACTS.ait State and LocaL Finance 20 Ballot Measures Have Had Major State-Local Fiscal Implications Proposition (Year) Key Provisions 13 (1978) Limits property tax rates and assessment increases. Requires two-thirds vote of Legislature for state taxes and two-thirds voter approval for certain local taxes. 4 (1979) Sets annual state and local spending caps. Requires state to reimburse local governments for some state mandates. 98 (1988) Establishes minimum funding requirement for schools and community colleges. 172 (1993) Imposes half-cent sales tax for local public safety programs. 218 (1996) Limits local government authority to impose certain taxes, fees, and assessments. 39 (2000) Lowers voter approval requirements to 55 percent for certain local school bonds. 1A (2004) Restricts state from reducing local property tax, sales tax, and vehicle license fee revenues. 22 (2010) Reduces state’s authority to use or redirect state fuel and local property taxes 25 (2010) Lowers Legislature’s vote requirement for state budget to a simple majority. 26 (2010) Broadens definition of taxes to include some additional fees and charges. 30 (2012) Temporary state tax increases. Guarantees certain funding for 2011 local realignment. 2 (2014) Sets new rules for state and school budget reserves and debt payments. Graphic Sign Off Secretary Analyst State and LocaL Finance 21 MPA Deputy Key State Budget Provisions of Proposition 2 (2014) June Budget Act: Annual Set-Aside Amounts 1.5% of General Fund Above-average capital revenues for upcoming gains revenues. fiscal year. Less amounts required to be spent on K-14 education. 50% 50% Rainy-Day Fund Debt (cid:127) Fill to 10% of General (cid:127) Pay down retirement Fund taxes. and certain budgetary liabilities. (cid:127) Can suspend or reduce in “budget emergency,” defined as: Natural disaster; or Inability to keep spending at highest level of past three years, adjusted for inflation and population. Withdrawals (cid:127) Up to amount necessary to address budget emergency. (cid:127) No more than 50% of balance in first year of budget emergency. Note: Excludes provisions likely inactive for next few years, such as state reserve for schools. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off State and LocaL Finance Secretary 22 Analyst State Spending Relatively Flat as MPA Share of Economy Since Late 1970s Deputy General Fund and Special Funds As Percent of Personal Income 9% 8 7 6 5 4 3 2 1 1950-51 1960-61 1970-71 1980-81 1990-91 2000-01 2010-11  State spending as a percent of personal income increased steadily from the late 1950s through the mid-1970s. Since the late 1970s, spending generally has ranged between 7 percent and 8 percent of personal income. (Personal income is one broad measure of the overall size of the California economy.)  By a different measure—adjusted for inflation and population growth—spending generally grew steadily throughout the period displayed. By this measure, spending A tr R ipl T ed W ov O er R th K e s # ec C on F d _ ha 1 lf 4 o 0 f t 4 he 9 2 6 0th century, but is now about the same as it was in 2000. Template_CalFACTS.ait Graphic Sign Off Secretary State and LocaL Finance Analyst 23 MPA Education Makes Up Over Deputy Half of $108 Billion State Budget 2014-15 General Fund Medi-Cala Other Health and Social Services K-12 Education Other Corrections and Criminal Justice Higher Education a Includes local assistance portion of Medi-Cal spending.  Funding for school districts, community colleges, and universities makes up $58 billion of the state’s $108 billion General Fund budget in 2014-15. Health and human services spending, including that for the Medi-Cal Program, totals $30 billion.  $78 billioAn RofT thWe O20R14K-15 # b uCdgFe_t—17420 p4e9rc6ent of the total—was paid to local governments, such as school districts and counties. State personnel costs, excluding university employees, accounted for about 13 percent of the budget. Template_CalFACTS.ait Graphic Sign Off Secretary Analyst MPA State and LocaL Finance Deputy 24 Universities Represent One-Third of State Government Jobs University Other of California California State University California Highway Patrol Corrections and Rehabilitation State Hospital Transportation  In 2013-14, the state employed about 354,000 full-time staff at a salary cost of roughly $26 billion (all funds).  The state long has had many positions that are authorized but not filled. The current vacancy rate across sAtaRte TdeWpaOrtmReKn ts# i sC aFbo_u1t 4130 p4e9rc6ent.  Over the past 30 years, state employment has averaged 9.0 state employees per 1,000 population. In 2013-14, there were about 9.3 employees per 1,000 population. On this basis, California ranked 46th amonTge tmhep sltaattees_ iCn a2l0F1A2C. TS.ait Graphic Sign Off Secretary Analyst MPA Deputy State and LocaL Finance 25 State Costs for Employee Compensation Include Benefits Health Retirement Salary  ExcludAingR TuWnivOerRsiKty ,# l eCgFis_la1t4iv0e,4 9a6nd judicial employees, the state spent about $20 billion (all funds) in employee compensation costs in 2012-13. About 30 percent of these costs were for retirement benefits (including pensions, Medicare, and Social Security) and health benefits (including vision and dental). Template_CalFACTS.ait  Over the last two decades, state costs for pensions have grown faster than state costs for salaries or health care. Over the next few decades, recent legislation that decreased pension benefits for new hires is likely to reduce state pension costs. Graphic Sign Off State and LocaL Finance Secretary 26 Analyst Most State Liabilities MPA Now Being Addressed Deputy (In Billions) $90 Not Being Being Addressed Fully Addressed ($160 Billion) 80 ($120 Billion) 70 60 50 40 30 20 10 State Retiree UC and Budgetary Infrastructure State, CSU, Budgetary Health Other Bonds and CalSTRS Retirement Pensions  The state's $280 billion in key liabilities are summarized above. The state has budgeted funds or scheduled payments to address about $160 billion of these liabilities.  Under a 2014 law, the state will pay for about $20 billion of the $74 billion unfunded liability of the state’s teacher pension system known as CalSTRS. School and community college districts and teachers will pay for the remaining $54 billion. ARTWORK # CF_140496 Template_CalFACTS.ait State and LocaL Finance 27 Voting Requirements to Increase Taxes, Fees, Assessments, or Debt Governing Measure Body Voters State Tax 2/3 — Fee Majority — General obligation bond 2/3 Majority Lease revenue bond Majority — Initiative proposing revenue — Majority or debt Constitutional amendment 2/3 Majority proposed by the Legislature Local Tax: Funds used for general 2/3a Majority purposes Funds used for specific 2/3a 2/3 purposes Property assessment Majority Majorityb Fee Majorityc — General obligation bond: K-14 districts 2/3 55 percent Cities, counties, and special 2/3 2/3 districts Revenue bond Majority Majoritya Other debt Majority —d a For most local agencies. b Votes weighted by assessment liability of affected property owners. c Fees on property (excluding water, sewer, refuse collection, gas, and electric fees) require voter approval. d Enhanced infrastructure financing district debt requires approval by 55 percent of the district’s voters. State and LocaL Finance 28 Paying for County, City, and Special District Services 2012-13 (Dollars in Billions) Special Counties Cities Districts Total Revenues $61.0 $68.3 $43.3 Sources of Revenues Property taxes 19% 16% 11% Sales and other taxes 3 19 1 User charges and 22 40 55 enterprise revenues Intergovernmental 48 9 15 transfers Other revenues 7 16 18  Counties receive nearly half of their revenues from the state and federal government and must spend these funds for specific purposes, primarily health and social service programs.  Cities and special districts receive a significant share of their funding from various user charges. Cities and special districts use these funds to pay for electric, water, and other municipal services.  The property tax is the largest source of local tax revenue for all local governments. Other local taxes— such as sales, hotel, utility, and business taxes—make up about one-fifth of city revenues. State and LocaL Finance 29 Allocation of Property Tax Has Varied Over Time (Dollars in Billions) Tax Revenue Distribution Graphic Sign Off Selected Years Revenue Schools Counties Cities Other Secretary 1977-78 $10.3 53% 30% 10% 6% Analyst 1979-80 5.7 39 32 13 16 MPA 1993-94 19.1 51 21 11 18 2012-13 49.9 40 25 19 16 Deputy Information includes debt levies. "Other" includes redevelopment agencies and special districts. 1978 Proposition 13 caps property tax rate at 1 percent and shifts control of its allocation to the state. Schools receive a smaller share of property taxes and are backfilled for their losses with state aid. 1992&1993 State modifies property tax distribution to give a greater share of revenues to schools, thereby reducing state school spending. 2004 State increases the share of property taxes to cities and counties to offset (1) reduced vehicle license fees and (2) the state's use of local sales taxes to repay deficit financing bonds. 2012 State dissolves redevelopment agencies. Property taxes that once went to these agencies begin to flow back to other local governments in the area. 2015 Local sales taxes will be returned to cities and counties after the state retires its deficit financing bonds in 2014-15. Accordingly, city and county shares of property tax revenue will decline (and the schools' share will increase). ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary Analyst MPA Deputy Program Trends 30 California's Public Education System Is Extensive 2013-14 K-12 Education 949 Districts 10,134 Schools 6.2 Million Students 539,000 FTE Faculty and Staffa $51 Billion Proposition 98 Support California Community Colleges 72 Districts 112 Colleges 1.1 Million FTE Students 62,000 FTE Faculty and Staff $6.4 Billion Proposition 98 Support California State University 23 Campuses 352,000 Resident FTE Students 38,000 FTE Faculty and Staff $2.8 Billion State General Fund Support University of California 10 Campuses 5 Medical Centers 3 National Labs 211,000 Resident FTE Students 142,000 FTE Faculty and Staff $2.8 Billion State General Fund Support a Reflects 2012-13 data (latest available). FTE = full-time equivalent. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary Analyst MPA Deputy Program Trends 31 State Is Primary Source of Operating Revenue for Schools 2013-14 Local Funds Federal Funds State Funds Lottery  The state contributes the largest share of funding for school operations (63 percent). A small share of state funding comes from the California Lottery.  Local funding (26 percent) comes primarily from property taxes. A relatively small amount comes from various other sources, including parcel taxes and fees for certain district services (such as transportation).  The federal government contributes funding for several specific purposes, such as supporting low-income students and educating students with disabilities (11 percent). ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary Program Trends Analyst 32 MPA Most School Deputy Spending Is for Instruction 2012-13 Facilities Pupil Services Administration Other Instruction  More than $6 of every $10 is spent on instruction and instructional support—largely paying teacher salaries and benefits.  Almost $2 of every $10 is spent on facilities, including land acquisition, construction, and maintenance.  About $1 of every $10 is spent on pupil services, including school meals, pupil transportation, counseling, and health services.  Less than $1 of every $10 is spent on central administration, including the compensation of superintendents as well as central business, legal, and human resource functions. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary Analyst MPA Program Trends 33 Deputy Proposition 98 School Funding Recovering Funding Per Pupil, (In Thousands)a $12 10 Inflation Adjustedb 8 6 Actual 4 2 1988-89 1993-94 1998-99 2003-04 2008-09 2013-14 a Excludes funding provided for the California Community Colleges. b In 2014-15 dollars. Adjusted using state and local government price index.  State revenues and school funding dropped in 2008-09. (Schools received federal stimulus funding and special fund monies to offset some of this reduction.)  School funding increased quickly in 2012-13 as the state economy recovered from the recession and voters approved state income and sales tax increases.  Proposition 98 funding in 2014-15 was $9,080 per-pupil—about $400 above the inflation-adjusted 1988-89 level. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary Analyst Program Trends 34 MPA Deputy Most School Funding Provided Through LCFF Proposition 98 K-12 Funding by Program, 2014-15 Special Education Other LCFF  The 2014-15 budget provided $54 billion for schools from a combination of state General Fund and local property tax revenues. The state provides the vast majority of funding—$47 billion—through the Local Control Funding Formula (LCFF).  The state created the LCFF in 2013-14, replacing dozens of previous formulas and programs. The LCFF has a base rate for each grade span, with higher grades generally funded at higher rates. On top of these base rates, the LCFF provides additional funding for certain students (see next page).  Because the LCFF has target rates that are much higher ARTWORK # CF_140496 than existing funding levels, the state intends to phase in the formula over the next several years. In 2014-15, the state was funding 80 percent of full-implementation costs. Closing the gap entirely in 2014-15 would have cost an additional $11 billion. Template_CalFACTS.ait Graphic Sign Off Secretary Analyst Program Trends 35 MPA Deputy LCFF Provides Additional Funding for Certain Students K-12 Students by Type All Other Low Income Only English Learner Only Low Income and English Learner  More than 60 percent of K-12 students are low income, English learners, or foster youth (which are counted as low income).  Under the Local Control Funding Formula (LCFF), these students generate supplemental funding equivalent to 20 percent of the base rate.  If these students comprise more than 55 percent of a district’s enrollment, the district also receives concentration funding equal to 50 percent of the base rate for each student above the threshold. ARTWORK # CF_140496  For more information on how the formula works, please see our report, An Overview of the Local Control Funding Formula (December 2013). Template_CalFACTS.ait PROGRAM TRENDS 36 California Has Smaller but Better Paid Teacher Workforce Than Nation 2011-12a United California States Overall Total Number 268,689 3,103,263 Student/Teacher Ratio 23.4 16.0 Gender Female 73% 76% Male 27 24 Experience Less than 3 Years 9% 9% 3 to 9 Years 29 33 10 to 20 Years 42 36 More than 20 Years 19 21 Education Less than Bachelor’s 5% 4% Bachelor’s Degree 43 40 Master’s Degree 39 48 Education Specialist or Doctorate 13 9 Salary Average Teacher Salaryb $62,010 $46,340 Median Salary, All Bachelor’s 53,033 49,157 Degree Holders (2012)c Salary by Years of Experienceb 2 or Fewer Years $47,310 $38,330 6 to 10 Years 58,570 44,040 More than 20 Years 73,980 56,620 a Most recent data from the National Center for Education Statistics. b Reflects data for teachers with bachelor’s degrees only. c American Community Survey, U.S. Census Bureau. Note: Data in the "Overall" section were revised in January 2015. Graphic Sign Off Graphic Sign Off Secretary Secretary Analyst Analyst MPA Program Trends 37 M D P e A puty Deputy K-12 Enrollment Trends Vary Greatly Across State Projected Change, 2013-14 Through 2022-23 10% or Greater 130%% toor 1G0r%eater 30%% t oto 1 30%% 0D%e ctoli n3in%g Declining Statewide 0.7 percent growth over period Statewide 0.7 percent (45,000 students) growth over period (45,000 students) Big Differences in Eight Largest Counties Projected Change (In Thousands), 2013-14 to 2022-23 Riverside San BReirvnearrsdidineo San SBaecrnraamrdeinnoto SacrAalmamenetdoa SaAnltaam Celdaara SaSnatan CDliaergao SanO Driaenggoe Los OAnragneglees Los Angeles -120 -100 -80 -60 -40 -20 20 40 60 80 -120 -100 -80 -60 -40 -20 20 40 60 80 ARTWORK # CF_140496 ARTWORK # CF_140496 Template_CalFACTS.ait Template_CalFACTS.ait Graphic Sign Off Secretary Analyst MPA Deputy Program Trends 38 10 Percent of State's K-12 Students Receive Special Education Share of Students by Disability, 2013-14 635,375 Students Speech or Language Problem Specific Learning Autism Disability Chronic or Acute Health Problem Intellectual Disability Other Visual or Emotional Hearing Disturbance Impairment  Schools must develop individualized plans to meet the educational needs of students with disabilities. In addition to extra academic supports in a classroom setting, special education services can include language, occupational, and behavioral therapies.  Spending for special education services totaled $10 billion in 2012-13, comprising 15 percent of K-12 expenditures in California. These costs were paid with a combination of local general purpose (50 percent), state (38 percent), and federal (12 percent) funds. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary Analyst MPA Deputy Program Trends 39 California Has Many English Learners Second Language Students by Classification 100% 90 80 70 60 50 40 30 Fluent English Proficient 20 English Learners 10 K 1 2 3 4 5 6 7 8 9 10 11 12 Grades Kindergarten Through 12  More than four in ten California students—almost 2.7 million students overall—speak a primary language other than English at home. The vast majority of these students (79 percent) speak Spanish.  Overall, about half of these students are classified as English learners whereas half are considered Fluent English Proficient (FEP). Elementary students, however, are much more likely to be classified as English learners than secondary students.  In California, reclassification from English learner to FEP is determined by school districts based on assessments of language and academic proficiency, teacher evaluation, and parental consultation.  Almost one-third of all English learners in the nation live in California. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary Analyst MPA Deputy Program Trends 40 Student Achievement Gap Is Notable 2012-13 Proficiency in 3rd grade English language arts Proficiency in 3rd grade mathematics Proficiency in 8th grade English language arts Non-Low Income Proficiency in 8th grade Algebra Low Income Four-year graduation rate Graduates meeting UC/CSU entrance requirements 10 20 30 40 50 60 70 80 90 100%  California’s low-income students perform significantly below non-low-income students in 3rd grade and 8th grade English language arts and math.  Seventy-five percent of low-income students graduate within four years. (Some students who do not graduate within four years enroll in a fifth year and graduate later.)  Low-income students are less likely to complete the minimum coursework necessary to be accepted into universities (30 percent, compared with half of non- low-income students).  California ranks 46th in the country in national assessments of 4th grade reading and math. California students perform only slightly better in 8th grade. Both low-income and non-low-income students perform lower than their peers in other states. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Program Trends Secretary 41 Analyst MPA State Subsidizes Child Care and Preschool Deputy Slots and Funding by Age of Child, 2014-15 Five to Twelve Year Olds Four Year Olds Birth to Three Year Olds 114,983 129,984 $786 million $889 million 111,504 $762 million Slots  About 356,000 child F re u n nd w in i g ll receive subsidized child care or preschool in 2014-15, costing over $2.4 billion. The state is providing 62 percent of total funding, with the federal government providing the remainder.  Low-income families (up to roughly $42,000 per year for a family of three) are eligible for subsidized child care and preschool programs. With the exception of State Preschool, programs require the parents to be working.  All families participating in California Work Opportunity and Responsibility to Kids are guaranteed subsidized child care. In addition, the state serves a small share ARTWORK # CF_140496 of other low-income, working families. Template_CalFACTS.ait Graphic Sign Off Secretary Program Trends 42 Analyst MPA Most College Students in Deputy California Attend Public Institutions Headcount Enrollment, 2012-13 Private For-Profits Nonprofits UC CCC CSU Public  The share of students enrolled in public colleges and universities is higher in California than in the nation (79 percent and 70 percent, respectively). California’s share of students in nonprofit colleges is lower, while the share in for-profit schools is similar.  Another way to measure enrollment is by full-time equivalent students (FTES). About 72 percent of the state’s FTES are in the public sector compared with 66 percent nationally. (This is smaller than the share of students using headcount due to a disproportionately large number of part-time students in the community colleges.) ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Program Trends 43 Secretary Analyst State Continues to Cover MPA Large Share of Education Costs Deputy Per-Student Education and Student Services Spending, 2014-15 $25,000 Other 20,000 Student Share State Share 15,000 10,000 5,000 UC CSU CCC  State support (consisting of direct appropriations to the segments as well as Cal Grants and Middle Class Scholarships) accounts for 62 percent, 66 percent, and 93 percent of educational costs at the University of California, California State University, and California Community Colleges, respectively.  The student and family share of these costs is about 25 percent at the universities and 6 percent at the community colleges.  Other sources of support include interest earnings, federal contract and grant overhead, patent royalties, and private gifts. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Program Trends Secretary 44 Analyst Tuition Has Leveled Off MPA Following Steep Increases Deputy Systemwide Tuition and Fees for Full-Time Undergraduate California Residents $14,000 12,000 10,000 8,000 UC 6,000 4,000 CSU 2,000 CCC 1994-95 1999-00 2004-05 2009-10 2014-15  Changes in tuition and fees have been irregular, with periods of flat or even falling tuition alternating with periods of steep increases.  Compared with 20 years ago, tuition levels have more than tripled in actual dollars but less than doubled in inflation-adjusted dollars.  Currently, California Community Colleges fees are lowest among the 50 states. Undergraduate tuition and fees at the California State University are lower than all 15 of its public comparison universities and at the University of California are below three of four public comparison institutions.  About half of California students currently enrolled in the public sector receive grants or waivers that fully cover systemwide tuition and fees. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary Program Trends 45 Analyst MPA State Financial Aid Deputy Spending Continues to Grow (Dollars Awarded in Billions) $5.0 4.5 4.0 3.5 3.0 2.5 2.0 1.5 Campus Programsa 1.0 0.5 Statewide Programsb 1994-95 1999-00 2004-05 2009-10 2014-15 a Includes need-based tuition aid, fee waivers, and university grants. b Includes Cal Grants and Middle Class Scholarships administered by the California Student Aid Commission.  Over the last 20 years, total state aid has increased more than 12-fold in actual dollars and 6-fold in inflation-adjusted dollars.  Growth in state financial aid spending has been related to increases in tuition at the public segments (which increase costs of Cal Grants and fee waivers), increases in the number of students receiving aid, and state policy changes.  In addition to state aid, many students receive federal financial aid, including Pell Grants and federal tax deductions and credits. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary Analyst Program Trends 46 MPA Deputy Most College Students at Public Segments Do Not Graduate on Time 100% 90 Four-Year 80 Graduation Rate 70 Two-Year 60 Graduation Rate 50 40 30 20 10 UCa CSUa CCCb a Percentage of first-time, full-time freshmen enrolling in fall 2009 who graduated within four years (2013). b Percentage of degree-seeking, first-time, full-time students enrolling in fall 2011 who completed a degree, a certificate, or a transfer program within two years (2013).  Some students not graduating on time graduate later. At the University of California and the California State University (CSU), six-year graduation rates rise to 83 percent and 52 percent, respectively. At the California Community Colleges, the three-year graduation rate rises to 25 percent.  A stude A nt R c T an W t O ak R e K lo n # g e C r F to _ 1 g 4 ra 0 d 4 u 9 at 6 e because he/she (1) enrolls in less than 15 credits some terms, (2) cannot find space in required courses, (3) changes major, or (4) pursues a double major.  As time goes on, increases in graduation rates drop Template_CalFACTS.ait off. For example, after ten years at CSU, graduation rates rise to 60 percent. Virtually all of the remaining 40 percent of students have left the system. Program Trends 47 What Are the Major Human Services Programs? 2013-14 (In Billions) Funding Total General Program Funds Fund SSI/SSP. Cash assistance to low- $9.9 $2.8 income aged (65+), blind, or disabled individuals. CalFresh. Food assistance to low- 9.6 0.7 income individuals and families. (Formerly known as the Food Stamp Program.) IHSS. In-home personal care and 6.4 2.0 domestic services to low-income aged (65+), blind, or disabled individuals. CalWORKs. Cash assistance and 5.4 1.1 welfare-to-work services to very low- income families with children. DDS—Community Services. Wide 4.4 2.5 range of services in community settings for individuals with developmental disabilities. DDS—Developmental Centers. Wide 0.6 0.3 range of services in an institutional setting for individuals with developmental disabilities. Foster Care. The temporary placement 1.9 — of children in a foster home when they have been removed from their families’ home due to maltreatment. IHSS= In-Home Supportive Services and DDS= Department of Developmental Services. Program Trends 48 Varied Caseload Growth in Major Human Services Programs (Caseloads in Thousands) Caseload Percent Change 2003-04 to Program 2003-04 2013-14a 2013-14 CalFresh 1,839 4,332 136% IHSS 318 473 49 DDS— 190 265 40 Community Services SSI/SSP 1,158 1,299 12 CalWORKs 1,251 1,325 6 Foster Care 90 65 -28 DDS— 3 1 -62 Developmental Centers a Estimated. IHSS = In-Home Supportive Services and DDS = Department of Developmental Services.  Between 2003-04 and 2013-14, the caseloads for some major human services grew while others declined.  The DDS—Developmental Centers and Foster Care caseloads are the only major human services programs to experience a caseload decline over the time period. This decline is primarily due to policy decisions to rely on alternative services for these individuals.  During the recent economic downturn, unemployment rates increased and income decreased—causing the CalFresh and CalWORKs caseloads in particular to increase. While CalWORKs peaked in 2010-11 and has been declining since, CalFresh continues to grow. Graphic Sign Off Secretary AGnarlaypsthic Sign Off Program Trends 49 MPA Secretary Deputy Analyst SSI/SSP Grant Recently Fell Below Poverty Level. . . MPA Deputy $1,800 1,600 Poverty Level for an Individuala 1,400 SSI/SSP Grant —Individualsb $11,,280000 11,,060000 Poverty Level for an Individuala 1,840000 SSI/SSP Grant —Individualsb 1,620000 1,400000 280000 600 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 400 200 . . .While Combined CalWORKs/ $1,800 CalFresh Assistance Remains 1,600 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 S 1,4ig00nificantly Below Poverty Levelc $ 11,,280000 11,,060000 800 1,400 600 1,200 Poverty Levela 400 1,000 CalFresh Allotment 2 8 0 0 0 0 CalWORKs Grantb 600 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 Poverty Levela 4a0 B0ased on Official Poverty Measure. b Maximum month C ly a l g F r r a e n s t h . Allotment 2c0 B 0 ased on a famiClya olWf tOhrReeK.s Grantb 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 a Based on Official Poverty Measure. b Maximum monthly grant. c Based on a family of three. ARTWORK # CF_140496 ARTWORK # CF_140496 Template_CalFACTS.ait Template_CalFACTS.ait Graphic Sign Off Secretary Analyst MPA Deputy Program Trends 50 IHSS Cost Per Consumer Increases Again After Recent Plateau Average Annual Cost Per Consumer (In Thousands) Federal and County Funds $16 General Fund 14 12 10 8 6 4 2 03-04 04-0505-0606-07 07-0808-0909-1010-11 11-1212-13 13-14a14-15a aEstimated.  Between 2003-04 and 2009-10, the cost to provide services to an In-Home Supportive Services (IHSS) consumer increased by an average of 5 percent annually—from about $10,000 to $13,100. Between 2010-11 and 2013-14—during a period of budget reductions that reduced consumers’ authorized service hours—the cost per IHSS consumer increased by an average of only 1 percent annually from $12,900 to $13,400.  The increased cost per consumer estimated for 2014-15 is due primarily to new federal requirements to pay overtime compensation to IHSS providers who work more than 40 hours per week and for other newly compensable work activities that increase the cost of delivering IHSS to consumers. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary Analyst MPA Deputy Program Trends 51 Recent Uptick in Foster Care Caseload Reverses Historical Trend 140,000 Other Placement Group Home/Shelter 120,000 Foster Home 100,000 Kinship Carea 80,000 60,000 40,000 20,000 2000 2002 2004 2006 2008 2010 2012 2014 a Kinship care is where foster children are placed with relative caregivers. Kinship care is the most frequently used placement option, which is consistent with state policy requiring foster children to be placed in the most family-like setting possible.  Between 2000 and 2012, the number of children in foster care steadily declined. Foster care caseloads began increasing in 2013.  Despite the recent uptick, the caseload today is still 43 percent less than it was in 2000. This overall decline can be attributed in part to a focus on providing services that support family maintenance and the creation of a program that provides financial assistance to relative caregivers who become legal guardians—outside of the foster care system.  Although it is early to tell, the uptick in caseload is likely to be due, in part, to a recent law change which allows children to remain in the foster care system longer (until age 21 rather than 18). ARTWORK # CF_140496 Template_CalFACTS.ait Program Trends 52 Health of California's Population Compared to the Nation 2011-12 California Nation Overall Health Status Percent of persons self-reporting 16.1 10.3 less than good health Adult Health Risk Factors Percent of adults aged 18 or older 13.6 16.7 who smoke Percent of adults aged 20 or older 26.0 35.7 who are obese Percent of adults aged 20 or older 28.2 28.3 who report ever being diagnosed with hypertension Infant, Child, and Adolescent Health Percent of low-weight births 6.7 8.0 Infant deaths per 1,000 births 4.5 6.0 Percent of children ages 19 to 33.2 31.6 36 months who did not complete a set of recommended childhood vaccinations Percent of adolescents aged 15.8 20.5 12 to 19 who are obese Mortality Deaths per 100,000 population 636.6 807.3 Top two leading causes of death Heart Heart Disease, Disease, Cancer Cancer  In the figure above, lower values are better. On all indicators except self-reported overall health status and vaccination rates for children ages 19 to 36 months, California is doing better than the nation as a whole. Graphic Sign Off Secretary Analyst MPA Deputy Program Trends 53 Medi-Cal at a Glance Funding by Sourcea General Fund Other Federal Funds Nonfederal Funds Enrollment by Populationb Childless Adults Seniors and Persons Families With Disabilities and Children a As appropriated in the 2014-15 Budget Act. b As estimated for Medi-Cal appropriation in the 2014-15 Budget Act.  The Medi-Cal Program provides health coverage to more than 10 million low-income people, and is by far the largest health program in the state budget ($17.4 billion General Fund in 2014-15).  In the past, Medi-Cal mainly covered (1) families and children and (2) seniors and persons with disabilities. Beginning 2014, the state expanded Medi-Cal to cover new populations, mainly childless adults. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary Analyst MPA Deputy Program Trends 54 Majority of Medi-Cal Enrollment and Spending Now in Managed Care Percent of General Fund Spending in Managed Carea 80% Percent of Enrollment in Managed Careb 70 60 50 40 30 20 10 2010-11 2011-12 2012-13 2013-14 2014-15 aAs appropriated in annual budget act. bActual for 2010-11 through 2012-13, estimated for 2013-14 and 2014-15.  Medi-Cal provides health care services under two arrangements: (1) fee-for-service (providers are paid for each service delivered) and (2) managed care (health plans are paid a fixed monthly rate per enrollee regardless of the number of services delivered).  While managed care has covered the majority of Medi- Cal enrollees over the past decade, until recently, the majority of General Fund spending was for fee-for- service. This is because the most expensive populations and services—such as seniors and persons with disabilities (SPDs) and long-term care—remained in fee-for-service.  Since 2011-12, the state has shifted SPDs from fee-for- service to managed care. In some counties, long-term care is now provided through managed care. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary Analyst MPA Deputy Program Trends 55 Physician Participation in Medi-Cal Is Relatively Low Percent of California Physicians Accepting New Patients by Coverage Source, 2013 Non- PCPs Medi-Cal PCPs Medicare Private Insurance All Physicians 10 20 30 40 50 60 70 80 90% PCP = primary care physician. Source: California HealthCare Foundation, "Physician Participation in Medi-Cal: Ready for the Enrollment Boom?"  In 2013, physicians were less likely to accept new Medi-Cal patients than new patients with private insurance or with Medicare. The state's lower Medi-Cal reimbursement rate structure is likely one key factor.  In 2013, there were 35 to 49 full-time equivalent (FTE) primary care physicians with Medi-Cal patients per 100,000 Medi-Cal enrollees. This ratio is lower than the federally recommended standard of 60 to 80 FTEs per 100,000 population.  Starting in 2014, the Medi-Cal expansion under federal health care reform will likely increase the number of new enrollees seeking physician services. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary Analyst MPA Deputy Program Trends 56 Health Insurance Coverage in 2013, Before Covered California Opened for Enrollment Adults, Aged 18-64 Uninsured Employer- Sponsored Other Medi-Cal  At a given point in time during 2013, 24 percent of Californians aged 18 to 64, or about 5.7 million people, did not have health insurance coverage.  The Patient Protection and Affordable Care Act expanded health coverage through Medi-Cal and subsidies as of January 1, 2014. Medi-Cal eligibility was expanded to include previously ineligible adults with incomes up to 138 percent of the federal poverty level (FPL). Subsidized health insurance coverage, available through Covered California (the state’s Health Benefit Exchange), also became available to certain qualifying citizens and legal residents with incomes between 100 percent and 400 percent of FPL. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary Program Trends 57 Analyst MPA Recent Significant Decline Deputy In State's Uninsured Populationa Adults, Aged 18-64 3.4 Million (58%) Gained Health Coverage Employer-Sponsored Medi-Cal Other Covered California 2.5 Million (42%) Remain Uninsuredb Undocumented Medi-Cal Eligible, Not Enrolled ACA Subsidy Eligible, Unknown Coverage Not Purchased Income-Ineligible for Medi-Cal or ACA Subsidies ACA = Patient Protection and Affordable Care Act a Based on a Kaiser Family Foundation survey tracking the changes in the uninsured population between summer 2013 and spring 2014. b The remaining uninsured do not include Californians who became uninsured during the first ACA open enrollment period. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary Program Trends 58 Analyst MPA The Unemployment Insurance Deputy Trust Fund Insolvency Continues (In Billions) $15 Benefit Payments 10 5 Revenues -5 Fund Balance Negative Fund Balances -10 -15 2000 2005 2010 2015 Note: Dotted lines show Employment Development Department projections.  The Unemployment Insurance Trust Fund has been insolvent since 2009, as high levels of unemployment during the recession resulted in the state paying more in unemployment benefits than it collected in revenues.  While the trust fund is insolvent, the state receives federal loans to finance unemployment benefits. At the end of 2013, the loan balance was $9.7 billion, with an annual interest payment of $259 million.  Revenues began to exceed benefit payments in 2013, but without an increase in revenues and/or a reduction in benefits, the trust fund is projected to remain insolvent until 2019 and risks returning to insolvency in a future recession. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary Analyst MPA Deputy Program Trends 59 Growth in State Hospital Population Due to Expanding Forensic Population 7,000 6,000 5,000 4,000 3,000 2,000 Civil Commitments Forensic Commitments 1,000 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013  In 2013, the Department of State Hospitals (DSH) provided inpatient mental health treatment to a caseload of about 6,300 patients in one of two broad categories: (1) civil commitments, who are generally referred for treatment by the counties, or (2) forensic commitments, who are referred from the criminal justice system (primarily the courts). About 90 percent of patients are forensic commitments.  Over the past decade, the population in DSH has increased by about 1,700 patients, or about 30 percent. This growth is due to an increase in the number of forensic patients admitted to DSH.  The 2014-15 budget provides the department with $1.5 billioAnR frTomW thOe RGeKn e#ra Cl FFun_d1, 4or0 a4b9ou6t $229,000 per forensic patient. Civil commitments are paid for by the counties and do not receive state support. Template_CalFACTS.ait Graphic Sign Off Secretary Analyst MPA Deputy Program Trends 60 California Crime Rate at Historic Low Crimes per 100,000 Population 9,000 8,000 Total 7,000 6,000 Property 5,000 4,000 3,000 2,000 Violent 1,000 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010  California has experienced a decline in both property and violent crime rates since the early 1990’s. Between 1993 and 2013, the state’s overall crime rate declined by half. This trend is similar to declines in crime patterns in the rest of the United States.  In 2013, about 3,000 crimes were committed in California per 100,000 residents—a total of about 1.2 million incidents. This is down from a high of over 2 million crimes reported annually in the early 1990s.  The state’s property crime rate is lower than the nationwide rate. However, the rate of violent crime (such as murder, rape, and assault) in California remains somewhat higher than the United States as a whole. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary Analyst MPA Program Trends 61 Deputy 2011 Realignment Shifted More Adult Offenders to Counties 2010 Adult Offender Population Total: 653,000 Prison Community Supervision Parole State Jail County 2013 Adult Offender Population Total: 603,000 Prison Community Parole Supervision Jail  The number of adult offenders under state jurisdiction declined by about 88,000 since the 2011 realignment, from about 271,000 in 2010 to 182,000 in 2013. The number of offenders under county jurisdiction increased over the same period by about 39,000, from about 382,000 in 2010 to 421,000 in 2013. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary Analyst MPA Deputy Program Trends 62 Most Inmate Costs Related to Security and Health Care Total Costs: $55,000 Inmate Health Care Security Facility Operations and Records Rehabilitation Administration Programs Inmate Food and Activities  In 2012-13, the average cost to incarcerate an inmate was about $55,000. The primary cost drivers for the state’s prison system are security (such as correctional officer pay)—which accounts for 48 percent of the total cost—and health care—which accounts for 29 percent.  Other states typically spend around $30,000 per inmate per year. The difference is primarily due to the relatively high salaries of California’s correctional officers, as well as California’s high cost of inmate health care. California’s per inmate health care spending increased substantially after a federal court appointed a receiver in 2006 to directly manage the state’s prison medical care delivery system. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary Analyst MPA Deputy Program Trends 63 Most Filings in Trial Courts Involve Traffic Cases 2012-13 Criminal (Non-Traffic) Civil Other Case Types Juvenile Family Traffic Total: 7.7 Million Filings  In 2012-13, trial courts received about 7.7 million submissions to the court (“filings”). Of these, an estimated 70 percent were traffic cases.  While most court filings involve traffic cases, such cases are resolved relatively quickly and do not require significant court resources. Rather, most court resources (more than two-thirds) support non-traffic criminal, civil, or family law cases.  In 2012-13, only 7 percent of filings were resolved through trial. The remaining were resolved in other ways, such as through settlements or hearings. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary Analyst MPA Deputy Program Trends 64 Responsibility Areas for Wildland Fire Protection State Federal Local  The California Department of Forestry and Fire Protection (CalFire) has primary responsibility for wildland fire protection on more than 31 million acres of mostly privately owned lands, referred to as State Responsibility Areas (SRA). Local and federal agencies are responsible for the rest of the state.  Funding for SRA fire protection has generally been increasing, but it varies significantly each year depending on the number, severity, and location of wildfires. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary Analyst MPA Deputy Program Trends 65 Groundwater Use Significantly Increases in Dry Years (Millions of Acre-Feet Per Year) 30 Surface Water 25 Groundwater 20 15 10 5 Wet Year Average Year Dry Year  Water supplies for drinking, irrigation, and industrial uses in California mainly come from surface water and water available underground (referred to as “groundwater”). Groundwater is used significantly more in dry years, when less surface water is available. For example, groundwater use almost doubled in 2009 compared to 2005, while surface water use declined.  Groundwater use varies widely across different parts of the state. Over 70 percent of the state’s groundwater use occurs in the Central Valley.  Groundwater levels have dropped rapidly in recent years and reached historic lows in many parts of the state due to drought. This groundwater depletion can cause several problems—wells that run dry, subsidence (sinking land), damage to infrastructure, groundwater contamination, and permanent loss of groundwater storage. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary Analyst MPA Deputy Program Trends 66 Greenhouse Gas (GHG) Emissions Come From Various Sources Commercial and Total: 459 MMTCO2E in 2012 Residential 9% Agriculture 8% Other 6% Transportation 37% Industrial 19% Electricity 21% MMTCO2E = Million Metric Tons of Carbon Dioxide Equivalents.  Transportation, electricity generation, and industrial activities—such as oil refinement and cement production—account for about three-quarters of GHG emissions in California.  In 2006, AB 32 established the statewide goal of reducing GHG emissions to 1990 levels—431 MMTCO2E—by 2020. Most of the reductions are expected to come from regulations that are focused on certain types of emissions, including reducing the carbon intensity of fuels, energy efficiency programs, and a requirement that 33 percent of electricity come from renewable sources by 2020.  A cap-and-trade program is expected to generate the remaining GHG reductions. Under this program, the state limits the amount of GHGs that can be emitted and requires large emitters to obtain emission permits (“allowances”) equal to their emissions. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary Analyst MPA Deputy Program Trends 67 Transportation Funding Comes From Multiple Sources 2014-15 Federal Local Gasoline Excise Tax State Cap-and-Trade Revenues Weight Fees Diesel Sales & Excise Taxes  Total transportation funding in the state will be roughly $28 billion in 2014-15.  Local governments provide half of all transportation funding in California. Local transportation funding sources include local sales taxes, transit fares, development impact fees, and property taxes.  About one-fourth of the state’s transportation funding comes from the federal government, supported primarily by federal excise taxes on diesel and gasoline.  The remaining one-fourth of transportation funding comes from a variety of state revenue sources— primarily excise taxes on gasoline. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary Analyst MPA Deputy Program Trends 68 Average California Driver in 2013… . . . drove nearly 40 miles a day. . . . spent roughly $4,900 on vehicle expenses and fuel. . . . paid about $220 in state fuel tax and $110 in federal fuel tax.  There are 25 million licensed drivers in California, which is about 80 percent of Californians over the age of 16.  Traffic crashes remain a leading cause of preventable death in California. In 2012, 2,995 people were killed in crashes. California had the ninth lowest fatality rate in the nation—0.88 fatal injuries for every 100 million miles driven.  Roughly 85 percent of Californians drive to work alone or in a carpool, while about 5 percent of Californians use transit and about 4 percent walk or use a bicycle to reach their jobs.  Roughly 1 in every 35 passenger vehicles registered in California is a hybrid or electric vehicle. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary Analyst MPA Deputy Program Trends 69 Most State Infrastructure Spending Is for Transportation and Education Infrastructure Spending, 2003-04 to 2012-13 K-12 Transportation Higher Education Resources Criminal Other Justice  Over the past ten years, the state spent about $100 billion on infrastructure. More than 75 percent of this spending was for transportation projects and educational facilities (K-12 and higher education).  More than half of state infrastructure spending was for local infrastructure projects (such as local schools and roads) versus state projects (such as prisons and highways).  About two-thirds of the state’s infrastructure spending was financed using bonds. The remaining third of its infrastructure spending was paid up-front, almost all from special fund revenues, such as taxes on gas. ARTWORK # CF_140496 Template_CalFACTS.ait Graphic Sign Off Secretary Program Trends 70 Analyst MPA Debt-Service Ratio Expected to Deputy Remain Under 6 Percent Percent of General Fund Revenues Spent on Debt Service 7% Authorized, Unsold 6 5 4 3 2 Bonds Already Sold 1 95-96 00-01 05-06 10-11 15-16 Projected  The state’s debt-service ratio—the percent of the state’s General Fund revenues and transfers spent to pay interest and principal on its bonds—is one indicator of the state’s debt burden.  The debt-service ratio is currently about 5.6 percent and is projected to stay near that level over the next few years. This is because the state’s General Fund revenues and General Fund debt service are expected to grow at similar rates.  The debt-service ratio varies over time based on how many bonds the state sells, the interest rates the state pays on those bonds, and the amount of revenue the state collects, among other things. ARTWORK # CF_140496 Template_CalFACTS.ait Program Trends 71 Major State Information Technology (IT) Projects Under Development (In Millions) Estimated Estimated Project Description Completion Date Total Cost Integrated statewide July 2017 $672.6 financial information system ("FI$Cal") Tax return processing, December 2016 $537.8 collections, and data analytics system for Franchise Tax Board Eligibility, enrollment, April 2017 $472.4 and case management system for various public assistance programs Payments processing September 2017 $458.6 system for Medi-Cal fee- for-service providers Statewide case April 2019 $449.0 management system for child welfare services Total $3,087.1  Currently, there are 44 state agency IT projects approved by and under the oversight of the Department of Technology in various phases of development. The total cost, should the state complete all IT projects as currently envisioned, is estimated to be about $4.1 billion. Graphic Sign Off Secretary Analyst MPA Program Trends Deputy 72 Gambling in California Tribal Gaming 60 casinos 26 counties $7 billion in revenue after winnings CA Lottery Around 21,000 retailers All 58 counties $1.8 billion in revenue after winnings Cardrooms 89 cardrooms 32 counties $850 million in revenue after winnings Horse Racing 38 temporary and permanent facilities 19 counties $640 million in revenue after winnings Charitable Organizations Bingo Card night fundraisers ARTWORK # CF_140496 Template_CalFACTS.ait WWW.LAO.CA.GOV All LAO publications are posted on our website. To be immediately notified when reports are released, visit the site and click on Subscribe. LAO Publications To request publications call (916) 319-8317. The LAO is located at 925 L Street, Suite 1000, Sacramento, CA 95814.