February 26, 2010
The job market remains tough, but there is some reason to cheer.
As Jean Ross explains in an op-ed today in the Fresno Bee, a federally funded jobs program created by the American Recovery and Reinvestment Act has been quietly creating jobs for low-income families and providing a boost to local economies all over California this year. Many of the workers in these jobs are recipients of CalWORKs, the state’s welfare-to-work program. Not only has the program helped families with children find work, gain skills, and transition off welfare, it’s also helped employers avoid layoffs and hire the employees they need. Recently profiled in the New York Times, the program has received bipartisan support.
The problem? Unless Congress moves quickly to extend and expand funding, counties may begin scaling back on their job creation programs soon. The CBP urges Congress not only to extend and expand the TANF Emergency Fund, which supports these jobs, but also to increase the maximum amount of funding a state can receive.
As Jean writes, “Creating jobs, stimulating the economy, and providing a transition from welfare to work: This jobs program is good news for California at a time when good news is sorely needed. Let’s keep it going.”
– Lisa Gardiner
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Federal Budget & Taxes, Human Services & Child Care | Tagged: CalWORKS Program, economy, jobs | 
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Posted by cbporg
February 24, 2010
How does California compare to other states with respect to support for its public schools? Answering that question based on how much the state spends per student has led to a debate. Some rank California near the bottom, while others have placed the state closer to the middle of the pack. The controversy centers on data sources and methods. Historically, California’s per pupil spending ranks relatively poorly when measured by data that adjusts for regional cost differences, but it ranks somewhat higher when those adjustments are not made. Data recently released by the National Education Association (NEA), which are not adjusted for regional cost differences, may quell the controversy.
According to the NEA, California’s K-12 education spending dropped by more than $1,000 per student – 10.6 percent – between 2007-08 and 2009-10. As a result, California’s per pupil spending ranking fell from 34th in the nation in 2007-08 to 45th this year, absent adjustment for regional cost differences. According to the most recent data published by Education Week, which attempts to adjust spending to reflect differences in states’ cost-of-living, California ranked 46th in per pupil spending in 2006-07. It is reasonable to assume that California’s ranking will not improve once Education Week’s cost-adjusted data are updated to 2009-10. This is because the NEA data show that California’s school spending was cut more than other states’ and regional cost differences are likely to have remained largely unchanged.
Governor Schwarzenegger’s budget proposals could cause the state’s ranking to slip even further. Despite assertions that he is protecting education funding, the Governor’s proposed budget would cut $2.1 billion from K-12 education spending between 2009-10 and 2010-11. Under the Governor’s proposal, 2010-11 K-12 spending would be $6.4 billion – 12.7 percent – lower than in 2007-08. When measured on a per pupil basis, the state would spend less in 2010-11 than it did in 1997-98, after adjusting for inflation. The debate over how California compares to other states with respect to per pupil spending may become less heated, but a question remains: How much should the state spend to ensure that all California students receive a quality education?
– Jonathan Kaplan
Comments Off | Education | Tagged: K-12 education, Per-pupil spending | Permalink
Posted by cbporg
February 23, 2010
As an organization whose mission is to conduct fact-based analyses with the highest level of intellectual honesty, accuracy, and objectivity, we find it troubling when a deeply flawed analysis is used to inform policy debates. A recent report, Cost of State Regulations on California Small Business Study, is the latest example of pseudo-research we’ve heard cited in policy circles, and it prompted us to write a memo warning that the report’s findings don’t hold up under scrutiny. While this report should not be used to inform policy decisions, it does serve one useful purpose: to illustrate important lessons about how to spot shoddy research.
Lesson 1: Be wary of research that can’t be independently verified. Sound studies meet the basic academic research standard of validity: A valid study is one that measures what it claims to measure. The regulations report fails to meet this standard because its analysis relies on poorly documented information on state regulatory climates that cannot be independently assessed. That means it’s impossible to determine whether the key measure upon which the report’s findings are based is legitimate, and that makes all of the report’s conclusions dubious.
Lesson 2: Don’t be duped by the use of complex econometric models – basic methodology and the integrity of the underlying data matter more. Just because a report appears on the surface to have the elements of economic research doesn’t mean that it actually follows sound methodology. The regulations report plugs numbers into complicated models and tosses around sophisticated-sounding econometric terms, but in reality, its analysis is replete with serious statistical errors. In fact, correcting for a single methodological error in the report reverses its key finding, rendering all of the report’s conclusions invalid.
Lesson 3: You don’t have to be an expert to evaluate economic research – if the results don’t make sense, something is wrong. Sometimes researchers put so much faith in their models, they fail to think about whether their results make sense. The regulations report is filled with illogical and implausible findings. For example, the report’s analysis suggests that state economies produce substantially more when the cost of doing business increases or when workforce quality deteriorates. Such findings should have been blazing red flags that something was wrong with the report’s analysis.
– Alissa Anderson
Comments Off | State Budget | Tagged: research, state regulations | Permalink
Posted by cbporg
February 22, 2010
Nearly a year ago, we wrote that supporting efforts to boost collection of sales taxes due on electronic purchases from out-of-state retailers ought to be a “no brainer.” It is still a no brainer and we’re baffled why anyone would oppose efforts to limit tax breaks only available to businesses that don’t employ Californians and don’t invest in California. A column published yesterday by the Sacramento Bee discusses behind-the-scenes lobbying efforts by Amazon.com to defeat legislation passed by the State Senate last week that would take a small step toward eliminating the preferential treatment of out-of-state retailers.
To repeat what we said a year ago, at a time when California faces significant budget shortfalls and California retailers face declining sales, you’d think a bill that makes it possible for the state to collect taxes that are legally owed and limits the incentive to buy from businesses that don’t employ a single Californian would be greeted with open arms. Unfortunately, there’s still reason for concern. The current measure won’t erase the entire $2 billion to $5 billion gap attributable to untaxed Internet sales – that would require Congressional action overturning the 1992 US Supreme Court decision in Quill Corporation v. North Dakota – but it would raise about $107 million that could be used to help balance the budget. That’s enough to restore the Governor’s proposed reductions to the Healthy Families Program, which provides low-income working families access to affordable health coverage for their children.
And, for the record, unlike Bee columnist Dan Morain, I don’t own an Amazon Kindle and wouldn’t even consider buying one until Amazon does the right thing and collects the sales tax its customers already owe on their purchases from the Seattle-based behemoth. iPad anyone?
– Jean Ross
Comments Off | State Budget, State Taxes | Tagged: Amazon, Amazon tax, Healthy Families Program, Internet sales tax | Permalink
Posted by cbporg
February 18, 2010
Earlier today, the state Senate passed a series of measures aimed at closing a portion of the gap in the current and upcoming years’ budgets. Provisions passed by the Senate include:
- Extending a 3 percent reduction in Regional Center provider payment rates;
- Assuming $811.0 million in savings from prison medical costs and $182 million in savings from commutation of prison sentences;
- Requiring state departments and agencies to reduce payroll costs by 5 percent; and
- Expanding the range of retailers who are required to collect sales taxes from Californians.
The Senate deferred action on other provisions, including a complicated “gas tax swap” that would eliminate the sales tax on gasoline and replace it with an increase in the gasoline excise tax. This provision would allow the state to use revenues that are currently dedicated to specific purposes to be used to pay for obligations paid out of the General Fund, thereby reducing the budget gap. The Senate proposal somewhat parallels a proposal made by the Governor in January, with several important differences. The Senate would, for example, continue to impose the sales tax on diesel fuel and dedicate a portion of the revenues raised to public transit. Action was also deferred on a proposal that would impose a surcharge on homeowners’ insurance policies to support CalFIRE emergency response costs. A full list of Senate mid-year budget “solutions,” including those yet to be acted on, is available here. The Senate-passed measures will now go to the Assembly for consideration and action.
– Jean Ross
Comments Off | State Budget | Tagged: gas tax swap, State Budget | Permalink
Posted by cbporg
