The California Legislative Analyst Office (LAO), similar to the federal Congressional Budget Office (CBO), serves as the fiscal and policy advisor to the Legislature. It has done so for more than 75 years and the LAO is known for its fiscal and programmatic expertise and nonpartisan analyses of the state budget in California. The office serves as the “eyes and ears” for the Legislature to ensure that the executive branch is implementing legislative policy in a cost efficient and effective manner.
The LAO is overseen by the Joint Legislative Budget Committee (JLBC), a 16-member bipartisan committee comprised of an equal number of Assembly Members and Senators. The LAO has a staff of more than 40 analysts and support staff. The analytical staff cover several budget and policy areas. The office serves as a staff resource to all legislators.
A key responsibility of the LAO is to analyze the annual Governor’s budget and the LAO prepares a series of analyses from the beginning to the end of the budget process on overarching fiscal issues, as well as specific departmental budget proposals and offers its recommendations for legislative action. The LAO’s documents help set the agenda for the work of the Legislature’s fiscal committees in developing a state budget. Staff of the LAO work with the legislative committees throughout the budget process and provide public testimony on the office’s recommendations.
The LAO used to analyze pending legislation. However, due to budget cutbacks, they now only analyze the State Budget. They also provide recommendations for legislators on budget reforms. They participate along with DOF staff in all of the budget subcommittees and full committee hearings. The LAO staff testifies on its findings and recommendations when the Assembly and Senate hear the budget bill in budget subcommittees, as well as in the joint budget conference committee. The LAO also prepares the ballot analysis for each measure on the statewide ballot.
In addition, the LAO performs the following functions:
Budget “Control.” The LAO reviews requests by the administration to make changes to the budget after it is enacted. These reviews are used primarily by members of the JLBC and the fiscal committees.
Special Reports. Throughout the year, the office prepares special reports on the state budget and topics of interest to the Legislature.
Initiatives and Ballot Measures. The office estimates the fiscal effect on state and local government of all proposed initiatives (prior to circulation) and prepares analyses of all measures that qualify for the statewide ballot.
Forecasting. The LAO forecasts the state revenues and expenditures.
The LAO provides ongoing reports in the following policy areas:
- Capital Outlay, Infrastructure
- Criminal Justice
- Economy and Taxes
- Environment and Natural Resources
- Health and Human Services
- Local Government
- State Budget Condition
- Other Government Areas
The LAO provides the following recurring budget reports:
The LAO is an invaluable player in the annual state budget negotiations, working on behalf of the Legislature to ensure that it has all of the data and information it needs to work collaboratively with the executive branch of state government in crafting the most important annual bill enacted by the Legislature.