California Legislative Analyst's Office
The Legislative Analyst's Office (LAO), located in Sacramento, California, is a nonpartisan government agency that has been providing fiscal and policy advice to the California Legislature since 1941. It is known for its fiscal and programmatic expertise and nonpartisan analysis of the state budget. 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 was the first such institution in the United States that was designed to help both houses of a legislature manage the state budget in a strictly nonpartisan fashion; it inspired the creation of many similar agencies in other states, as well as the creation of the nonpartisan Congressional Budget Office in 1974. The LAO should not be confused with the California Legislative Counsel (a position established in 1913) which provides a broader range of services and does not focus primarily on the budget.
The LAO is overseen by the Joint Legislative Budget Committee (JLBC), a 16-member bipartisan committee. The office currently has a staff of 43 analysts and approximately 13 support staff. The analytical staff is divided into nine subject areas: Criminal Justice; State Finance; K-12 Education; Higher Education; Health; Local Government; Resources and Environmental Protection; Social Services; and Transportation, Business, and Housing.
The Office was originally founded when the JLBC appointed the first "Legislative Auditor" on October 8, 1941 to assist with the state budgeting process. Because it was frequently confused with the state auditor, the title was changed to "Legislative Analyst" in 1957.
Historically, one of the most important responsibilities of the LAO has been to analyze the annual Governor's budget and publish a detailed review at the end of February. In recent years, the office has presented 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 offered its recommendations for legislative action. In order to provide the Legislature with timely advice on these matters, the LAO has published its budget comments and advice in the form of separate written reports, handouts for hearings, and entries on a Web-based online list, all of which are available at its website, www.lao.ca.gov. These documents help set the agenda for the work of the Legislature's fiscal committees in developing a state budget. Staff of the office work with these committees throughout the budget process and provide public testimony on the office's recommendations.
More generally, the office is a staff resource to all legislators. The LAO also 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.