Immediately following adoption of Proposition 13 in California in June of 1978, the state legislature adopted a Bail-Out program which included procedures for monitoring the detrimental effects of disproportionate reductions in public health, inpatient and outpatient county budgets. For a variety of reasons, the methodology and procedures employed failed to reveal the adverse effects of Proposition 13 on health services. This paper deals with the actual and potential role of health systems agencies (HSAs) in monitoring such effects, commenting in public hearings on budget review and, in general, playing a policy analysis role that links local government with the citizenry on the one hand and the state government on the other. In addition to identifying the weakness of the State's monitoring effort in identifying negative effects in program analysis and staffing reductions, the findings point out the limited role of HSAs. Specific recommendations are offered for improvement of HSA involvement in future resource allocation planning in California and the United States as a whole.