|
ESCALATION ANALYSIS
What follows is a new escalation review using the California Consumer Price Index (CCPI) for "all items." This index was selected as it is required by Government Code section 14837 (d)(3). A copy of the index is included as ATTACHMENT.
In choosing the factor to use between "all urban consumers" and "urban wage earners and clerical workers," the factor for "all urban consumers" was selected because:
- It is more likely to apply to the broad spectrum of businesses seen in California including those certified by the Department of General Services (DGS); and
- There was no reason to emphasize the involvement of clerical workers over other types of workers.
The escalation factors used are:
- For small business, the "annual" factor is used for the baseline period of 1999 (the year the statute was enacted for small business.)
- Microbusiness is shown escalated from baseline year of 2002 (when that new status was created.)
- For the current period, since the year is not yet complete, the monthly factor for August 2005 was used as it is the most current quarter for which data is available.
The analysis was performed using an escalation formula that was included in a Procurement Division procedure for price analysis (that was modeled after common industry practiced, including those used by the federal government.) The formula to determine the current value of the average annual receipts as impacted by actual inflation in California is:
New index amount/ Old index amount = escalation factor
Old $ amount x escalation factor = escalated $ amount
The calculations are shown in the table below:
|
Small Business |
Microbusiness |
| New index |
(August 2005) = 203.5 |
(August 2005) = 203.5 |
| Old Index |
(1999 Base) = 168.5 |
(2002 Base) = 186.1 |
| Escalation Factor = |
203.5/168.5 = 1.2077 |
203.5/1.861 = 1.0935 |
| Escalated Dollar Amount (Estimate): |
$10 million x 1.2077 = $12,077,151 |
$2,500,000 x 1.0935 = $2,733,745 |
| Recommendation: |
$12 million |
$2.75 million |
ATTACHMENT
CALIFORNIA CONSUMER PRICE INDEX (1955-2005)
ALL ITEMS (1982-1984 =100)
| Year |
Month |
All Urban |
Urban Wage Consumers Earners and Clerical Workers |
| 2005 |
August |
203.5 |
197.1 |
| 2005 |
June |
201.3 |
194.6 |
| 2005 |
April |
202.0 |
195.5 |
| 2005 |
February |
199.1 |
192.2 |
| 2005 |
Annual |
195.4 |
188.9 |
| 2004 |
December |
197.0 |
190.5 |
| 2004 |
October |
198.0 |
191.6 |
| 2004 |
August |
195.3 |
188.9 |
| 2004 |
June |
195.8 |
189.6 |
| 2004 |
April |
194.4 |
187.9 |
| 2004 |
February |
193.1 |
186.4 |
| 2003 |
Annual |
190.4 |
183.8 |
| 2003 |
December |
190.1 |
183.3 |
| 2003 |
October |
191.0 |
184.2 |
| 2003 |
August |
190.3 |
183.9 |
| 2003 |
June |
189.9 |
183.2 |
| 2003 |
April |
191.1 |
184.6 |
| 2003 |
February |
190.5 |
183.7 |
| 2002 |
Annual |
186.1 |
179.0 |
| 2002 |
December |
187.2 |
180.4 |
| 2002 |
October |
187.5 |
180.4 |
| 2002 |
August |
186.8 |
179.6 |
| 2002 |
June |
185.9 |
178.9 |
| 2002 |
April |
186.1 |
178.9 |
| 2002 |
February |
184.1 |
176.9 |
| 2001 |
Annual |
181.7 |
174.7 |
| 2001 |
December |
181.8 |
174.6 |
| 2001 |
October |
183.0 |
175.9 |
| 2001 |
August |
182.9 |
175.7 |
| 2001 |
June |
183.2 |
176.3 |
| 2001 |
April |
181.0 |
174.1 |
| 2001 |
February |
179.8 |
172.8 |
| 2000 |
Annual |
174.8 |
168.1 |
| 2000 |
December |
177.3 |
170.6 |
| 2000 |
October |
177.3 |
170.5 |
| 2000 |
August |
175.6 |
R/168.9 |
| 2000 |
June |
R/174.0 |
167.4 |
| 2000 |
April |
173.6 |
R/167.1 |
| 2000 |
February |
R/172.0 |
165.3 |
| 1999 |
Annual |
168.5 |
162.2 |
| 1999 |
December |
170.0 |
163.8 |
| 1999 |
October |
170.2 |
163.7 |
| 1999 |
August |
169.0 |
162.7 |
| 1999 |
June |
167.8 |
161.6 |
| 1999 |
April |
168.8 |
162.6 |
| 1999 |
February |
166.5 |
160.2 |
| 1999 |
Annual |
163.7 |
157.6 |
| 1998 |
December |
165.1 |
159.0 |
| 1998 |
October |
164.9 |
158.6 |
| 1998 |
August |
164.3 |
157.9 |
| 1998 |
June |
163.6 |
157.6 |
| 1998 |
April |
163.1 |
157.0 |
| 1998 |
February |
162.1 |
156.2 |
| 1997 |
Annual |
160.5 |
155.0 |
| 1997 |
December |
162.0 |
156.3 |
| 1997 |
November |
161.7 |
156.0 |
| 1997 |
October |
161.9 |
156.4 |
| 1997 |
September |
161.2 |
155.6 |
| 1997 |
August |
160.5 |
155.0 |
| 1997 |
July |
160.2 |
154.6 |
| 1997 |
June |
160.0 |
154.5 |
| 1997 |
May |
160.0 |
154.6 |
| 1997 |
April |
160.2 |
154.8 |
| 1997 |
March |
160.0 |
154.5 |
| 1997 |
February |
159.2 |
153.8 |
| 1997 |
January |
158.8 |
153.5 |
| 1996 |
Annual |
157.1 |
152.0 |
| 1996 |
December |
157.9 |
152.6 |
| 1996 |
November |
158.3 |
153.0 |
| 1996 |
October |
158.6 |
153.3 |
| 1996 |
September |
158.0 |
152.8 |
| 1996 |
August |
157.1 |
152.0 |
| 1996 |
July |
157.4 |
152.4 |
| 1996 |
June |
156.6 |
151.7 |
| 1996 |
May |
157.1 |
152.3 |
| 1996 |
April |
156.9 |
152.0 |
| 1996 |
March |
156.3 |
151.3 |
| 1996 |
February |
155.6 |
150.6 |
| 1996 |
January |
155.2 |
150.2 |
| 1995 |
Annual |
154.0 |
149.1 | |
