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Key Takeaways from Recent LAO Publications – March 10, 2023

Our office will publish shorter, more focused budget analyses over the next few months. In most cases, rather than sending out an announcement for each publication, we will provide periodic updates with the key takeaways from recent pieces. All of our 2023-24 budget analyses to date can be found here.

The 2023-24 Budget: Student Housing

  • Removing Student Housing Funds Would Provide Additional Budget Solution. The Legislature could achieve as much as $2.6 billion in additional one-time General Fund budget solution by removing student housing funds, rather than delaying most of these funds as the Governor proposes. The Legislature could consider removing these funds given student housing project proposals are in early planning phases, no data is available yet on the first round of student housing grants, the role of the state in subsidizing on-campus housing remains unclear, and other state programs might provide more effective avenues for improving college affordability and reducing student housing insecurity.
  • Options Exist for Prioritizing Among Projects. Despite these considerations, were the Legislature to provide one-time funding for student housing, it could prioritize loans over grants and university projects over community college projects.

LAO Contact: Jennifer Pacella

The 2023-24 Budget: Proposed Energy Policy Changes

  • Governor Proposes Changes to How State Procures and Pays for Reliable Clean Energy. Proposals include: (1) establishing a new central procurement role for the state to secure energy resources that would be used by electric utilities, for which costs would be recovered from ratepayers, and (2) requiring electric utilities that experience energy deficiencies to make payments for state-operated emergency backup electricity resources.
  • Proposals Raise Key Questions. We recommend the Legislature consider: (1) how these policy changes might impact electricity rates; (2) whether these proposals are necessary in light of significant funding recently provided for electric reliability and existing state procurement requirements; (3) what risks the proposed new procurement role might pose to the state; (4) the degree to which the proposals are needed now, as opposed to in a future year, and (5) whether to consider these proposals as part of the policy—rather than budget—process, which could allow for more time for thoughtful deliberation.

LAO Contact: Sarah Cornett

This article was released by the Legislative Analyst’s Office.