Reason Foundation

Recent Research and Commentary

California Budget Follies: IOUs and 1-in-4 Debt Default Risk

July 3, 2009, 12:52pm

Leonard Gilroy

Per Forbes, the markets are betting that there's a 1-in-4 chance that California will default on its debt payments in the next five years. And now it's issuing IOUs to cover ongoing operations.

California Schools Could Save $750 Million by Outsourcing Janitorial, Transportation Services

June 30, 2009, 10:55am

Lisa Snell

Outsourcing non-instructional support services, such as transportation, food or janitorial and maintenance services, is a management tool used by school boards nationwide, because it allows them to sharpen their focus on providing core educational services while simultaneously right-sizing the academic bureaucracy. In Anchorage, Alaska, school board members recently voted to extend an outsourcing contract for custodians that saved the district $1.7 million a year. Board member Colleen Hamblen pointed out that "$1.7 million will buy us a lot of teachers in this budget, in any budget."

Lift Restrictions on School Outsourcing in California

Other states and school districts are saving millions by contracting out non-instructional support services

June 30, 2009

Lisa Snell

In 2009, school districts across the nation are utilizing outsourcing to reduce costs. Troy Public Schools in Michigan is privatizing transportation services to save an estimated $2.5 million over the next three years. The Roanoke, Virginia, city school board voted to contract with a Pennsylvania-based bus company to provide transportation services at a cost reduction of approximately $250,000 annually.  In Columbus, Ohio, the school district is contracting out food operations to bring the indebted department back to solvency. In Leominster, Massachusetts, they are in the process of selecting a private company to take over the school lunch program.

State Governments Face Deficits and Fiscal Trouble Because of Spending

From 2002 to 2007, state spending rose 50 percent faster than inflation

April 9, 2009

Adam Summers, Michael Flynn

From 2002 to 2007, overall spending rose 50 percent faster than inflation. Education spending increased almost 70 percent faster than inflation, even though the relative school-age population was falling. Medicaid and salaries for state workers rose almost twice as fast as inflation.

California's Spending by the Numbers

A Historic Look at State Spending from Gov. Pete Wilson to Gov. Arnold Schwarzenegger

February 18, 2009

Adam Summers

Since 1990-91, California's spending has skyrocketed 181 percent, from $51 billion in FY 1990-91 to $144 billion in FY 2008-09. Politicians often blame falling revenues for California's budget woes, but state revenues jumped 167 percent between 1990 and 2008. If California had simply limited its spending increases to the 4.38 percent average increase in the state's consumer price index and population growth each year since FY 1990-91, the state would be sitting on a $15 billion surplus right now.

The California High-Speed Rail Proposal: A Due Diligence Report

Policy Study 370

September 1, 2008

Joseph Vranich, Wendell Cox, Adrian Moore

With the high costs of building in California and the history of cost overruns on rail projects, the final price tag for the complete high-speed rail system will actually be $65 to $81 billion, according to the Reason Foundation report.

And while the Rail Authority forecasts between 65 and 96 million intercity riders by 2030, the due diligence report finds these projections are dramatically inflated. After compiling numerous ridership studies previously conducted for California rail systems, the study demonstrates the state can expect 23 million to 31 million riders a year in 2030.

Any failure to meet the Rail Authority's lofty ridership projections would force ticket-price increases, further cutting ridership, or require taxpayer subsidies to cover the financial shortfall, adding to future budget deficits. The due diligence report finds "the San Francisco-Los Angeles line alone by 2030 would suffer annual financial losses of up to $4.17 billion."

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