GOOD AFTERNOON WE ARE BEGINNING
OUR FIRST HEARING OF THE.
TWENTY EIGHTEEN TWENTY NINETEEN
BUDGET CONFERENCE COMMITTEE
MADAM SECRETARY COULD YOU CALL
THE ROLL.
ASSEMBLYMEMBER TING HERE
ARAMBULA. BLOOM HERE
CHAVEZ.
OBERNOLTE HERE.
SENATOR MITCHELL HERE.
MORLOCK.
NIELSEN.
ROTH
SKINNER.
CRIME SPREE.
THANK YOU VERY MUCH.
.
AND VERY EXCITING TO JOIN AGAIN
WITH OUR CONFERENCE COMMITTEE
IT'S OUR ANNUAL RITE OF PASSAGE.
.
TODAY WE ARE GOING TO BE.
JUST DOING ARE A VERY BROAD
INTRODUCTION INTO OUR HEARING.
OVER THE NEXT.
THE DAY WILL BE COVERING FOR
MAJOR AGENDA ITEM SO I.
ONE IN TERMS OF EDUCATION. TO
HELP HIM SERVICES THREE
RESOURCES AND LASTLY FOR GENERAL
GOVERNMENT AND PUBLIC SAFETY
AFTER WE GO THROUGH THIS FIRST.
OF FOR AGENDA ITEMS WE WILL RE
ISSUING THE GENDER AND GO
THROUGH. A DIFFERENT ITEMS THAT
ARE.
MUCH MORE SPECIFIC IN NATURE.
JUST IN TERMS OF COUPLE
HOUSEKEEPING ITEMS I KNOW THAT.
MOST OF OUR ALL OF US PLAN ON
VOTING IN GOING HOME FOR THE
TUESDAY PRIMARY SO IF YOU COULD.
PLEASE LET US KNOW WHAT YOUR
SCHEDULE'S ARE FOR NEXT MONDAY
AS WELL AS COMING BACK ON
WEDNESDAY WOULD VERY MUCH
APPRECIATE SO WE CAN.
FIGURE OUT WHAT TIME TO.
START CONFERENCE MONDAY IT
WOULD HAVE TO START CONFERENCE
ON START YES YES.
S. TO START. SO WE CAN USE WE
CAN COORDINATE SCHEDULES AND DIE
ACT ACCORDINGLY TOMORROW WE'RE
GONNA START AT TEN THIRTY A. M..
SO PLEASE SOME OF PLEASE CHECK
AND ON THE SENATE OR ASSEMBLY
FLOORS. OF THE GOAL IS TO FINISH
BY NEXT WEEK.
WE DO PLAN GOING ON GOING LATE
WEDNESDAY AND THURSDAY EVENING
OF NEXT WEEK SO PLEASE. PLAN
ACCORDINGLY.
AGAIN WE ARE VERY LUCKY TO BE.
DOING BUDGET CONFERENCE
WHEN REVENUES ARE GROWING.
I KNOW IT WASN'T THAT LONG AGO
WHERE WE FACED A VERY DAUNTING
DEFICITS VERY TOUGH ECONOMIC
TIMES. AND THE BUDGET CONFERENCE
DISCUSSIONS WERE VERY VERY
DIFFERENT.
SO I FEEL VERY ON HONORED AND
VERY THANKFUL THAT WE ARE ABLE
TO HAVE THIS DISCUSSION DURING
THESE TIMES UPON. CLEARLY WE HAD
A VERY STRONG FISCAL YEAR.
THE BUDGET THAT THE SENATE
PROPOSED THE ASSEMBLY PROPOSES
WAS WHAT THE GOVERNOR PROPOSED A
SHARE OF OF NUMBER OF
SIMILARITIES OF VERY VERY.
SHARED VERY SIMILAR SHARED
VALUES. ON.
IN TERMS OF THE ASSEMBLY
PROPOSAL WE HAVE A NUMBER OF.
CLEAR PRIORITIES ONE WAS
FEELING THE RAINY DAY FUND.
TO WAS SO FULFILLING OUR PROMISE
OF FULLY FUNDING THE LOCAL
CONTROL FUNDING FORMULA. AND.
MAKING SURE WE FULLY FUNDED K.
THROUGH TWELVE EDUCATION. ON
THIRD WE WANTED TO ENSURE THAT
WE CONTINUE TO MAKE PROGRESS TO
EXPAND HEALTH ACCESS TO ALL
CALIFORNIANS. WITH NINETY TWO
PERCENT OF CALIFORNIA'S NOW
HAVING A ACCESS TO HAVE OTHER
HEALTH INSURANCE WE THOUGHT T
WAS A TIME TO CONTINUE TO MAKE.
PROGRESS FOR THE FINAL EIGHT
PERCENT.
FORCES OR HOMELESSNESS IS A
CRISIS THAT WE ARE FACING NOT
JUST IN OUR URBAN AREAS WHERE IS
TRADITIONALLY BEEN THE LAST
THIRTY YEARS BUT REALLY. ALL
ACROSS CALIFORNIA IT'S.
USED TO BE A VERY COMMON TO SEE
HOMELESS FOLKS IN RURAL AREAS
AND SMALLER CITIES AND NOW IT'S
ALMOST COMMONPLACE.
AND GIVEN THE STATE OF THE
CRISIS WE THOUGHT IS VERY
APPROPRIATE FOR THE STATE TO. A
STEP PAN IN REALLY WORK WITH
CITIES AND COUNTIES TO.
FIVE SOLUTIONS AROUND EMERGENCY
SHELTER AND THEN LONG TERM
PERMANENT SHELTER.
ITEM FIFTH.
SO WE WANTED TO ENSURE THAT WE
CONTINUED OUR INVESTMENT IN
EARLY CHILDHOOD EDUCATION. I
KNOW TWO YEARS AGO WE MADE SOME
SIGNIFICANT PROGRESS.
WE
OPPOSED TO BOTH HOUSES PROPOSE
SOME ARE SIGNIFICANT INVESTMENTS
AND THAT'S AN AREA WHERE WE HOPE
TO. BE ABLE TO REACH AGREEMENT.
AND LASTLY I TO THE INSTITUTIONS
THAT I KNOW MOST CALIFORNIANS
ARE PROTESTANT ARE REALLY OUR
UNIVERSITY CALIFORNIA IN OUR
CALIFORNIA STATE UNIVERSITY
SYSTEM.
THOSE TWO INSTITUTIONS DESERVE
INVESTMENT.
WE'VE BEEN HEARING.
NOT ONLY THE STUDENTS LOT A
CLEAR BUT ALSO THE FACULTY AND
STAFF IN THE IN THE
ADMINISTRATIVE LEADERSHIP THERE.
AND WE WANT TO HER ARM ECHO
THEIR.
THEIR SENTIMENT FOR FURTHER
INVESTMENT AND I THOUGHT BELIEVE
THAT PROPOSALS PROPOSALS WERE.
PUT FORTH IN BOTH THE SENATE
AND THE ASSEMBLY PROPOSALS SO
AGAIN.
LEGISLATIVE PROPOSALS THAT HAVE
BEEN PUT FORWARD I THINK ARE
GREAT START TO OUR CONFERENCE
COMMITTEE PROCESS.
SO WE HAVE A LOT MORE SOME
LITERACY WE DO HAVE DIFFERENCES
AND.
DURING THE NEXT WEEK OR SO WE
PLANNED TO IRON ALL OF THOSE OUT.
TO EAT DOES WELL AS HAVE
DISCUSSIONS WITH THE GOVERNOR'S
OFFICE DEPARTMENT OF FINANCE IN
THE GOAL WILL BE TO HAVE.
YOU KNOW IN AGREEMENT SOMETIME
TOWARD THE END OF NAFTA NEXT
WEEK IF ALL GOES WELL.
US SO VERY EXCITED AGAIN TEH BE
HERE HONOR TO BE CHAIRING BUDGET
CONFERENCE AGAIN AND JUST WANTED
TO. OPEN UP TO SENATOR MITCHELL
TO SEE IF SHE HAD ANY OPENING
COMMENTS.
LET'S ROCK AND ROLL.
THE LOVE A SHORT SHORT AND SWEET
DEPARTMENT OF FINANCE.
MISS COST.
I'M SORT OF THE CUBICLE OF
MISTER TAYLOR FIRST MISTER
TAYLOR THANK YOU WAY OUT.
THANK YOU MISTER CHAIR.
MADAM CHAIR MEMBERS.
YOU HAVE A VERY SHORT HAND OUT
HOPEFULLY IN FRONT OF YOU.
ENTITLED CONFERENCE COMMITTEE
OVER YOU I'M JUST GONNA GO TO
THAT. VERY QUICKLY BY THIS IS
INTENDED AS THE CHAIR SUGGESTED
VERY BIG PICTURE OVERVIEW OF THE
PLANS. WERE THE KEY ASSUMPTIONS
HOW TODAY HOUSES
COMPARE AND THEN HOW TO THE
HOUSES BUDGETS COMPARE WITH THE
ADMINISTRATION'S SO REALLY JUST
TO GIVE YOU A BIG PITCHER YOU WE
HAVE A LOT MORE DETAIL IN YOUR
AGENDA ON VARIOUS ITEMS THAT.
I KNOW I KNOW WILL BE MORE
HELPFUL TO YOU AS YOU A TICKET
THOSE ON INDIVIDUALLY.
UNDER OF THE FIRST PAGE
COMPARING THE GENERAL FUND
CONDITION THIS IS A PRETTY BASIC
TABLE. THAT YOU'LL FIND IN
ALMOST ANY FINANCE REALLY A
DOCUMENT THAT GIVES YOU THIS
SUMMER NUMBERS FOR WHERE YOU ARE
IF YOU LOOK AT THE SECOND LINE
REBBETZIN TRANSFERS. YOU SEE
THAT THE SENATE ASSEMBLY ARE
HIGHER THAN THE.
AT ADMINISTRATION THAT'S
BECAUSE THEY ARE YOU HAVE
ADOPTED OUR REVENUE ESTIMATES I
GO INTO A LITTLE MORE IN JUST A
SECOND. AND AS A RESULT YOUR
EXPENDITURES ARE ALSO HIGHER.
BECAUSE THEY'RE SIMILAR AMOUNTS
YOU GO DOWN TO THE RESERVES AND
IS THE CHAIR NOTED ALL THREE THE
ADMINISTRATION IN BOTH HOUSES
HAVE RESERVE LEVELS THAT ARE
OVER SEVENTEEN BILLION DOLLARS.
THE SENATE HAS ACTUALLY
INCREASED RESERVES.
THEY HAVE USED.
I KNEW RESERVE THAT THEY AS A
SAFETY NET RESERVE THAT'S NOT IN
MONIES THAT ARE IN THE BSA
THEY'RE NOT IN EFFECT PROTECTED
UNDER THE RULES OF PROPOSITION
TWO. BUT THEY ARE UP OUR
UNDERSTANDING IS THE INTENT IS
TO SET THOSE ASIDE AND THEY
WOULD BE USED. IN IN SIMILAR
FASHION AS OTHER RESERVES.
TARGETED TOWARDS SHORTFALLS IN
HEALTH AND HUMAN SERVICES
PROGRAMS IN THE FUTURE BUT IT IS
IT IS A RESERVE AND SO WE'VE
SHOWN IT DOWN THERE. THE
ASSEMBLY TOOK A SLIGHTLY
DIFFERENT ACTION.
THEY'VE SET UP WHAT THEY CALL
THE.
.
THE BUDGET DEFICIT SAVINGS
ACCOUNT THESE ARE FUNDS THAT THE
LEGISLATURE MAINTAINS A LITTLE
MORE CONTROL THROUGHOUT THE
FISCAL YEAR AT THE END OF MAY
THOUGH IF ALL THE ESTIMATES ARE
EXTRA WHAT WE THINK THEY ARE.
THAT MONEY WHICH IS GOING TO THE
BSA AND THE TOTAL WOULD BE NO
DIFFERENT FROM WHAT THE
ADMINISTRATION HAS.
.
GIVEN THESE RESERVES AND THESE
LEVELS ARE ALMOST UNPRECEDENTED
THESE ARE. VERY HEALTHY RESERVE
LEVELS
AND I THINK THIS STATE HAS DONE
AN EXCELLENT JOB THE LEGISLATURE
WORKING WITH THE GOVERNOR.
TO ESTABLISH THIS LEVEL RESERVE
LEVELS OF OF RESERVES.
.
WITH THESE YOU COULD LIKELY
WITHSTAND A MILD RECESSION.
WITHOUT HAVING TO TAKE.
MUCH.
SIGNIFICANT ACTION AS FAR AS
CHANGING YOUR SPENDING LEVELS
ARE YOUR REVENANTS.
A MILD RECESSION.
ANYTHING MORE THAN THAT IT WOULD
STILL PROVIDE YOU QUITE A BIT OF
TIME.
TO ADJUST TO ANY DOWNTURN.
SO THE THESE ARE SIGNIFICANT
LEVELS OF RESERVES.
YOU CAN HAVE DISCUSSIONS WHETHER
YOU WANT TO HAVE MORE. OR NOT
YOU CAN SEE THE SENATE IS A
LITTLE BIT HIGHER THAN THE
ASSEMBLY PLAN.
BUT BUT THESE ARE.
HEALTHY LEVELS AND IT SHOWS
INCREDIBLE PROGRESS OVER RECENT
YEARS.
YOU ALSO ANOTHER WAY THAT YOU
HAVE PROTECTION AGAINST DOWNTURN
IN ADDITION TO RESERVES ARE ONE
TIME SPENDING.
BECAUSE IF YOU HAVE ONE TIME
SPENDING. THAT GOES AWAY IN THE
NEXT YEAR YOU DON'T HAVE TO MAKE
AS MANY ADJUSTMENTS.
SO ONE THING TO KEEP.
THE COGNITIVE IS HOW MUCH ONE
TIME SPENDING TO HEAR.
NOW THE ADDITIONAL COMMITMENTS
THAT THE SENATE MADE ON TOP OF
THE GOVERNOR'S BUDGET. THEY MAKE
ABOUT A THIRD A LITTLE OVER
THIRTY ONE TIME THE ASSEMBLY
MAKES ABOUT HALF OF THEIR.
AUGMENTATIONS AND ONE TIME
JUST SOMETHING TO KEEP IN MIND.
NOW OFF SETTING THAT IS THAT
EACH HOUSE HAS A LOUD RATHER
LARGE EXPENDITURE THAT GROWS
OVER TIME.
AND AGAIN WE'LL TALK A BIT MORE
ABOUT THAT THIS IN ITS COWARDS
PROPOSAL IS PHASED IN SUCH AS IT
GROWS THE COST GROW OVER TIME.
AND THE HOUSE HAS A ABOUT THE
ASSEMBLY HAS A HEALTH PROPOSAL
THAT WOULD GROW OVER TIME.
NOW THAT DOESN'T MEAN THAT YOU
CAN'T HAVE PROPOSALS THAT GROW
IN THE OUT YEARS.
WHAT IT MEANS IS YOU WANT TO
JUST BE SENSITIVE TO TO EITHER
OF THE SENATE'S APPROACH ON
RESERVES WELL MAYBE WHEN I HAVE
A FEW MORE RESERVES?
OR THE ASSEMBLY IS APPROACHING
ONE TIME MAYBE ONE HAVE SOME
MORE ONE TIME. THESE ARE THE
THINGS THAT YOU BALLOTS IN
MAKING YOUR DECISIONS.
WE GO TO PAGE TWO.
THIS THIS THIS REALLY HELPS
EXPLAIN HOW YOU'RE DIFFERENT
FROM THE GOVERNOR'S.
AND THE HOUSES ARE FAIRLY MUCH
THEY'RE VERY SIMILAR IN HOW THEY
DIFFER FROM THE GOVERNOR. THAT
SINGLE BIGGEST ASSUMPTION IS AS
I MENTIONED YOU'VE TAKEN OUR
ESTIMATES OF REVENANTS.
IT'S ABOUT TWO POINT SEVEN TWO
POINT EIGHT THERE'S A SLIGHT
DIFFERENCE BETWEEN HOUSES.
NOW THAT SEEMS LIKE A LOT OF
MONEY BECAUSE IT IS ESPECIALLY
WHEN YOU'RE THINKING ABOUT
SPENDING. FROM A REVENUE
ESTIMATING PERSPECTIVE.
THIS IS A TWO YEAR DIFFERENCE
IT'S A LITTLE OVER ONE PERCENT A
YEAR.
THAT'S NOT A HUGE DIFFERENCE
BETWEEN THE ADMINISTRATION AND
US.
AND IT'S JUST THAT WE HAVE
DIFFERENT METHODOLOGIES OF
ESTIMATING REVENUES.
AND YOU DECIDED TO GO WITH OURS
SO THAT GIVES YOU ALMOST THREE
BILLION DOLLARS IN ADDITIONAL
RESOURCES NOW AS A RESULT OF
TAKING THOSE REVENUES YOU HAVE
SOME ADDITIONAL RESERVE
REQUIREMENTS AS YOU SEE ONLINE
TO. SOME ADDITIONAL PROPOSITION
TO DEBT REQUIREMENTS THOSE
OFFSET YOUR GAINES.
YOU'D MADE ANOTHER ASSUMPTION
BOTH HOUSES THAT YOU WOULD USE
OUR PROPERTY TAX REVENUES.
THAT DOESN'T CHANGE PROPOSITION
NINETY EIGHT AT ALL.
IT JUST CHANGES THAT THE
CONSISTENCY THE MAKE UP OF
BETWEEN GENERAL FUND IMPROPER
TAXES SO YOU HAVE LESS GENERAL
FUND THAT THAT YOU HAVE TO
DEDICATE TOWARDS NINETY EIGHT.
THAT'S FREED UP IN YOUR
AVAILABLE FOR OTHER PURPOSES.
THEN ONE OTHER KEY CHANGE IN
THINKING ABOUT WHAT WHAT'S YOUR
TOTAL AMOUNT YOU HAVE DIFFERENT
FROM THE GOVERNOR. IS THAT BOTH
HOUSES REJECTED SOME OF THE
GOVERNOR'S PROPOSALS.
PARTICULARLY IN THE AREA OF
INFRASTRUCTURE AND DEFERRED
MAINTENANCE.
GO TO THE BOTTOM LINE THERE
ADDITIONAL RESOURCES AVAILABLE
THE SENATE HAS ABOUT THREE AND A
HALF BILLION ALMOST.
THE ASSEMBLY HAS FOUR BILLION ON
TOP OF WHAT THE GOVERNOR HAD.
WHAT DID YOU DO WITH THOSE THE
HOUSES DID A LOT OF THINGS THE
SAME?
BUT THE SENATE AS YOU CAN SEE
TOOK FROM THAT THAT THREE POINT
FOR THAT THEY HAD THEY SET UP
THAT NEW RESERVE THAT I TALKED
ABOUT.
THAT'S SET ASIDE.
A RESERVE
FOR THE SAFETY NET.
THEN THEY MADE NEW COMMITMENTS
AND THESE ARE PRIMARILY
EXPENDITURES THERE ARE SOME
REVENUE REDUCTIONS TO SOME OF
THAT'S WHY WE USE THE WORD
COMMITMENT.
OF TWO POINT NINE BILLION.
NOW ANYBODY DOING THEIR QUICK
MATH WOULD SEE THAT WELL THAT'S
THREE POINT NINE IN NEW. AND YET
WE HAVE THREE POINT FOR AN
ADDITIONAL RESOURCES AND WHAT
HAPPENS IS THAT'S WHY IF YOU
LOOK ON THE PRIOR PAGE.
THEIR REGULAR RESERVE OUR SFU
YOU AS WE REFER TO IT. IS
ACTUALLY LESS THAN THE
ADMINISTRATION'S.
I THE ASSEMBLY JUST MAKES FOUR
BILLION IN NEW COMMITMENTS.
SO IF YOU GO THE LAST PAGE THIS
REALLY SHOWS.
SOME OF THE REALLY BIG PIECES OF
THOSE LEGISLATIVE AUGMENTATIONS
TO THE GOVERNOR'S BUDGET.
AND.
IT IT'S NOT GOING TO TELL YOU
THE WHOLE STORY FOR EXAMPLE ON
HOMELESSNESS THE FIRST ITEM THAT
WE HAVE. THESE ARE JUST EIGHTEEN
NINETEEN NUMBER SO IT DOESN'T
SHOW THE SENATE'S PLAN WHICH AS
A FOUR YEAR PLAN. YOU HAVE A
TABLE LATER ON IN YOUR AGENDA
THAT WILL GIVE YOU ALL THAT
DETAIL.
BUT WHAT WE TRY TO DO IS TO SHOW
YOU THE AMOUNT IN EIGHTEEN
NINETEEN PLUS ENTRANCE IT SHOWS
WHAT IS ONGOING IN ONGOING WE
MEAN ON A PERMANENT BASIS NOT
LIKE THE FOUR YEAR FOR
HOMELESSNESS.
JUST SO YOU CAN GET AN IDEA OF
WHEN ARE YOU MAKING ONE TIME
COMMITMENTS WHEN ARE YOU MAKING
ONGOING COMMITMENTS.
I THINK WHAT IS IS A. STANDS OUT
IN THIS LIST IS HOW MANY.
SIMILARITIES THERE ARE BETWEEN
THE HOUSES.
BOTH SIDES
PROVIDED A LOT MORE MONEY TO
HOMELESSNESS.
BOTH SIDES PROVIDED MORE MONEY
FOR HEALTH CARE. THE ASSEMBLY
CLEARLY WENT FURTHER.
SENATE IS THE ONLY ONE TO TAKE
ACTION ON THE CAL WORKS IN SSI
GRANTS BOTH RAISING THEM AND
PROVIDING COLIN'S.
THE ASSEMBLY DID MORE ON OTHER
AREAS IN HUMAN SERVICE THE
SERVICES NOTHING REAL BIG
THERE'S A LOT OF SMALLER THINGS
THAT MAKES UP THAT. THREE
HUNDRED SIX MILLION THAT WE SIDE
UNDER THAT.
BOTH SIDES HAVE SIGNIFICANT
AUGMENTATIONS FOR THE
UNIVERSITIES
THE CHAIR NOTED BOTH SIDES
BASICALLY DO THE SAME THING FOR
CHILDCARE ON AN ONGOING BASIS.
THE ASSEMBLY ALSO PUT IN SOME
ONE TIME MONEY.
BOTH SIDES HAVE ONE TIME MONEY
FOR REENTRY DIVERSION PROGRAMS
AND THE CENSUS.
AND THE SENATE IS THE WHAT IS
THE ONLY SIDE THAT DID A TO GET
ADDITIONAL ACTION TO AUGMENT.
THE JUDICIAL BRANCH.
SO THOSE ARE YOU REALLY THE BIG
PIECES SUBURBS ADDITIONAL.
THOSE NEW RESOURCES AND HOW YOU
WERE THEY WERE USED BY THE TWO
HOUSES.
HOT WITH THAT MISTER CHAIRMAN
OBVIOUSLY MY COLLEAGUES WILL BE
HERE TO HELP YOU THROUGH YOUR
AGENDA AND WE'RE HERE AS ALWAYS
TO PROVIDE. WHATEVER ASSISTANCE
WE CAN TO HELP YOU GET A
CONFERENCE REPORT.
THANK YOU MISTER WITH COST.
THANK YOU MISTER CHAIRMAN WAS
ANY COST WITH THE DEPARTMENT OF
FINANCE I'LL TRY NOT TO
DUPLICATE THE ANALYST TESTIMONY
I AM JUST PROVIDING A BIG
OVERVIEW BUT I WILL PROVIDE.
SOME COMMENTS FROM THE
ADMINISTRATION SOME OF THE BIG.
ITEMS THAT HE'S REFERENCE AS
FAR AS REVENUES EXPENDITURES AND
RESERVE FUNDS WHICH ARE REALLY
KIND OF THE KEY STRUCTURES OF
ANY BUDGET.
ON AB AND ASSIST TESTIFIED AS
I'VE TESTIFIED IN BOTH OF THE
RESPECTIVE HOUSES A THERE ARE
SIGNIFICANT DIFFERENCES IN THE
REVENUE ASSUMPTIONS BETWEEN THE
ADMINISTRATION AND AND AND THE
ADOPTED BUDGET. ON ITS ROUGHLY
TWO POINT SEVEN BILLION IS THE
ANALYST'S NOTES WITH A SLIGHT
DIFFERENCE BETWEEN THE HOUSES
BEHIND THE ASSEMBLY DID NOT.
ADOPT THE ALEJO'S CORPORATION
TAX.
I'M SO THERE'S A SLIGHT DOLLAR
DIFFERENCE THERE.
I THINK OUR SERIOUS CONCERNS
ADOPTING AN OVERLY OPTIMISTIC
REVENUE FORECAST ARE THAT.
MUCH OF THE DIFFERENCE I'M AT
THE HOUSE POINTS OUT BY A
PERCENTAGE BASIS.
IT DOESN'T SEEM LIKE A A BIG
DOLLAR AMOUNT HOWEVER THE SOURCE
OF REVENUE THAT IS UNDERLYING
THE DIFFERENCE IS THE PERSONAL
INCOME TAX AND CAPITAL GAINS
BOTHOF WHICH ARE EXTREMELY
VOLATILE. AND HAD TRADITIONALLY
VERY DIFFICULT TO PREDICTS.
ON AS SUCH AND WE'VE OFTEN NOTED
ONE PERCENT OF TAXPAYERS PAY
NEARLY FIFTY PERCENT OF THE
PERSONAL INCOME TAX IN THE STATE.
SO THAT GIVES YOU AN
UNDERSTANDING OF HOW ON
SENSITIVE THAT PARTICULAR
REVENUE SOURCES.
THE LA OWES REVENUE FORECAST AND
FINANCE FORECAST BOTH PROJECT
HIGH GROWTH IN CAPITAL GAINS
WITH.
BOTH PROJECTIONS ARE MAKING
THEM SUBJECT TO PRETTY
SIGNIFICANT DOWNSIDE RISK.
WE WOULD KNOW THAT THE CURRENT
ECONOMIC EXPANSION IS NEARING.
THE LONGEST IN HISTORY WE'VE
LISTED POTENTIAL RISKS TO THE
REVENUE FORECAST.
THAT INCLUDE A RECESSION STOCK
MARKET CORRECTION AND THE
FEDERAL ARE GOVERNMENT SHIFTING
COSTS DOWN TO THE STATE AS WELL
AS TRADE WARS.
THE FEDERAL GOVERNMENT REST CABS
INTENSIFIED SINCE WE RELEASED IN
JANUARY UNTIL NOW WITH THE
FEDERAL GOVERNMENT HAVING
PROPOSALS FOR RECISIONS SO. THAT
RISK ITSELF HASN'T CHANGED BUT
WE WOULD ARGUE THAT HAS
INTENSIFIED AND IT DOES I POSE A
THREAT ONTO THE OVERALL. BUDGET
WENT DOWN.
IN THE EXPENDITURES I WILL GIVE
YOU A PREVIEW OF WHAT YOU'LL
HEAR ME SAY LIKELY THROUGHOUT
MUCH OF CONFERENCE WHICH IS THAT.
THE PROPOSED AUGMENTATIONS
CANNOT B SUPPORTED BY THE
ADMINISTRATION GIVEN THE
RAVENOUS AND SO ON MANY TIMES
THAT WILL BE WITHOUT PREJUDICE
TO A PARTICULAR PROPOSAL
OBVIOUSLY. FOR WORKING OFF A
DIFFERENT TOTAL NUMBERS ON THE
REVENUE SIDE.
THE ADMINISTRATION WANTS TO
ENSURE THAT ANY OF THE
EXPENDITURES THAT ARE INCLUDED
IN THE BUDGET REALLY ALIGNED
WITH OUR HOW MORE REASONABLE
REVENUE ASSUMPTIONS PREVENT
PUSHING.
THE BUDGET OUT OF BALANCE AND TO
PROTECT AGAINST MORE SIGNIFICANT
BUDGET CUTS IN THE FUTURE.
THE TYPES OF EXPENDITURES ARE
IMPORTANT IN THE STRUCTURE OF
THE BUDGET WHILE AND ALICE
POINTED OUT AND YOU KNOW THE
DIFFERENCE BETWEEN ONGOING AND
ONE TIME EXPENDITURES IN THE
ADMINISTRATION'S BUDGET WE'VE
REALLY LIMITED ON GOING.
EXPENDITURES.
SO THAT WE CAN AVOID.
CUTS TO PROGRAMS WHEN THERE IS
A RECESSION.
ON EACH HOUSE IS INCLUDED
BILLIONS IN ADDITIONAL NON
NINETY GENERAL FUND EXPENDITURES.
IN SOME CASES THE ADMINISTRATION
BELIEVES THAT THE COSTS ARE
SIGNIFICANTLY UNDERSTATED BASED
ON WHAT THE HOUSES OF ADOPTED.
THESE NON NINETY EIGHT GENERAL
FUND ONGOING EXPENDITURES ALSO
GROW. PRETTY SIGNIFICANTLY IN
THE OUT YEARS SPECIFICALLY AND
TWENTY TWENTY ONE TWENTY TWO.
WITH THE SENATE BUDGET ONGOING
SPENDING AT LEAST FOUR POINT
FIVE BILLION AND THE ASSEMBLIES
AT AT LEAST TWO.
IT'S BILLION.
LET'S THEY WANTED TO TALK
BRIEFLY ABOUT THE RESERVES WHICH
IS THE ADMINISTRATION HAS
FREQUENTLY DISCUSSED THE NEED
FOR ROBUST RESERVES ONTO
ASSESSED AND WEATHERING THE NEXT
RECESSION.
WE ARE PLEASED THAT EACH OF THE
HOUSES AS FULLY FUNDED THE RAINY
DAY FUND AT THAT CONSTITUTIONAL
TARGET OF TEN PERCENT.
I'M AS THE ANALYST NOTED THE
SENATE HAS PROPOSED A SAFETY NET
OF A RESERVE OF ONE BILLION
DOLLARS WHICH WOULD INCLUDE
FUNDING TO HELP PROVIDE SOME
MEASURE OF STABILITY FOR CAL
WORKS AYE WHICH OFTEN FACES CUTS
DURING ECONOMIC DOWNTURNS WHEN I
CASELOAD IS INCREASING.
ARE THE ASSEMBLY HAS PROPOSED A
BUDGET DEFICIT SAVINGS ACCOUNT
WHICH WOULD TEMPORARILY HOLD
SUPPLEMENT A SUBLIMINAL PORTION
OF THE BUDGET YEAR RAINY DAY. UP
FUND DEPOSIT UNTIL JUNE TWENTY
NINETEEN BUT COULD IN THE FUTURE
BE UTILIZED AS ANOTHER RESERVE
FUND TO HELP DURING A RECESSION.
WE WELCOME CONTINUING OUR
CONVERSATIONS WITH THE
LEGISLATURE AS WE MOVE THROUGH
THE CONFERENCE PROCESS.
BUT THAT I'M HAPPY TO ANSWER ANY
QUESTIONS.
THANK YOU MISS COSTA COMING BACK
TO THE COMMITTEE TO ANY OF THE
COMMITTEE MEMBERS WANT TO MAKE.
STATEMENTS AS WELL AS.
QUESTIONS SENATOR MORLOCK.
THANK YOU RICH CHAIR I'LL MOVE
THE SENATE TO OUR
RECOMMENDATIONS.
JUST GETTING JUST KIDDING
WEBSITE BETTER.
I WAS I WAS READING.
OKAY WE SPENT MANY HOURS
TOGETHER LAST YEAR SO WHERE.
THERE THERE IS A.
I DON'T THINK YOU MISTER CHAIR I.
I'M JUST WONDERING MR TAYLOR
HAVING COME FROM THE LOCAL.
SO I DOUBT WHEN WE WENT THROUGH
A RECESSION.
THE STATE WAS REALLY GOOD ABOUT
TAKING LOCAL FUNDS AWAY.
FILL BUDGET GAPS.
AND LOCAL LEVELS CITIES AND
COUNTIES ONLY HAVE MAYBE WILL.
ONE VEHICLE TO RAISE MORE
REVENUE AND THAT'S A SALES TAX
INCREASE WHICH SEEMS TO BE A
LITTLE MORE POPULAR MORE ON. BUT
MORE BALLOTS TO TO RAISE
REVENUES BECAUSE OF GROWING
PENSION COSTS.
IT CENTER SO THEY'RE VERY
LIMITED BUT THE STATE HAS BEEN
ENJOYING.
THIS.
WE USE THE TERM SURPLUS.
SO WE WE GOT GAS TAX WE'VE GOT.
ALL INCOME TAX ALL THE
EVERYTHING IN PLACE IT'S GIVING.
PERHAPS HE'S EXTRA REVENUES.
AND AND I JUST WONDER.
IN TIMES OF BOUNTY IS IT
POSSIBLE FOR THE.
STATE TO GIVE A LITTLE BACK TO
THE LOCAL LEVELS.
BECAUSE THEY'RE GOOD ABOUT
TAKING IT IN TOUGH TIMES
I JUST DON'T KNOW THE LAW BUT I
JUST THOUGHT MAYBE YOU MIGHT
HAVE A PERSPECTIVE.
WELL I THINK AS YOU POINTED OUT
THERE ARE A LOT OF THINGS WE DO
GIVE MORE MONEY BACK TO LOCALS
SCHOOL SPENDING HAS GROWN
SIGNIFICANTLY. THAT GOES TO
LOCAL SCHOOL DISTRICTS EVEN
THOUGH OBVIOUSLY THE STATE. A
CONTROLS A LOT OF THE OVERALL
FUNDING BUT IT HAS INCREASED A
LOT OF THE GAS TAX MONIES GOES
TO LOCAL CONTROL. I KNOW IN SOME
OF THE HEALTH AND SOCIAL SERVICE
CENTER MITCHELL CROPS BECAUSE
BETTER NIGHT BUT THERE'S BEEN
EFFORTS TO INCREASE COUNTY
ADMINISTRATIVE COSTS SO. ICE I
IMAGINE SCATTERED THROUGHOUT
THEIR IF SOMETHING THAT
CERTAINLY HAVE A BENEFICIAL
EFFECT.
IF YOU'RE ASKING SHOULD WE THINK
BROAD MORE BROADLY ABOUT LOCAL
RELIEF.
THAT'S A DIFFICULT ONE FOR ME
TO ADDRESS
I'M NOT SURE WHAT FORM THAT
WOULD TAKE. UP ONE OTHER AREA
WHERE I KNOW THE LEGISLATURE HAS
BEEN REALLY CONCERNED HAS HAS
BEEN ABOUT LOCAL PENSION COST.
BOTH FOR SCHOOLS AND FOR LOCAL
GOVERNMENTS AND I'M NOT SURE
THERE'S MUCH IN. THIS BUDGET ON
THAT BUT THAT IS CERTAINLY A AND
AN AREA THAT'S GOTTEN A LOT OF
CONVERSATION.
WELL I YOU KNOW JUST KIND OF
THINKING OUT OF THE BOX AND NOT
KNOWING ALL THE RULES. IF WE
WORK TO GIVE.
YOU KNOW SINCE WE HAVE WE'RE
TALKING NINE BILLION IF WE WERE
TO SAY LET'S TAKE A LITTLE BIT
OF THAT. GIVE IT TO CITIES AND
COUNTIES BUT JUST SPECIFICALLY
DESIGNATED FOR THEIR PENSION.
PLANS
AS A CONTRIBUTION THAT WAVE WE
SORT OF DO A REBATE BECAUSE A
REYES HAS WHAT YOU GOT TOO MUCH
IN TAX REVENUE. YOU GIVE BACK TO
TAXPAYERS BUT THIS TO BE A WAY
TO GIVE BACK TO THE TAXPAYERS IN
AN INDIRECT WAY. AND IT WOULD
HELP MAYBE CITIES AND COUNTIES
TO KEEP A POLICE OFFICER PER
YEAR TWO OR. SO LONGER AVERAGE
JUST AN IDEA SIDE.
WHEN THERE SHOULD CERTAINLY I
KNOW THERE'S BEEN A LOT OF TALK
ABOUT WHAT MIGHT BE DONE ON
SCHOOL DISTRICTS.
WHO ARE?
CERTAINLY FACING EVEN HIRING
CREASES IN THE OUT YEARS
ABOUT WHAT MIGHT BE DONE TO HELP
THEM AND CERTAINLY BY GIVING A
LOT OF MONEY ON THEY'LL CFF THAT
IS DISCRETIONARY MONEY. THAT
DOES HELP THEM SO IT IT IT'S A
LITTLE HARD TO STOP THE CUT THE
ANSWER YOUR QUESTION BUT IT'S A
GOOD ONE. HOW YOU THINK ABOUT
LOCAL GOVERNMENTS AT THIS DURING
THESE GOOD TIMES
AND I'M WONDERING ON A DIFFERENT
SUBJECT OF? GAS BEES CAN REQUIRE
THAT THE STATE REPORT ON ITS.
COMPREHENSIVE ANNUAL FINANCIAL
REPORT AS OF JUNE THIRTY THIS
YEAR. THE RETIREE MEDICAL
LIABILITY WHICH THE CONTROLLER
SAID IS NINETY ONE AND A HALF
BILLION DOLLARS.
DO WE HAVE
A WAY OF PAYING THAT DOWN OTHER
THAN JUST WITHHOLDING FROM
EMPLOYEES.
WELL I THINK THE WHOLE THE GOOD
THE ADMINISTRATION'S WHOLE PRE
FUNDING PLAN.
THAT HAS BEEN IMPLEMENTED
THROUGH THE VARIOUS COLLECTIVE
BARGAINING AGREEMENTS IS TO TRY
TO ADDRESS THAT.
I DON'T KNOW WHAT AT WHAT POINT
YOU CAN CHANGE YOUR YOUR
INTEREST EARNING ASSUMPTION THAT
WOULD REDUCE THOSE LIABILITIES
DRAMATICALLY A FORGET THE POINT
AT WHICH YOU HAVE TO.
YOU KNOW HAVE SHOWN PROGRESS IN
IN IN FINDING THOSE LIABILITIES
BUT. CERTAINLY THE
ADMINISTRATION HAS HAS HAD HAS
THIS PLAN THAT IS BEING
IMPLEMENTED THROUGH THE VARIOUS
COLLECTIVE BARGAINING AGREEMENTS
THAT OVER TIME.
WE'LL GET THOSE THE SPREE FUNDED.
CAVEMAN THEN.
YOU MENTIONED TO.
STRATEGIES OF DEALING WITH THE
RECESSION THE FIRST IS TO USE
OUR RESERVES.
THE SECOND IS THAT WE'RE DOING
ONE TIME PAYMENT SO WE STOP
THOSE IS THEIR STRATEGY.
SINCE WE'RE ALL HERE PER SHORT
TIME OVERLOOKING A LONG TERM
HORIZON WHERE WHEN THERE IS A
RECESSION WE HAVE SORT OF A
STRATEGY OF WHAT WEAK AT FIRST.
OR PRIORITY LIKE AS WERE ADDING
THINGS.
THE WEEK WE GIVE THEM A RANK
SO THAT'S OKAY IF WE HAVE A
DECLINE IN REVENUES OF OUR ONE
PERCENTERS. DON'T.
PRODUCE BECAUSE OF A DOWNTURN
NO CAPITAL GAINS.
DO WE DO WE CAN HELP THE NEXT
ADMINISTRATION. OR
ADMINISTRATIONS ON.
YOU KNOW WHERE THE PRIORITY IS
IN REVERSE POINT YOU CERTAINLY
CAN DO THAT I THINK WHAT'S
DIFFICULT IS NO LEGISLATURE CAN
TIE THE HANDS OF A FUTURE
LEGISLATION.
EVEN IF IT'S A LOT OF THE
SIMILAR MEMBERSHIP.
SO WHAT YOU MAY THINK OUR
PRIORITIES NOW MAY NOT BE THE
PRIORITIES THAT YOU THINK ARE
FOR EVEN FOUR YEARS FROM NOW.
SO IT I THINK YOU CAN THINK
ABOUT THAT AND SORT OF BROAD
TERMS
BUT I THINK IT'S REALLY HARD
ONCE YOU GET DOWN TO THE NITTY
GRITTY OF FOR THIS IS WHAT WE
WOULD. CUT OFF YOU KNOW OFF THE
TOP.
BECAUSE THOSE PRIORITIES CAN
CHANGE.
SO IT'S IT'S OF ITS A HEALTHY
WAY TO GO ABOUT DOING IT ANOTHER
WAY TO THINK ABOUT IT IS HOW
MUCH FLEXIBILITY DO YOU HAVE.
I KNOW THERE'S REALLY STRONG
FEELINGS THAT SOMETHING SHOULD
BE CONTINUOUSLY APPROPRIATED
SOME STATUTES COALITION BE IN
LAW.
WHO ARE WE UNDERSTAND WHAT WHERE
THAT COMES FROM YOU WANNA GIVE
SEND SIGNALS TO LOCAL
GOVERNMENTS TO COUNTY TO SCHOOLS
THAT GIVE AND CERTAINLY ON THE
OTHER HAND IT TAKES AWAY YOUR
FLEXIBILITY? BECAUSE IT'S MUCH
HARDER TO CHANGE A STATUTORY
GOAL THEN JUST MAKE YOUR
DECISIONS ON ON YOUR ANNUAL
BASIS.
SO THERE ARE THERE ARE OTHER
TOOLS YOU CAN THINK ABOUT OF HOW
HOW DO WE MAKE SURE WE MAINTAIN
OUR FLEXIBILITY ONCE WE GET TO
THAT POINT WHERE WE HAVE TO MAKE
TOUGH DECISIONS.
TAYLOR THINKS RICHER.
IF THEY THINK YOU CENTER FOR THE
ARE A GREAT QUESTION I WOULD
WANT TO NOTE THAT IN BOTH BY.
SENATE AND ASSEMBLY PROPOSALS
ARE QUITE ON A NUMBER OF
AUGMENTATIONS WHICH GO DIRECTLY
TO COUNTIES I KNOW AROUND
HOUSING HOMELESSNESS HUMAN
SERVICES. NOT PUBLIC SAFETY
COURTS ON SCIENCE I THINK THAT
WE ARE WE'RE VERY COGNIZANT OF
WHAT. IMPACT THEIR WORLD LOCALLY
THEN DETROIT I THINK BOTH HOUSES
TO TRY TO ADDRESS THEM.
OTHER OTHER QUESTIONS FROM A
MEMBER SIR NIELSEN.
MISTER TAYLOR WHO.
THE ONE THING THAT.
A LEGISLATURE NOW CAN DO.
AND A BIT OBLIGES ALL
LEGISLATURE'S UNTIL PROP TWO
WOULD BE REPEALED AS PROP TWO.
THAT IS ONE MAJOR THING THAT OF
MANY OF US HAVE BEEN SEEKING FOR
MANY MANY YEARS THEN IT SEEMS TO
BE. ACCEPTED IN FACT EVEN MORE
BRACED.
THAT HAS MY QUESTION.
IN THIS BUDGET.
ADDITIONAL.
.
THE RESERVE IS BENT BODY AND
FLORA.
.
I GUESS WOULD BE.
.
A PARACHUTE ALLOWED MORE THAN
MAYBE JUST.
A SOFT LANDING.
DIGITAL THAT SEEM TO YOU TO BE A
HELPFUL STRATEGY.
THAT WE HAVE NOW CREATED OUR OWN
IF YOU WILL RESERVE FOR CERTAIN.
SET ASIDE.
FUNDING WHERE IT KIND OF GOES TO
CENTER MORLOCKS QUESTION OF
WHERE WE SIGNAL OUR PRIORITIES.
DID THE I THINK OF THE BILLION
DOLLARS IS JUST ANOTHER PARTY
RESERVE YOUR BSA HAS TOPPED OFF
SO IF YOU WANT TO SET ASIDE
MONEY AS OPPOSED TO SPENDING IT
NOW OR COMMITTING IT NOW.
IT'S IT'S GOOD THAT YOU JUST SET
IT ASIDE.
THAT THERE IS NOTHING THAT WOULD
PREVENT YOU FROM USING THAT ON
ANYTHING THAT YOU THOUGHT WERE
HIGHER PRIORITY IT'S JUST A
SIGNALING THAT THIS IS WHAT WE
WANTED TO AND THAT CAN HAVE THAT
CAN BE POWERFUL.
BUT IT'S NOT MINDINGIT ANYWAY
SO FOR ME THE MORE IMPORTANT
POINT IS THAT YOU'VE INCREASED
THE SENATE HAS INCREASED THEIR
RESERVES.
AND THE TARGETING IS I THINK
MORE FOR YOU FOR YOU ALL OF HOW
MUCH SORT OF SIGNALING. DO WE
WANT TO DO HOW DO WE WANT TO
CHANGE THE SORT OF DEFAULT IN%
THE FUTURE OF.
WE SET THAT ASIDE FOR THESE
PROGRAMS AND WE LIKE TO MAINTAIN
THOSE COMMITMENTS.
BUT IT'S I THINK THE MORE
POWERFUL THING IS YOU PRESERVED
YOU'VE INCREASED YOUR RESERVE
LEVELS.
AND AND I LAW THAT THAT'S THAT'S
A VERY GOOD DIRECTION I THINK.
I'M WARY THOUGH AS WE BUILD A
BUDGET.
THAT WE DO THINGS THAT ARE.
BASE BUILDING A COLLEGE THAT.
GONNA RAISE.
THE BASE AMOUNT FOR EVERY
PREACHER BUDGET WILL BE BUILT
UPON.
AND PART OF OUR PROBLEMS IN THE
PAST HAVE BEEN IN FACT THAT VERY
POINT.
AND ONE OTHER POINTED OUT
CAUTION THAT HAPPENED NOT TOO
MANY YEARS AGO WHEN THERE WAS A
FAIRLY SUBSTANTIAL SURPLUS AND.
AND THAT MONEY WAS SPENT.
THEN THAT GREATLY CONTRIBUTED TO
THE DISASTROUS FORTY FIVE
BILLION DOLLAR.
DEFICIT THAT WE THEN LATER
INCURRED RIGHT YES ALTHOUGH IN
THIS CASE I THINK I WOULD THINK
OF A MORE IS NOT BASED BUILDING
IF YOU TALK ABOUT THE ONE
BILLION.
THAT'S MORE LIKE BASS PROTECTION
YET NOT ALLOWED THE RESERVE I
AGREE YEAH I AGREE WITH THAT
YOU'RE ABOUT THE OTHER DECISION
YES YES.
THANK YOU MISTER OPEN OUT.
THANK YOU MISTER CHAIR OF MISTER
TAYLOR LIKE TO FOLLOW UP ON
SENATOR NIELSEN'S QUESTION.
ABOUT RESERVES SO AND THE TO DO
BUDGETS BEFORE US THE SENATE'S
CREATED A NEW RESERVE ACCOUNT
THEY'RE CALLING THE SAFETY NET
RESERVE THE.
ASSEMBLY IS CREATED NEW BUDGET
DEFICIT SAVINGS ACCOUNT BUT WE
ALREADY HAVE A RESERVE FUND
SPECIAL FUND FOR ECONOMIC
UNCERTAINTY. THAT UNLIKE THE
BUDGET STABILIZATION ACCOUNT
DOES NOT HAVE A THE STATUTORY
CAP ON IT SO WHY DO WE NEED TO
CREATE THESE NEW ACCOUNTS WHY
NOT JUST PUT THESE THIS MONEY
AND TO. THE SFU THAT'S AN
ALTERNATIVE FOR YOU TO DO.
ALL RIGHT.
.
THANKS SO CERTAINLY WHAT WHAT I
WOULD DO.
YOU PRINCIPLE POINT OF DOING.
OTHER COMMENTS.
THIS IS A VERY QUIET BUDGET
CONFERENCE SO ON. THAT ARE VERY
MUCH I APPRECIATE ALL THE
COMMENTS AND FEEDBACK. WELL WE
WILL ADJOURN TODAY AND RE
ADJOURN TOMORROW AT TEN THIRTY.
THANK YOU