COMMITTEE ON BUDGET AND FISCAL
REVIEW WILL COME TO ORDER. WE'RE
HOLDING OUR COMMITTEE HEARING IN
ROOM 1200 OF OUR SWING SPACE.
AND WE DO NOT CURRENTLY HAVE
WE'RE CLOSE TO QUORUM, BUT WE'RE
NOT THERE. THERE ARE LIKE 10,000
DIFFERENT COMMITTEES HAPPENING
RIGHT NOW. SO MEMBERS WILL BE
COMING IN AND OUT. AND I THE
MINUTE WE HAVE A QUORUM, I WILL
INTERRUPT WHO'S EVER SPEAKING SO
WE CAN QUICKLY ESTABLISH IT,
WE'LL HEAR A PRESENTATION AND
THEN WE WILL HAVE PUBLIC
COMMENT, ONCE EVERYTHING HAS
BEEN PRESENTED, AND TODAY WE
HAVE ONE ITEM ON THE AGENDA,
ASSEMBLY BILL 106, WHICH IS A
BUDGET BILL THAT MAKES
AMENDMENTS TO THE 2022 AND 2023
BUDGET ACTS, THIS AB 106
REFLECTS THE EARLY ACTION
AGREEMENT AMONG THE SENATE,
ASSEMBLY AND GOVERNOR. IN ORDER
TO SHRINK THE SIGNIFICANT
SHORTFALL, THAT WE ARE
ENCOUNTERING IN OUR BUDGET, THIS
YEAR. THE AGREEMENT REPRESENTS A
MIX OF SOLUTIONS TOTALING $17.3
BILLION. THE ADMINISTRATION WILL
DESCRIBE THAT THAT AGREEMENT IN
DETAIL IN A MOMENT. AND I JUST
WANT TO NOTE THAT AB 106
REFLECTS SPECIFIC ADJUSTMENTS TO
CURRENT AND PAST BUDGET
AGREEMENTS, AND INCLUDES A
SECTION REQUIRING THE
ADMINISTRATION TO CONFIRM
DETAILS OF THE REMAINDER OF THE
AGREEMENT TO THE LEGISLATURE,
EITHER THROUGH THE JOINT
LEGISLATIVE BUDGET COMMITTEE
NOTIFICATION PROCESS, I WANT TO
JUST STRESS THIS. THIS EARLY
ACTION, OF COURSE, DOES NOT
SOLVE OUR BUDGET DEFICIT, BUT IT
IS SIGNIFICANT, PROCESS OR
PROGRESS? EXCUSE ME? THIS IS NOT
WHAT WE NORMALLY DO. WE NORMALLY
DO THE BUDGET IN IN ONE BIG,
ACTION, WE COULD HAVE SIMPLY
WAITED AND DONE IT ALL IN JUNE,
BUT WE HAVE DECIDED THAT IT'S
IMPORTANT TO TAKE A STRONG STEP
SO THAT WE CAN THEN SPEND THE
NEXT COUPLE OF MONTHS FOCUSING
ON SOME OF THE TRULY DIFFICULT
DECISIONS THAT WE'RE GOING TO
HAVE TO MAKE IN ORDER TO PRODUCE
AND PASS A BALANCED BUDGET,
WHICH WE WILL DO, SO I WANT TO
THANK OUR PARTNERS IN THE,
ASSEMBLY AND THE ADMINISTRATION.
I WANT TO THANK OUR BUDGET SUB
CHAIRS AND EVERYONE WHO HAS
BROUGHT US TO THIS POINT. SO
BEFORE WE PROCEED, I WANT TO
PROVIDE AN OPPORTUNITY TO OUR
VICE CHAIR, SENATOR NILO, TO
MAKE ANY OPENING COMMENTS. MR.
VICE CHAIR. THANK YOU, MR.
CHAIR. I APPRECIATE THAT. SO WE
HAVE, WE'RE LOOKING AT 1 TO 2
BILLION SPECIFICALLY THIS
MORNING, BUT THE TOTAL IS 17
BILLION, ON EARLY ACTIONS, WHICH
WERE ANXIOUS TO SEE THE REST OF
IT. BUT, I GUESS WE'RE ALSO
PLANNING ON 12 BILLION FROM THE
RESERVE. THAT'S A TOTAL OF 29
BILLION. AND ACCORDING TO THE
GOVERNOR, THAT THE GAP IS 38
BILLION. SO WE'RE ALMOST THERE.
I DON'T KNOW WHY WE DON'T JUST
GO AHEAD AND IDENTIFY THE OTHER
NINE, THIS MORNING. I'M JOKING,
OF COURSE, BUT TRYING TO MAKE A
POINT. ONE CORRECTION WITH WHAT?
THE CHAIR SAID THAT THIS IS A
PROPOSAL OF THE, THE ASSEMBLY
AND THE SENATE ALONG WITH THE
ADMINISTRATION, IT'D BE
APPROPRIATE TO JUST ADD THE WORD
DEMOCRATS TO THAT, BECAUSE
REPUBLICANS HAVE BEEN NO PART OF
THAT DISCUSSION, WHICH WE
CONTINUE TO COMPLAIN ABOUT AT
THE 8 MILLION CITIZENS THAT ARE
CAUCUS REPRESENTS ARE NOT
REPRESENTED IN THESE
DISCUSSIONS, WHICH IS
DISAPPOINTING, BUT AS TO THE
POINT OF WHAT WE NORMALLY DO,
NORMALLY IN THE CONTEXT OF THE
CHALLENGE, WE HAVE, ONE COULD
LOOK BACK TO 2009, WHICH WAS A
SIMILAR CIRCUMSTANCE, ALTHOUGH
WE WERE IN A GREATER DEGREE OF
DIFFICULTY AT THAT POINT, BUT
ONLY MARGINALLY SO. AND IN THAT
YEAR WE GRABBED THAT CHALLENGE
BY THE THROAT, IF YOU WILL, AND
SPENT A WEEK IN FEBRUARY,
SETTLING THAT BUDGET PROBLEM, ON
A PERMANENT, AT LEAST FOR THAT
PARTICULAR CYCLE, ON A PERMANENT
BASIS. HERE WE ARE, ALMOST
HALFWAY THROUGH APRIL, AND
BEGINNING TO TACKLE, WHAT IS A
DEFICIT THAT IS SIGNIFICANTLY
GREATER THAN THE ADMINISTRATION
IS? SO FAR WILLING TO ADMIT? SO
I LOOK FORWARD TO LEARNING MORE
ABOUT WHAT THE SENATE AND
REPUBLICAN SENATE AND ASSEMBLY
DEMOCRATS HAVE PROPOSED. I THINK
THE MAGIC HAS HAPPENED, AND WE
HAVE A QUORUM. SO Þ, WE DON'T
WAIT ONE, TWO, THREE, FOUR,
FIVE, SIX SEVEN. NO, WE HAVE TEN
HERE. OH, WE NEED 11. WE HAVE
20. I'M SORRY, FALSE START. WE
NEED ONE MORE. SO PLEASE,
EVERYONE STAY IF YOU CAN. OH, I
GOT TO GO. YES, I KNOW, OKAY.
THANK YOU, MR. VICE CHAIR, AND
WE WILL NOW GO TO, CHRIS
FERGUSON FROM THE DEPARTMENT OF
FINANCE TO PRESENT THE AGREED
UPON PLAN. SURE. CHAIR AND
MEMBERS, CHRIS FERGUSON FOR THE
DEPARTMENT OF FINANCE. I'LL KEEP
MY REMARKS RATHER BRIEF, FIRST,
I'D LIKE TO TAKE A MOMENT TO
THANK THE COMMITTEE FOR THE
PARTNERSHIP IN CRAFTING THE
EARLY EDUCATION OR EARLY ACTION
PACKAGE THAT IS BEING CONSIDERED
TODAY. THIS PACKAGE REFLECTS
ROUGHLY $17.3 BILLION IN EARLY
BUDGETARY ACTIONS THAT WILL
SIGNIFICANTLY REDUCE THE
EXISTING BUDGET SHORTFALL AND
POSITION THE STATE TO RESPOND TO
ADDRESS THE REMAINING SHORTFALL
IN JUNE. THESE ACTIONS CONSIST
OF ROUGHLY $3.6 BILLION IN
REDUCTIONS, $5.2 BILLION IN
REVENUE AND BORROWING, 5.2
BILLION IN DELAYS AND DEFERRALS,
AND CHIPS ROUGHLY 3.4 BILLION IN
COSTS FROM THE GENERAL FUND TO
OTHER STATE FUNDS. ADDITIONALLY,
THE PACKAGE BEFORE THE COMMITTEE
REFLECTS BUDGET LANGUAGE
AUTHORIZING THE ADMINISTRATION
TO FREEZE ADDITIONAL ONE TIME
FUNDING THAT WAS INCLUDED IN THE
2021, 2022, 2023 BUDGET ACTS,
THIS IS THE FIRST STEP IN
CLOSING THE SHORTFALL. MORE,
DISCUSS THÀNH WILL COME TO FULLY
CLOSE THAT SHORTFALL AS PART OF
THE MAY REVISION AND THE FINAL
BUDGET AGREEMENT, THIS WILL
CONCLUDE MY REMARKS, AND MYSELF
AND MY COLLEAGUES FROM THE
DEPARTMENT ARE AVAILABLE TO
ADDRESS ANY QUESTIONS THAT THE
COMMITTEE MAY HAVE AT THE
APPROPRIATE TIME. THANK YOU SO
MUCH, AND I WANT TO NOTE THAT,
OUR LEGISLATIVE ANALYST IS HERE,
FOR QUESTIONS THAT MAY ARISE AS,
WE'LL NOW, BEFORE WE OPEN TO THE
PUBLIC COMMENT, OPEN IT UP TO
DISCUSSION AND QUESTIONS FOR
MEMBERS OF THE COMMITTEE. ANY
QUESTIONS OR COMMENTS, SENATOR
NILO. I, HAVE A LOT OF QUESTIONS
. I'LL JUST ASK A COUPLE FOR
NOW. ONE. THE. I UNDERSTAND THE
BILL AUTHORIZES ALSO AUTHORIZES,
DEPARTMENT OF FINANCE, TO
SUSPEND A WIDE RANGE OF PROGRAM
SPENDING FROM 2023, PERHAPS
GOING BACK TO 2021, I DON'T SEE
A DOLLAR AMOUNT ON THAT. I
WONDER WHAT THAT IS. AND, WE ARE
AUTHORIZED, AUTHORIZING, A
SIGNIFICANT, LATITUDE TO
BASICALLY UNILATERAL CUTS. SO
I'D LIKE SOME CLARIFYING
COMMENTS ON THAT. AND I'LL JUST
START BEFORE I TURN IT OVER TO
MR. FERGUSON. I MEAN, THE
REALITY IS WE ARE ABOUT ABOUT
TWO MONTHS FROM PASSING THE
FINAL, BUDGET. AND I THINK, NOT
HAVING UNNECESSARY CASH BURN
GIVES US MORE LATITUDE IN THAT
FINAL BUDGET. AND SO WE'RE
SIMPLY PROVIDING THE
ADMINISTRATION SOME FLEXIBILITY,
WHICH, FRANKLY, THEY ALREADY
EFFECTIVELY HAVE BECAUSE THEY IN
TERMS OF WHEN MONEY GOES OUT THE
DOOR, THE ADMINISTRATION HAS
SIGNIFICANT FUNCTIONAL LATITUDE
ANYWAY. AND THEY WILL, YOU KNOW,
ANY FORMAL FREEZE WILL HAVE TO
THE JLBC WILL HAVE TO BE
NOTIFIED, ABOUT THAT AND HAVE
THE OPPORTUNITY TO OBJECT IF WE
DEEM APPROPRIATE. BUT MR.
FERGUSON, YOU CAN PROVIDE A
RESPOND IN MORE DETAIL. YEAH. I
THINK THAT'S A SUCCINCT SUMMARY
OF WHAT THAT LANGUAGE WOULD DO
EFFECTIVELY. IT'S CREATING
OPPORTUNITIES TO REVIEW
ADDITIONAL POTENTIAL SOLUTIONS
THAT COULD BE CONSIDERED AT BOTH
THE MAY REVISION AND AS PART OF
THE FINAL BUDGET PACKAGE, SO WE
WOULD THINK OF IT AS MORE OF A
PAUSE AS OPPOSED TO, YOU KNOW, A
DIRECT SIGNAL THAT WE'RE PULLING
BACK ANY PARTICULAR TYPE OF
SPENDING. AND AS SUCH, WE DON'T
HAVE A SPECIFIC AMOUNT THAT YOU
MAY SEE IN, YOU KNOW, WHAT WOULD
BE PAUSED AT THIS POINT IN TIME?
SENATOR, I'M SORRY, SENATOR
SMALL. THANK YOU, MR. CHAIR. AND
JUST TO FOLLOW UP ON THAT, WHEN
YOU SAY THE I APPRECIATE THE
SORT OF PAUSE FRAMEWORK, AND
WHEN YOU MAKE THE DETERMINATION
OF WHAT IS BEING PAUSED AND IS
IT TAKING INTO ACCOUNT I'M
CURIOUS ABOUT THE CRITERIA AND
IS IT TAKING INTO ACCOUNT
PROGRAMS THAT ARE ALREADY IN
FLOW WITH THOSE DOLLARS THAT
MIGHT SUDDENLY BE FROZEN? AND I
SAY THIS BECAUSE I'M I'M HEARING
FROM CONSTITUENTS, IN MY
DISTRICT WHO ARE DOING SOME, YOU
KNOW, I WANT TO SAY IMPORTANT
WORK AROUND CRIME REDUCTION.
OAN, THEY ARE MANAGING SOME OF
THE REENTRY WORK THAT IS
HAPPENING IN COMMUNITIES.
THEY'RE DOING IT IN SOME WAYS
FOR A SONG IN TERMS OF, THE
LEVEL OF SERVICE THAT THEY'RE
PROVIDING. AND WHEN YOU'RE
COMPARING TO THE AMOUNT OF
DOLLARS THAT ARE PAUSED, BUT
THE, THE PROGRAM IS ACTUALLY
STILL SUPPORTING THOSE FOLKS WHO
ARE COMING OUT OF PRISON, SO THE
PAUSE IS INTERFERING WITH THOSE
INDIVIDUALS BEING ABLE TO GET
THE SERVICES THAT THEY NEED. AND
WE KNOW IF THOSE SERVICES AREN'T
PROVIDED, WHEN PEOPLE DON'T ARE
DESPERATE AND THEY HAVE NO
SAFETY NET, WE DON'T WANT TO SEE
ANY ALTERNATIVE TO ACTUALLY
COMING OUT OF PRISON AND
STEPPING INTO A CONTRIBUTING
ROLE IN OUR COMMUNITIES VERSUS
COMING OUT OF PRISON AND HAVING
FORCE, TO STEP INTO A MORE
DANGEROUS, PATHWAY. SO I'M
CURIOUS, WHAT'S THE CRITERIA FOR
WHAT'S PAUSED AND, AND, AND ARE
YOU BEING MINDFUL OF THOSE
PROGRAMS THAT ARE RELYING ON
THOSE DOLLARS AND ARE ACTUALLY
WORKING AND UTILIZING THOSE
FUNDS? AND BEFORE WE GET TO THE
ANSWER, WE NOW DO HAVE A QUORUM.
SO WE WILL CALL THE ROLL
ESTABLISHED QUORUM AND THEN GET
AN ANSWER. SENATORS WIENER
PRESIDENT NILO HERE, ALAN BECKER
, BLAKE SPEER HERE. DOLLY
DURAZZO. EGGMAN. GROVE. LAIRD
HERE. MENGIBAR. MEN HERE.
NEWMAN. PADILLA. ROTH CIERTO.
SKINNER SMALLWOOD. CUEVAS. HERE.
WAHAB HERE. WILK WE HAVE A
QUORUM, AND IT IS ESTABLISHED.
SO YOU MAY ANSWER. YES,
CERTAINLY, I CAN'T SPEAK TO ANY
ONE PARTICULAR PROGRAM, BUT WHAT
I CAN SAY IS, GLOBALLY, OUR
INTENT ISN'T TO CLAW BACK WHAT'S
ALREADY BEEN RELEASED OUT TO,
PROGRAMS. I THINK IT'S MORE TO
LOOK TOWARD THOSE RESOURCES THAT
MAY HAVE NOT BEEN ALLOCATED AT
THIS POINT IN TIME AND OR
RELEASED OUT TO, PROGRAM, SO,
YOU KNOW, I CAN'T SPEAK TO THE
PARTICULARS OF WHAT YOU
MENTIONED AROUND PUBLIC SAFETY,
BUT I CAN SAY THAT THE GOAL IS
REALLY TO TRY AND IDENTIFY THOSE
ONE TIME OR AVAILABLE RESOURCES
THAT HAVE NOT BEEN DIRECTLY
ALLOCATED OUT TO PROGRAMS OR TO
THE FIELD AT THIS POINT IN TIME.
I JUST WOULD HOPE THAT THE
CRITERIA IS LOOKING AT ISSUES OF
PUBLIC SAFETY AND THAT THOSE ARE
BEING PRIORITIZED. AND SO WHEN
THE FREEZE OR PAUSE FUNCTION IS
APPLIED, THAT IT'S NOT APPLIED
EQUALLY ACROSS A SPREADSHEET.
BUT REALLY THINKING ABOUT WHAT
THE IMPACTS WILL BE ON, ON THE
GROUND. AND I HOPE THAT, THAT'S
TAKEN INTO CONSIDERATION IN
THIS, THIS PROCESS. SENATOR
SERRANO, THANK YOU VERY MUCH.
AND, I WANT TO THE FIRST
QUESTION I HAVE IS, IS REGARDING
THE USE OF, OUR OUR RESERVES.
AND THAT'S NOT PART OF THIS 17
MILLION. SO WE'RE NOT THERE YET,
RIGHT? BILLION. I'M SORRY. I
KEEP YEAH, THAT WOULD BE
CORRECT. THE EARLY ACTION
PACKAGE DOES NOT REFLECT A
WITHDRAWAL FROM THE RESERVE. BUT
WHAT IT DOES REFLECT IS INTENT
THAT THE FINAL BUDGET AGREEMENT
REFLECT A WITHDRAWAL FROM BOTH
THE BUDGET STABILIZATION ACCOUNT
AND THE PUBLIC SCHOOL SYSTEM
STABILIZATION ACCOUNT. DOES THAT
REQUIRE A STATE OF EMERGENCY
DECLARATION FROM THE, OUR FISCAL
STATE OF EMERGENCY DECLARATION
FROM THE GOVERNOR? AND IS HE
PLANNING ON DOING THAT? THE
GOVERNOR'S BUDGET DID ASSUME
THAT AT SOME POINT, THE GOVERNOR
WOULD MAKE THAT TYPE OF
DECLARATION. WE DON'T HAVE A
SPECIFIC POINT IN TIME IN WHICH
THAT WOULD OCCUR, BUT OUR BUDGET
PACKAGE WAS PREDICATED ON THAT
OCCURRING. ALL RIGHT. MY SECOND
QUESTION IS, YOU KNOW, WHEN WE
MAKE THESE FUNDING CUTS, A LOT
OF THEM, FOLLOWING UP A LITTLE
BIT ON SENATOR CUEVAS, SMALLWOOD
CUEVAS'S REMARKS, THERE'S A LOT
OF PROJECTS, A LOT OF, MANDATED
PROJECTS, FRANKLY, THAT HAVE
TIMELINES. AND THEY ALSO HAVE,
YOU KNOW, FISCAL, CONSEQUENCES
IF YOU DON'T MEET THOSE
TIMELINES. AND SO WE'VE PLANTED
IN THE LAST THREE YEARS A LOT OF
SEED MONEY INTO THOSE THINGS,
LIKE BROADBAND TO ENSURE THAT
THEY HAD AT LEAST SOME OF THE
RESOURCES THEY NEED. IF WE'RE
GOING TO CUT THOSE RESOURCES OR
WAS THERE HAS THERE BEEN ANY
TALK ABOUT, SUSPENDING THE
TIMELINES WITH THAT BECAUSE
OTHERWISE WE'RE GOING TO LEAVE
PEOPLE OUT THERE NOT BEING ABLE
TO GET THOSE DONE. THEY'RE GOING
TO BE FISCALLY PUNISHED FOR NOT
DOING IT. SO THERE'S MORE TO GO
WITH THAT. AND I THINK THAT'S
WHERE PROBABLY THE DECLARATION
PART WOULD COME IN, IS HE'D HAVE
TO MAKE THOSE ADJUSTMENTS. AND
I'M HOPING THERE'S DISCUSSIONS
ABOUT THAT. YEAH, CERTAINLY I
CAN TAKE THAT BACK. I CAN'T
SPEAK TO SPECIFIC PROJECTS THAT
MIGHT BE IMPACTED BY THE DELAY
OR SPECIFIC ALLOCATIONS, BUT
CERTAINLY, YOU KNOW, AT FINANCE
WE WOULD TAKE THOSE TYPES OF
SITUATIONS INTO CONSIDERATION.
OKAY. WE THE BIGGER $17 BILLION
PACKAGE HAS A LOT OF DEFERRALS
AND DELAYS. AND WHEN WE STARTED
THIS PROCESS, WE WERE TOLD, YOU
KNOW, WE HAVE TO PREPARE A
BUDGET THIS YEAR, THAT TAKES
INTO ACCOUNT OUR FUTURE YEARS.
WELL, OUR FUTURE YEARS DON'T
LOOK ANY BETTER THAN THIS YEAR.
AND SO THESE DEFERRALS AND
DELAYS HAVE THE POTENTIAL TO BE
ACTUALLY PERMANENT, DON'T THEY?
I THINK THAT WOULD BE SUBJECT TO
A LOT OF DISCUSSION BETWEEN THE
LEGISLATURE AND THE
ADMINISTRATION AS TO WHAT THOSE
OUT YEARS MIGHT LOOK LIKE, COME
THE FINAL BUDGET AGREEMENT AND
THE MAY REVISION, AT THIS POINT
IN TIME, I CAN SPEAK TO WHAT THE
GOVERNOR'S BUDGET PROPOSED,
WHICH WAS A PACKAGE OF DELAYS, A
PACKAGE OF DEFERRALS AND OTHER
ITEMS. AND I, I CAN SAY THAT THE
PACKAGE BEFORE YOU TODAY IS THE
FIRST STEP IN THE PROCESS OF
ADDRESSING THAT SHORTFALL. IT IS
NOT THE COMPLETE PACKAGE FOR THE
THREE YEAR WINDOW OR WHAT MIGHT
BE CONSIDERED INTO THE OUT
YEARS. RIGHT. WE'RE JUST TRYING
TO GET AN IDEA OF SOME OF THE
THINKING THAT GOES INTO THE
EARLY ACTION PLAN VERSUS WHAT'S
IN STORE FOR LATER, SINCE, AS MY
COLLEAGUE HAD NOTED, THIS IS THE
FIRST WE'VE BEEN SEEING IT TOO,
SO THE MCO TAX THAT WE, WE
PASSED LAST YEAR TO HELP BAIL
OUT, TO HELP AUGMENT SOME OF THE
AND ENHANCE SOME OF THE MEDI-CAL
REIMBURSEMENTS, BECAUSE WE ADDED
A LOT TO THE MEDI-CAL PROGRAM,
THAT'S BEEN SENT TO THE GENERAL
FUND, MOST A LOT OF IT HAS 600
AND SOME ODD MILLION DOLLARS,
HOW ARE WE GOING TO REIMBURSE
MEDI-CAL IF WE'RE SENDING THE
MONEY THAT WAS PROPOSED?
EXACTLY. FOR THAT ELSEWHERE? I
DEFER TO MY COLLEAGUE LARA
AYALA. THANKS. GOOD MORNING,
SENATOR, CAN YOU CLARIFY WHAT
YOU MEAN BY SENDING IT TO THE
GENERAL FUND? WELL, IT'S BEEN
TRANSFERRED TO THE GENERAL FUND.
IT MEANS THEY'RE NOT GOING TO
USE IT FOR ITS INTENDED PURPOSE.
INSTEAD, IT'S GOING TO THE
GENERAL FUND SO THAT THE GENERAL
FUND CAN EITHER BACKFILL OR USE
IT FOR GENERAL FUND PURPOSES. SO
YOUR QUESTION IS HOW WE'RE GOING
TO PAY FOR INCREASED MEDI-CAL
REIMBURSEMENTS, OR ARE WE NOT
GOING TO INCREASE OUR
REIMBURSEMENTS TO THE PROVIDERS,
WHICH IS CAUSING THEM GREAT
FINANCIAL DISTRESS? THAT IS
STILL THE AGREEMENT FROM THE
2023 BUDGET ACT IS STILL IN
PLACE. THE NOTHING HAS BEEN
CHANGED FOR ANY, PROVIDER RATE
INCREASES. THAT, PROPOSAL IS
STILL REFLECTED IN THE
GOVERNOR'S BUDGET. OKAY PART OF
THIS THIS IS A DIFFERENT
QUESTION. THANK YOU VERY MUCH
FOR YOUR ANSWER. THERE'S $1.3
BILLION, THAT'S USED TO PAY DOWN
DEBTS, RIGHT? WE HAVE DEBT
PAYMENT MONEY, BUT WE'RE TAKING
SOME OF THAT MONEY AND WE'RE
GOING TO PAY FOR, FOR A PENSION
PAYMENT INSTEAD. IS THAT CORRECT
? I DEFER TO MY COLLEAGUE, ASTON
. IS THAT SOME OF THIS WE HAVE
TO INTERPRET? AND YOU GUYS CAN
HELP US INTERPRET IT THE RIGHT
WAY. IF WE'RE INTERPRETING IT
WRONG. ASTON. DEPARTMENT OF
FINANCE, THE PAYMENT THAT IS
BEING PROPOSED IS THAT THE PRIOR
SUPPLEMENTAL PENSION PAYMENT
FROM 2023 OF $1.7 BILLION
PAYMENT WILL BE USED TO REDUCE
THE CONTRIBUTION TOWARD THE,
TOWARD CALPERS IN BUDGET IN THE
BUDGET YEAR. OKAY, SO THERE'S NO
CONSTITUTIONAL ISSUES WITH HOW
WE'RE HANDLING THAT. IN OTHER
WORDS, IT'S NOT GOING TO BE TOLD
WE CAN'T DO THAT LATER ON. THEN
WE HAVE A $1.3 BILLION ADDITION
TO WHAT WE'VE BEEN. GO AHEAD SIR
. HI. GABE PADDOCK LEGISLATIVE
ANALYST, OUR OFFICE DOES THINK
THERE COULD BE SOME
CONSTITUTIONAL QUESTIONS BECAUSE
THIS, AS OUR UNDERSTANDING OF
THE THIS MANEUVER IS THAT IT
WOULD BE SUPPLANTING THE CURRENT
YEAR PAYMENT WITH PRIOR YEAR
PAYMENT. AND SO, AS I READ THE
AGREEMENT HERE IN THE EARLY
ACTION PACKAGE, IT DOES SEEM
LIKE IT, RESERVES SOME OF THE
FINAL DETAILS FOR LATER IN THE
PROCESS OF HOW THIS WOULD BE
IMPLEMENTED. AND SO, PERHAPS IT
COULD BE SHIFTED TO AVOID OR
IMPLEMENTED IN A WAY THAT AVOIDS
THE CONCERNS THAT WE RAISED. ALL
RIGHT. THANK YOU, THE LAST
QUESTION I'LL ASK, BECAUSE
THERE'S LOTS YOU CAN KEEP GOING
AND GOING. SO I'LL JUST ASK THIS
LAST ONE. SO IT'S GOING TO DELAY
THE $1 BILLION IN THE TRANSIT
BAILOUT, AT SOME POINT WE'RE
GOING TO HAVE TO COME TO THE
REALITY THAT IT'S PROBABLY NOT
GOING TO GET PUT BACK IN IN THE
NEXT THREE YEARS, AND SOMEBODY'S
GOING TO HAVE TO DELIVER THE BAD
NEWS THAT WE'RE GOING TO HAVE TO
LIVE WITH WHAT WE HAVE OR ADJUST
OUR PROGRAMS, IS THERE ANY TALK
WITH WORKING WITH THOSE AGENCIES
TO FIGURE OUT HOW TO DOWNSIZE OR
WHATEVER SO THAT THEY DON'T,
DEPEND ON SOMETHING THAT THEY
PROBABLY AREN'T EVER GOING TO
GET? JAMES MÀ WITH THE
DEPARTMENT OF FINANCE, YOU ARE
RIGHT THAT IN THE FORMULA TÊ IRC
PROGRAM, OUR PROPOSAL IS TO
DELAY $1 BILLION FROM THE BUDGET
YEAR TO THE BUDGET YEAR, PLUS
ONE, TRANSIT STILL REMAINS AN
ENORMOUS PRIORITY OF THE
GOVERNOR. AND AT THIS POINT, OUR
OUR PLAN IS TO FULLY FUND THAT
PROGRAM. ALL RIGHT. THANK YOU
VERY MUCH I APPRECIATE IT. THANK
YOU. CAN I JUST JUST TO CLARIFY
ONE THING, THE, THE BAILOUT WAS
$1 BILLION IN GRF FUNDS THAT WE
PUT IN THE BUDGET LAST YEAR.
THAT'S NOT WHAT'S BEING DELAYED
HERE. THIS WAS, TWO YEARS AGO. I
BELIEVE, OR THREE. WE ALLOCATED
$4 BILLION FOR TRANSIT CAPITAL.
THE CIP, PROGRAM, 1 BILLION OF
THAT CAPITAL FUNDING IS BEING
DEFERRED. IT'S NOT THE BAILOUT
OPERATIONAL MONEY. I JUST WANTED
TO CLARIFY THAT, BUT IT'S MONEY
THAT WE HAD TOLD THEM THEY WERE
GOING TO GET AND THEY WERE AND.
YEAH, YEAH, THAT'S WHAT I WAS
GETTING AT. YEAH. AND I'M A BIG
FAN OF THAT MONEY BY THE WAY,
BAILOUT OR WHATEVER. YEAH. OKAY
THANK YOU, SENATOR BLAKE SPEER
AND THEN DID SOMEONE AND THEN
SENATOR MENGIBAR. YES. THANK
YOU. CHAIR, THANK YOU FOR BEING
HERE TODAY, I, I, I HAVE A
COMMENT AND THEN A QUESTION. SO
ONE OF THE THINGS THAT I'VE
FOUND MOST DIFFICULT ABOUT
TRYING TO GET MY ARMS AROUND
UNDERSTANDING THESE PROPOSED
BUDGET CUTS IS NOT UNDERSTANDING
HOW THE ANALYSIS IS BEING DONE,
BECAUSE I THINK COMING FROM A
LOCAL CITY GOVERNMENT EVALUATING
PROGRAMS FOR THEIR EFFICACY, I
KNOW THERE ARE SOME THINGS THAT
ARE INFRASTRUCTURE PROJECTS ARE
ONE TIME PROJECTS. THERE ARE
OTHER THINGS THAT ARE STAFFING
AND THINGS THAT ARE MAYBE NOT
PARTICULARLY MEASURABLE ON
EFFICACY, BUT SOME PROGRAMS ARE
AND SO IF PROGRAMS ARE STARTED
TO PROVIDE MORE HOUSING OR TO
PROVIDE CARBON REDUCTION OR, OR
WHATEVER, THE GOALS OF THE
PROGRAMS ARE, WELL, WHEN I'M
READING A DOCUMENT THAT SAYS,
LIKE, FOR EXAMPLE, REDUCES 7.3
MILLION FOR THE EMERGING
OPPORTUNITIES PROGRAM, AND I
DON'T HAVE AN UNDERSTANDING OF
WHAT IS AN EMERGING
OPPORTUNITIES PROGRAM. WHAT WAS
ITS GOAL? WHY WAS IT SET UP? IS
IT IS THIS SOMETHING THAT THAT
WE FIND IS NOT AS EFFECTIVE AS
WE HOPED IT WOULD BE? BECAUSE I
THINK MY HOPE WHEN WE'RE DOING
THIS BELT TIGHTENING AND BUDGET
DOWNSIZING IS THAT WE WOULD BE
EVALUATING THESE PROGRAMS FOR
EFFICACY AND I'D AND THIS WOULD
BE THE OPPORTUNITY FOR US TO
CULL THINGS THAT WE THINK ARE
LOWER PERFORMING. SO AND I'M
I'M, I'M NOT HEARING ANY OF THAT
BACK FROM THE EXECUTIVE BRANCH
ABOUT THAT KIND OF ANALYSIS. SO
I WANTED TO JUST PUT THAT OUT
THERE AND SEE IF YOU HAVE ANY
RESPONSE TO THAT, IF THAT'S
HAPPENING BEHIND THE SCENES, BUT
IT'S NOT BEING PRESENTED TO US
IF IT COULD BE OR, OR WHAT IS
WHAT IS THE OTHER ANALYTIC
APPROACH? BECAUSE I THINK PART
OF MY CONCERN IS THAT IT SEEMS
SCATTERSHOT. IT SEEMS ALMOST
LIKE IT'S RANDOM. AND THAT'S
OBVIOUSLY NOT WHAT WE HOPE FOR.
SO. SO I'D LIKE TO HEAR YOUR
RESPONSE TO THAT. YEAH, SINCE
WHAT I WOULD SAY TO THAT IS, YOU
KNOW, CERTAINLY THAT'S PART OF
THE CALCULUS AS WE LOOK AT, THE
GOVERNOR'S BUDGET AND THE
PACKAGE THAT WE PUT FORWARD. AND
I THINK WE LOOK AT IT IN TERMS
OF WHAT THE DOWNSTREAM IMPACTS
OF THE REDUCTIONS, THE DELAYS,
THE DEFERRALS, THE REVENUE
SHIFTS WOULD BE ON THE PROGRAMS
THAT ARE BEING FUNDED WITH THOSE
RESOURCES. HIS SO THAT DOES, YOU
KNOW, SOMEWHAT FACTOR INTO THE
CALCULUS WHERE AVAILABLE, I
THINK THAT'S, YOU KNOW, SORT OF
WHAT I WOULD SAY IN RESPONSE.
CERTAINLY THERE ARE TO YOUR
POINT, THERE ARE VARYING DEGREES
OF PROGRAM INFORMATION THAT ARE
OR ARE NOT AVAILABLE, ESPECIALLY
WITH SOME OF THE MORE RECENT
INVESTMENTS, BECAUSE IT DOES
TAKE TIME TO SEE THE RESULTS OF
THOSE PROGRAMS. BUT YES. SORRY.
IS IT OKAY IF HE ANSWERS TO NO?
YES, I JUST GABE PETKERE FROM
LEGISLATIVE ANALYST'S OFFICE AND
I THOUGHT PERHAPS LIKE SOMEWHAT
OF A STEPPING BACK PERSPECTIVE
TO YOUR QUESTION MIGHT BE
HELPFUL BECAUSE I THINK WHEN WE
LOOK BACK AT THE GOVERNOR'S
JANUARY PROPOSAL, IT INCLUDED A
WIDE SPECTRUM OF SOLUTIONS PUT
FORWARD, INCLUDING SOME OF THE
ACTIONS THAT ARE IN THIS EARLY
ACTION PACKAGE, BUT THEN ALSO
SOME ADDITIONAL OUTRIGHT
REDUCTIONS, WHICH WILL BE
PROBABLY THE HARDER CHOICES THAT
THE LEGISLATURE WILL HAVE TO
MAKE. I MEAN, I THINK THE CHAIR
MADE A REFERENCE TO THAT, THAT
LATER IN THE PROCESS IS WHEN
THERE WILL NEED TO BE THESE
HARDER DECISIONS THAT YOU'LL
HAVE TO MAKE KIND OF ALONG THE
LINES OF WHAT YOU'RE REFERRING
TO. SENATOR AND SO I THINK THERE
IS A POINT THAT IN SOME SENSE,
THIS PACKAGE KIND OF CLEARS THE
DECK IN A WAY OF SOME OF THESE,
IF THESE WERE ALWAYS GOING TO BE
INCLUDED IN A FINAL PACKAGE,
KIND OF TAKES THEM OFF THE TABLE
AND HOPES, HOPEFULLY INCREASES
THE CAPACITY FOR THE LEGISLATURE
TO ENGAGE IN NEGOTIATIONS AND
DISCUSSIONS AROUND THOSE HARDER
DECISIONS, WHICH I THINK IS, YOU
KNOW, KIND OF WHAT YOU'RE
REFERRING TO. AND I DON'T KNOW
HOW MUCH, PROGRAM, EVALUATION OR
EFFICACY WOULD BE AVAILABLE FOR
SOME OF THE MORE RECENT
ALLOCATIONS. BUT CERTAINLY THOSE
ARE THE KIND OF DISCUSSIONS THAT
I THINK ARE APPROPRIATE AS YOU
MAKE THOSE DECISIONS AS WELL.
THANK YOU FOR THAT. AND SO, I
MEAN, MAYBE MY COMMENT IS MORE
FORWARD LOOKING. SO IN THE NEXT
SEVERAL WEEKS AND MONTHS THAT
THERE WOULD BE THIS EVALUATION
OF EFFICACY OF PROGRAMS,
PARTICULARLY WITH THEIR SET OUT
GOAL, BECAUSE I THINK THERE
SOMETIMES CAN BE THERE'S THERE
WAS A GOAL LIKE, FOR EXAMPLE, TO
PROVIDE MORE HOUSING. AND WHAT
HAPPENED WAS THE PROGRAM IS
PROVIDING A LOT OF RESOURCES AND
CONNECTING TO OTHER AGENCIES,
BUT IT'S NOT ACTUALLY CREATING
HOUSING OR PROVIDING HOUSING. SO
THAT ANALYSIS OF IS THE GOAL
ACTUALLY BEING MET. AND I, I
THINK THAT TO ME THAT WOULD BE A
RIGOROUS AND ANALYTIC APPROACH
THAT WOULD MAKE SENSE. AND I
REALLY URGE US TO DO THAT AND
YOU TO PRESENT THAT TO US SO
THAT WHEN WE'RE READING THESE
PROPOSED CUTS, THAT THERE'S SOME
A LITTLE MORE FULLNESS AROUND.
WHY IS THAT BEING PROPOSED? AND
SO YOU WERE SAYING DOWNSTREAM
IMPACTS ARE WHAT YOU'RE LOOKING
AT, WHICH IS IMPORTANT. BUT I
ALSO WOULD JUST HOPE YOU COULD
THINK ABOUT THE EFFICACY OF THE
PROGRAM. YEAH. THANK YOU SO
MUCH. THANK YOU. THANK YOU.
SENATOR MENGIBAR. THANK YOU, MR.
CHAIR, DEPARTMENT OF FINANCE,
WOULD YOU SAY THAT SOME OF THE
ITEMS HERE THAT ARE PROPOSED FOR
DELAY COULD BE ELIGIBLE FOR CUTS
IN THE MAY REVISE? I THINK I
COULDN'T SPECULATE AS TO WHAT
THE MAY REVISION OR THE FINAL
BUDGET AGREEMENT WILL INCLUDE.
AND WHAT I CAN SAY IS THAT THE
PACKAGE BEFORE YOU TODAY
REFLECTS THE ALLOCATIONS IN
THOSE CATEGORIES. AS DELAYS FROM
ONE FISCAL YEAR TO THE NEXT, OR
TO A DIFFERENT FISCAL YEAR, THE
MAY REVISE HAVE EVEN MORE,
BIGGER OF A DEFICIT. ARE THEY
ELIGIBLE JUST ON PRINCIPLE? ARE
THEY ELIGIBLE TO GO FROM
DEFERRALS TO CUTS, CERTAINLY.
THAT COULD BE PART OF THE
DISCUSSION. BUT AGAIN, YOU KNOW,
I WOULDN'T WANT TO SPECULATE.
THANK YOU. ANY OTHER QUESTIONS?
COMMENTS, COLLEAGUES? OKAY,
SENATOR BARRASSO OH, SORRY, I MY
APOLOGIES, SENATOR RUSSO. AND
THEN WE'LL GO BACK TO THE VICE
CHAIR. OKAY. MY APOLOGIES. I
JUST WANTED TO ASK, HOW WERE
THINGS, WE'RE GETTING A LOT OF
FEDERAL FUNDING RIGHT ON FROM
DIFFERENT PROGRAMS. IT'S A LOT
OF MONEY, AND ONE OF MY CONCERNS
HAS BEEN HAS BEEN FOR SEVERAL
YEARS IS WORKFORCE DEVELOPMENT
IS HOW DO WE PREPARE? HOW DO WE
MAKE SURE THAT WE'RE GOING TO
HAVE THE WORKFORCE TO DO THE
THINGS THAT WE'RE DOING AROUND
CLIMATE INFRASTRUCTURE? MANY OF
THOSE THINGS. AND SO WE'RE IN A
VERY UNIQUE POSITION OF HAVING A
LOT OF FEDERAL FUNDING COMING IN
FOR THOSE KINDS OF THINGS. WE
DON'T HAVE THE STATE DOLLARS,
HOW DO HOW DO YOU ADDRESS THAT
SPECIFICALLY AROUND WORKFORCE
DEVELOPMENT? BECAUSE ONE OF ONE
OF JUST FOR, FULL EXPOSURE HERE,
I HAVE A BILL THAT TALKS ABOUT
SETTING ASIDE A PERCENTAGE OF
THAT FEDERAL DOLLARS,
SPECIFICALLY FOR WORKFORCE
DEVELOPMENT, BECAUSE WE DON'T
HAVE MONEY RIGHT NOW. WE DON'T
HAVE MONEY ALLOCATED ON
WORKFORCE DEVELOPMENT. AND SO
WHY WOULDN'T WE DO THAT? TO MAKE
SURE THAT WE HAVE THE ONGOING
TRAINING AND DEVELOPMENT OF, OF
CALIFORNIANS FOR THE NEEDS THAT
WE HAVE. OTHERWISE WE'RE GOING
TO FIND OURSELVES ONE YEAR, NOT
BEING ABLE TO MEET THOSE
WORKFORCE NEEDS. SO I
SPECIFICALLY WAS, TALKING ABOUT
THE, CALIFORNIA JOBS FIRST
PROGRAM BECAUSE IT HAS, YOU
KNOW, A, YOU KNOW, WE'RE LOOKING
FOR EQUITY, WE'RE LOOKING FOR
GOOD JOBS, BUT WE ALSO, MORE
IMPORTANTLY, WE NEED THE DOLLARS
FOR, FOR THE TRAINING AND
APPRENTICESHIPS. HI. GOOD
MORNING, THERESA CALVERT WITH
DEPARTMENT OF FINANCE, FOR THE
CALIFORNIA JOBS FIRST. THAT IS
PROPOSED AS A DELAY WITH SOME
OUTYEAR FUNDING OR SOME FUNDING
SHIFTING TO THE OUT YEARS, I AM
NOT AWARE OF ANY FEDERAL FUNDING
LOSS ASSOCIATED WITH THAT. WE
CAN DEFINITELY TAKE THAT
QUESTION BACK. AND SEE WHAT IF
WE HAVE MORE INFORMATION ABOUT
THE LINKAGE TO FEDERAL FUNDING.
BUT I'M NOT TRACKING LIKE A LOSS
OF, FEDERAL FUNDING ASSOCIATED
WITH THAT. THAT DELAY. YEAH. I'M
SORRY, DID I IF I'M, I MADE A IF
YOU IF I SAID IT WRONG, I DIDN'T
MEAN TO IS I THOUGHT THAT THIS
WAS AN OPPORTUNITY FOR US TO
TAKE SOME OF THOSE FEDERAL
DOLLARS AND SPECIFICALLY PUT
THEM INTO WORKFORCE DEVELOPMENT.
THAT'S NOT THAT WE WERE GOING TO
LOSE THEM. BUT WHY WOULDN'T WE
TAKE THOSE FUND FUNDS AND USE
THEM FOR WORKFORCE DEVELOPMENT
WHEN THEY'RE AVAILABLE TO US?
NO. AND THE ADMINISTRATION IS
DEFINITELY LOOKING AT MANY
DIFFERENT OPPORTUNITIES TO PULL
DOWN FEDERAL FUNDS WHERE
AVAILABLE. AND SO THAT
DEFINITELY REMAINS, A FOCUS TO
DRAW DOWN AS MUCH OF THOSE
FEDERAL FUNDS SPECIFICALLY FOR
WORKFORCE DEVELOPMENT. MY
QUESTION. AND I DON'T I DON'T
KNOW THE LINKAGE TO THIS, THIS
DELAY AND HOW THAT WOULD IMPACT
OUR ABILITY TO DRAW DOWN THOSE
FEDERAL FUNDS FOR WORKFORCE
DEVELOPMENT, OR IF THOSE FEDERAL
FUNDS COULD BE USED IN SIMILAR
IN A SIMILAR VEIN TO WHAT THESE
FUNDS ARE ALSO TO BE USED FOR.
YEAH, THE IT'S ABOUT SETTING
ASIDE THE FEDERAL DOLLARS
SETTING, SPECIFICALLY SETTING
ASIDE FEDERAL DOLLARS FOR
WORKFORCE DEVELOPMENT. IT'S NOT
THAT WE'LL LOSE THE DOLLARS,
IT'S WHAT WE DO WITH THE
DOLLARS. THAT'S THE REAL ISSUE.
OKAY. AND I WILL DEFINITELY TAKE
THAT CONCERN. AND NOTE THAT BACK
IF THAT HELPS. THANK YOU. I
THANK YOU, WAS THAT SENATOR NILO
AND THEN SENATOR MENGIBAR? THANK
YOU, MR. CHAIR, FOR ALLOWING ME
A SECOND COMMENT. FIRST OF ALL,
I WANT TO APPLAUD SENATOR BLAKE
SPEERS LINE OF QUESTIONING AND
THE SPIRIT BEHIND IT, BECAUSE I
ALSO HAVEN'T HEARD MUCH ABOUT
ASSESSING THE EFFICACY OF
EXISTING PROGRAMS AND GETTING
RID OF THOSE THAT DON'T WORK.
AND A PERFECT EXAMPLE OF THAT
CAME OUT JUST YESTERDAY WITH
REGARD TO THE HOMELESS AUDIT.
AND INSOFAR AS THE EXPERIENCE OF
SAN DIEGO, SAN DIEGO AND SAN
JOSE IS CONCERNED, MUCH OF OUR
THIS IS AFTER THE FACT,
UNFORTUNATELY. BUT MUCH OF OUR
HOMELESS SPENDING, HAS APPEARED
TO BE, INEFFECTIVE, LARGELY
BECAUSE WE'RE NOT REALLY
TRACKING AND REPORTING ON IT,
WHICH IS UNFORTUNATE, BUT I
THINK SHE RAISES A VERY GOOD
POINT. BUT BUT TO, CONCLUDE MY
STATEMENT AND IN THE INTEREST OF
TRANSPARENCY AND FOR PERHAPS A,
A BIT OF COMIC RELIEF, I THINK
IT'S IMPORTANT IN A PUBLIC
HEARING, THIS PUBLIC HEARING TO
POINT OUT ONE WHAT I'LL CALL
WHAT I LIKE TO CALL THE MOTHER
OF ALL GIMMICKS THAT WILL BE
PART OF THE BROADER $17 BILLION
PACKAGE. AND THAT IS THAT WE
WILL RECOGNIZE ABOUT A BILLION
AND A HALF DOLLARS IN BUDGET
SAVINGS BY TRANSFERRING THE
PAYROLL THAT WILL BE PAID ON THE
LAST DAY OF THE FISCAL YEAR TO
THE NEXT DAY OF THE NEXT FISCAL
YEAR. IT IS ABSOLUTELY NO
SAVINGS WHATSOEVER WITH REGARD
TO A CASH PERSPECTIVE. IT IS
ONLY A BUDGET GIMMICK THAT
RECOGNIZES 1.6 BILLION IN
SAVINGS BY DELAYING RECOGNITION
OF A PAYMENT BY 24 HOURS. I
THINK IT'S IMPORTANT FOR
EVERYBODY TO KNOW THAT THAT'S
PART OF THE BUDGET SOLUTIONS
WE'RE TALKING ABOUT. THANK YOU
SO MUCH. I'D FORGOTTEN ANOTHER
QUESTION ON THE ANALYSIS. THE
LAST POINT, A POINT 61 REGARDING
YOU KNOW, THE, THE LIST OF
ADJUSTMENTS TO COMMITMENTS
RELATED TO PAST BUDGET
AGREEMENTS AND THEN ALSO INCLUDE
THE INTENT FOR USE OF RESERVES.
DO YOU HAVE ANYTHING YOU COULD
SHARE ON? WHAT WOULD WHAT WE
WILL SEE ON THAT LIST? IN TERMS
OF, I THINK THERE'S TWO PIECES
TO THE LIST. CERTAINLY THERE'S A
REQUIREMENT THAT, FOR AT LEAST
THE BUDGET YEAR, PIECES OF THE
PACKAGE THAT HAVE BEEN
IDENTIFIED THAT THERE WOULD BE A
LETTER THAT IDENTIFIES WHAT
THOSE ARE, IN TERMS OF, YOU
KNOW, WHAT WOULD COME FROM
POTENTIAL FREEZES OR PAUSING OF
ONE TIME ALLOCATIONS OR OTHER
ALLOCATIONS IN 21, 22 AND 23, I
COULDN'T SPEAK TO THE SPECIFICS
OF THAT AT THIS POINT. THAT IS
STILL SUBJECT TO ADDITIONAL
CONSIDERATION. SO IT'S FREEZES
OF ONE TIME ALLOCATIONS. WHAT
WERE THE OTHER POTENTIAL OPTIONS
THAT WE COULD SEE ON THIS LIST?
SO I THINK, IN TERMS OF WHAT YOU
WOULD SEE, I THINK THE LANGUAGE
IS TWO THINGS. THERE IS A LIST
OF WHAT IS IN THE PACKAGE THAT
WOULD COME BEFORE YOU, THAT
WOULD BE INCLUDED IN THE FINAL
BUDGET AGREEMENT BECAUSE WE ARE
NOT, PROPOSING AT THIS POINT IN
TIME, THE ACTUAL BUDGET BILL.
AND THEN THE SECOND PIECE TO
THAT IS, OF THE FUNDS THAT ARE
BEING PAUSED, WE WOULDN'T BE
ABLE TO TELL YOU WHAT WOULD BE
ON THAT PARTICULAR LIST AT THIS
POINT IN TIME FOR ADDITIONAL
CONSIDERATION. THAT WOULD BE
BROUGHT TO THE LEGISLATURE. I
WOULD DEFER TO MY COLLEAGUE LISA
MROZINSKI FOR ADDITIONAL
DETAILS. GOOD MORNING. LISA
MROZINSKI WITH DEPARTMENT OF
FINANCE. SO THAT LIST, IN THIS
PACKAGE, THE LIST WILL RESEMBLE
THIS, IT'S PRETTY MUCH WHAT IS
IN THE BUDGET AGREEMENT. AND WE
WILL THEN PUT THAT FORWARD IN A
JLBC LETTER. THANK YOU. AND IF I
MAY JUST TO ADD TO, SENATOR
NELLO'S PREVIOUS COMMENT, I
WOULD JUST SAY THAT WE VIEW THE
PAYROLL DEFERRAL AS PART OF OUR
OVERALL BUDGET RESILIENCE, AND
WE THINK THAT IT'S A REASONABLE
COMPONENT OF WHAT WE PUT FORWARD
. SENATOR WILL HAVE. THANK YOU,
YOU KNOW, JUST JUST GOING OVER
THIS AND COMPARING IT, TO CITY
COUNCIL AS, AS SENATOR BLAKE
SPEER MENTIONED, OFTENTIMES, YOU
KNOW, WE HAVE HEARD A LOT IN THE
MEDIA AND SO FORTH THAT WE'RE
KIND OF IN A SILENT RECESSION, I
WILL SAY, IN MY DISTRICT IN
PARTICULAR, WE ARE SEEING A
SIGNIFICANT AMOUNT OF LAYOFFS IN
THE TECH INDUSTRY IN THE BAY
AREA, LITERALLY THOUSANDS AT
THIS POINT, AND WE HAVEN'T
NECESSARILY SEEN THE IMPACT.
RIGHT, AND THE TALKING POINTS
AMONGST A LOT OF ELECTEDS IS
THAT WE'RE THE FOURTH LARGEST
ECONOMY IN THE WORLD, AND IT'S
ALSO NOT VERY CLEAR TO THE
LARGER PUBLIC AS TO WHY WE ARE
IN A RECESSION, CONSIDERING THAT
2 TO 3 YEARS AGO WE HAD SUCH A
SURPLUS RIGHT. A RECORD BREAKING
SURPLUS, IF YOU WILL. I WOULD
HAVE TO SAY THAT, YOU KNOW,
GIVEN SITTING ON A BUDGET
SUBCOMMITTEE AND OBVIOUSLY ON
THIS COMMITTEE AND HAVING A LOT
OF CONVERSATIONS, I THINK THAT
WE NEED TO DO A BETTER JOB OF
EDUCATING FOLKS AS TO WHY WE ARE
IN THE POSITION WE ARE IN NOW.
NUMBER ONE, I THINK THAT'S FIRST
AND FOREMOST TO JUST EXPLAIN
EXACTLY WHAT THAT LOOKS LIKE.
AND WHY. AND I THINK THAT THE
GOVERNOR DID A GREAT JOB WHEN
SPEAKING TO US AS TO WHY WE'RE
IN THAT POSITION. AND VERY
SIMPLE TERMS. RIGHT, NUMBER ONE,
NUMBER TWO IS, I THINK, TO
SENATOR BLAKE SPEERS, COMMENTARY
AS TO THE EFFICACY OF PROGRAMS
AND PROJECTS AND EFFORTS THAT
WE'RE DOING, YOU KNOW, AUDITS
ARE ONE THING, RIGHT? AND WE'RE
LOOKING AT AUDITS AS TO, YOU
KNOW, DID THE NUMBER OF FUNDS
THAT WENT IN COME OUT AND SO
FORTH, BUT WE'RE NOT NECESSARILY
LOOKING AT SUCCESS MODELS. WE
DON'T WE REALLY DON'T. WHAT IS
THE DEFINITION DEFINITION OF
SUCCESS, WHETHER WE'RE TALKING
ABOUT WORKFORCE DEVELOPMENT AND
WHAT THAT REALLY LOOKS LIKE. AS
MANY OF THE MEMBERS HERE ON THIS
COMMITTEE HAVE TALKED ABOUT, WE
ALSO DON'T TAKE A LOOK AT, YOU
KNOW, WHAT DOES SUCCESS LOOK
LIKE IN THE REHABILITATION OF AN
INDIVIDUAL THAT IS SERVING TIME
RIGHT, AND THAT'S NOT CLEARLY
LAID OUT PROGRAM PER PROGRAM PER
PROGRAM. AND, YOU KNOW,
OFTENTIMES I THINK THAT FROM OUR
REPUBLICAN COLLEAGUES, WE HEAR
OFTENTIMES THAT WE HAVEN'T BEEN
GIVEN ENOUGH TIME TO DISCUSS
THIS. RIGHT. AND I THINK THAT
THAT IS ACCURATE CONSIDERING,
THE AMOUNT OF MONEY WE'RE
TALKING ABOUT HERE. RIGHT. AND
I'LL LET YOU GUYS SAY WHAT YOU
NEED TO SAY BEFORE I GO ON. I'M
GOING TO HIT A COUPLE POINTS. SO
I JUST WANT TO GO AHEAD. WELL,
SENATOR WEBB, THIS IS GABE
PADDOCK FROM THE LEGISLATIVE
ANALYST'S OFFICE. AND I WOULD
JUST POINT OUT, I THINK YOU
RAISE A REALLY IMPORTANT
QUESTION ABOUT WHAT'S GOING ON
IN THE ECONOMY AND HOW IT'S
AFFECTING CALIFORNIA AND OUR
FISCAL PICTURE IN PARTICULAR,
FOR ANYBODY WATCHING OR FOR ANY
OF THE MEMBERS, I WOULD
HIGHLIGHT THAT WE DO HAVE A
PLACE ON OUR WEBSITE, ACTUALLY,
THE ECONOMY AND TAXES BLOG THAT
WE'VE BEEN KIND OF TRACKING ALL
OF THIS AND IN FACT, IF WE GO
BACK TO MAY OF 2022, WE BEGAN
HIGHLIGHTING SOME OF THE REASONS
WE HAD SOME CONCERN ABOUT THE
ECONOMY. AND I THINK YOU'RE
RIGHT, IT KIND OF WENT UNDER THE
RADAR A LITTLE BIT, BUT, EARLIER
IN, THIS PAST YEAR, IN SUMMER OF
2023, WE NOTED THAT IT DID
APPEAR LIKE CALIFORNIA
EXPERIENCED SOMETHING LIKE A
RECESSION IN LATE 2022 AND EARLY
2023, EMANATING PRIMARILY FROM
WHAT WAS GOING ON IN THE TECH
SECTOR. A PULLBACK OF INVESTMENT
, AND THEN THAT HAVING A LOT OF
RIPPLE EFFECTS FOR ALL THE
SUPPORTING INDUSTRIES. AND SO
REALLY, THE FOURTH QUARTER OF
2022, EARLY FIRST QUARTER OF
2023 IS WHAT LOOKED LIKE THAT.
AND IT SEEMED TO KIND OF
CORRESPOND WITH WHAT WE WERE
SEEING IN OUR REVENUE TRENDS.
AND OTHER SUPPORTING INDICATIONS
WERE A VERY PRONOUNCED DROP OFF
IN IPO ACTIVITIES AND A DECLINE
IN VENTURE CAPITAL INVESTMENT.
AND SO WHILE THE STOCK MARKET
HAS BEEN APPRECIATING RAPIDLY,
AND A LOT OF TIMES FOLKS THINK
THAT THAT'S BENEFICIAL FOR
CALIFORNIA AND IT IS, IT NEEDS
TO STAY UP FOR A WHILE, AND IT
ALSO NEEDS TO BE ACCOMPANIED BY
THIS REJUVENATION OF INVESTMENT
IN THAT SECTOR, IN PARTICULAR
FOR CALIFORNIA, NOW, TODAY WE
JUST HAD A VERY HIGHER THAN
EXPECTED INFLATION REPORT. AND
IT SAW ANOTHER, YOU KNOW,
VOLATILITY IN THE MARKET. SO
THIS REMAINS TO BE SEEN WHAT THE
EFFECTS WILL BE. BUT I THINK I
THINK YOU'RE RAISING AN
IMPORTANT POINT. AND I THINK I
JUST WANTED TO SAY LIKE WE HAVE
BEEN CAUTIONING ABOUT THIS AND
SO NO, I APPRECIATE YOUR
COMMENTARY. I ALSO JUST WANT TO
HIGHLIGHT THAT WHEN THE STOCKS
ARE UP AND WE'VE SEEN THAT
ACROSS THE BOARD, WE ALSO KNOW
THAT THAT IS USUALLY A POTENTIAL
SIGNAL THAT IT'S ALSO GOING TO
DROP. AND WE'RE GOING TO HIT A
TRUE RECESSION, IF YOU WILL.
THERE ARE PLENTY OF REPORTS OUT
TODAY THAT HIGHLIGHT THAT
CORRECT. IT'S ALWAYS THERE'S
ALWAYS A POSSIBILITY THAT YOU
CAN SEE A RECESSION IN THE
FUTURE. WHAT I JUST WANTED TO
ADD IS, AS OF THE GOVERNOR'S
BUDGET, WE DID NOT PROJECT A
RECESSION IN THE PACKAGE THAT
WAS PUT BEFORE YOU. ALL RIGHT. I
THINK YOU KNOW, GRANTED, THIS IS
THE BUDGET BILL, JUNIOR, AND A
LOT OF THE THINGS THAT ARE
LISTED HERE, I CAN SUPPORT
SPECIFICALLY, FOR EXAMPLE, THE
BROADBAND ACCESS S, YOU KNOW,
WE'RE TRYING TO DO AS MUCH AS WE
CAN IN REGARDS TO INSURANCE
INFRASTRUCTURE, ALL THE ISSUES
THAT THAT AFFECT PEOPLE TODAY,
CLIMATE, YOU KNOW, PLANNING AND
SO FORTH. AND I, I DO THINK TO
BE CAUTIOUS AND OVERLY CAUTIOUS,
CONSIDERING THAT THERE ARE OTHER
REPORTS FROM DIFFERENT AGENCIES
THAT STATE THAT, YOU KNOW, WE
ARE GOING TO SEE A RECESSION. WE
ARE GOING TO SEE PEOPLE
STRUGGLE. WE ARE ALREADY SEEING
A LOT OF DIFFERENT ISSUES IN
REGARDS TO, INSURANCES BEING
CANCELED. WHAT DOES THAT MEAN
FOR HOMEOWNERS? WE ARE SEEING
PUBLIC UTILITIES RISE BEYOND A
LEVEL THAT'S NORMAL. THAT HAS
NOT HISTORICALLY BEEN DONE. WE
ARE SEEING PEOPLE AGAIN IN MY
DISTRICT, THE AMOUNT OF LAYOFFS,
RIGHT. AND GRANTED, THESE ARE
HIGH EARNING JOBS. AND I'M SURE
THAT, YOU KNOW, A CHUNK OF THEM
HAVE A DECENT SAVINGS FOR, YOU
KNOW, A COUPLE MONTHS OR SO, BUT
THAT'S NOT THE CASE ACROSS THE
BOARD. RIGHT. AND SO PLANNING
FOR A RECESSION, ESPECIALLY AS
WE'RE TALKING ABOUT A BUDGET AND
GRANTED, EVEN IN THIS BUDGET AND
EVEN THE FISCAL OUTLOOK FOR THE
STATE OF CALIFORNIA, IT'S NOT
JUST THIS YEAR. WE'RE LOOKING AT
A DOWNTURN FOR THE NEXT, WHAT,
THREE YEARS OR SO? RIGHT I THINK
THAT WE HAVE TO BE EVEN MORE.
CONSERVATIVE ON WHAT WE'RE
PLANNING, SO I STATE THAT NOW
AND VERY PUBLICLY TO YOU ALL,
BECAUSE I AM DEEPLY CONCERNED
ABOUT THAT. I THINK THAT THERE
ARE PLENTY OF PROGRAMS THAT I
SEE EVEN IN MY BUDGET. SUB FIVE
THAT IS REDUNDANT, REPETITIVE
AND TO ME IS NOT A SUCCESSFUL
MODEL. RIGHT. AND AGAIN, WHAT
ARE THOSE MEASURES? WHAT ARE WE
HOLDING AS AN ACCOUNT FOR
SUCCESS. RIGHT. SO I WANT TO
HIGHLIGHT THIS. I ALSO WANT TO
SAY THAT, YOU KNOW, THE CHAIR,
HAS JUST STEPPED OUT, BUT, I
THINK FOR ME AND A LOT OF OTHER
FOLKS, THE NUMBER ONE CONCERN IS
GOING TO BE THE MOST VULNERABLE
COMMUNITY MEMBERS, RIGHT? IT'S
OUR UNINSURED. IT'S OUR,
UNHOUSED. IT'S A NUMBER OF
DIFFERENT THINGS THAT I'M GOING
TO CARE ABOUT, AND I STATE THIS
BECAUSE, YOU KNOW, MY FAMILY
DURING THE GREAT RECESSION, OUR
SMALL FAMILY BUSINESS TANKED.
RETAIL IS THE FIRST TO TANK AND
THE FIRST THAT BUSINESS OWNERS
WILL SEE. RIGHT? THE SECOND IS
HOUSING. HOW DO YOU PAY FOR YOUR
HOME? AND OUR FAMILY HOME WAS
FORECLOSED UPON. RIGHT. AND I
WILL SAY AGAIN, THE GOVERNMENT
BAILED OUT THE BANKS TWICE. THEY
NOT ONLY PROVIDED, YOU KNOW, THE
FEDS PROVIDED A BAILOUT TO THE
BANKS, BUT THEN THEY THE BANKS
ALSO KEPT THE ASSET. SO TO ME,
THAT'S TWICE DOUBLE DIPPING,
RIGHT? AND LITERALLY MILLIONS OF
AMERICANS SUFFERED AND CONTINUE
TO SUFFER. I'M STILL A RENTER. I
DON'T SEE MYSELF BEING A
HOMEOWNER IN A NUMBER OF YEARS.
SO I SAY THIS BECAUSE THOSE ARE
THE PEOPLE WE NEED TO THINK
ABOUT. WE HAVE ALSO A GROWING
SENIOR POPULATION IN THAT IS THE
FASTEST GROWING HOMELESS
POPULATION, AND WE DON'T HAVE
ENOUGH SERVICES. SO WHEN WE'RE
TALKING ABOUT MEDI-CAL IN
PARTICULAR, AND GRANTED, AS A
BIG TICKET ITEM, WE NEED TO
PROVIDE MORE SERVICES AROUND
THESE WRAPAROUND SERVICES, MORE
SUPPORT THERE FIRST AND
FOREMOST. AND PROTECTING THEM,
RIGHT. FOR THE AVERAGE PUBLIC,
EVERYTHING ELSE WE'RE GOING TO
HAVE TO TIGHTEN OUR BELTS ON.
BUT BUT I SAY THIS IN SUPPORT OF
THIS, YOU KNOW, EARLY ACTION,
YOU KNOW, I KNOW THAT A LOT OF
PEOPLE HAD A LOT OF DISCUSSIONS,
MYSELF INCLUDED, BUT I DO
APPRECIATE THE WORK. BUT I ALSO
WANT TO CAUTION EVERYBODY THAT
WE NEED TO THINK EVEN MORE LONG
TERME THAN JUST THIS BUDGET IN
FRONT OF US. THANK YOU. THANK
YOU. SENATOR. MAN THANK YOU. AND
I JUST WANTED TO BUILD ON SOME
OF THOSE COMMENTS FROM SENATOR
WAHAB. I THINK, AT A PREVIOUS
BUDGET HEARING, MAYBE A BUDGET
SUB HEARING, I HAD ASKED WHETHER
WE HAD DATA, ON ON THE QUESTION
OF HOW MUCH OF THIS DECLINE IN
REVENUES WAS DUE TO, CYCLICAL
ECONOMIC ISSUES VIS A VIS THE
PROBLEM OF POTENTIALLY PEOPLE
AND COMPANIES LEAVING THE STATE.
AND, I GUESS MY FIRST QUESTION
TO YOU IS JUST DO WE HAVE ANY
ADDITIONAL DATA SINCE THAT TIME?
I'D HAVE TO DEFER TO MY
COLLEAGUES, WHAT I CAN SAY, YOU
KNOW, TO BOTH QUESTIONS, THOUGH,
IS, ARE BOTH COMMENTS, IS THAT
THE ADMINISTRATION REMAINS
FOCUSED ON EQUITY. THAT IS ONE
OF THE DRIVING PRINCIPLES AS WE
THINK ABOUT INVESTMENTS. SO
CERTAINLY WE CAN ASSOCIATE WITH
AND APPRECIATE THE COMMENTS
AROUND KEEPING A FOCUS ON EQUITY
AS WE THINK ABOUT THE DECISIONS
BEFORE US. UNFORTUNATELY, I
DON'T HAVE, MY, ECONOMICS TEAM
WITH ME TODAY, SO WE WILL HAVE
TO GET BACK TO YOU. LOOKS LIKE
MR. PADDOCK HAS SOME. YEAH,
THANK YOU, SENATOR MINH. I'LL
JUST SAY, OUR OFFICE HAS BEEN
AWAITING SOME DATA THAT WILL
COME OUT FROM THE, CENSUS
BUREAU. FEDERAL DATA THAT WE
NEED TO DO A DEEPER DIVE ON THAT
QUESTION. WE'RE EXPECTING THAT
TO BE IN MAY, THERE'S A LAG WITH
THAT DATA. THE BEST INFORMATION
THAT WE HAVE GOES BACK A COUPLE
OF YEARS. THE MOST RECENT DATA,
THAT IS. AND IT SUGGESTS THAT IN
, IN, 2021, WE SAW, $27 BILLION
WORTH OF GROWTH IN THE PERSONAL
INCOME TAX CATEGORY. AND WE
ESTIMATE THAT IT MAY HAVE BEEN
CLOSER TO 29 BILLION ABSENT THE
OUTMIGRATION THAT YOU
REFERENCED. AND SO, IT'S
CERTAINLY NOT A CONCERN THAT I
THINK SHOULD BE DISMISSED, BUT
IT'S NOT EXPLAINING THE, OVERALL
LARGE PORTION OF THE REVENUE,
THAT WE ARE MISSING COMPARED TO
RECENT YEARS IN THE CURRENT
BUDGET. IT'S NOT EXPLAINING THE
BUDGET DEFICIT, IN OTHER WORDS.
SO JUST TO CLARIFY WHAT THERE
SEEMS TO BE A CYCLICAL COMPONENT
TO THIS THAT'S QUITE SIZABLE.
THAT'S UNKNOWN. THAT'S UNKNOWN.
WE WE'VE SEEN AN INCREASE IN THE
OUTMIGRATION, INCLUDING AMONG
THE HIGHER INCOME TAXPAYERS, AND
THAT INCREASE REACHED ITS HIGH
POINT IN 2021. WE DON'T KNOW IF
THE TREND HAD CONTINUED OR
LEVELED OFF OR SLOWED DOWN. AND
THAT'S THE DATA THAT WE ARE
AWAITING. BUT AT THAT POINT, IT
REPRESENTED A COUPLE BILLION
DOLLARS WORTH OF MISSING
REVENUE, IS WHAT WE ESTIMATE. I
APPRECIATE THAT, AND I THINK
IT'S REALLY IMPORTANT THAT WE
FIGURE OUT, AND I THINK THIS
POINT HAS BEEN RAISED BY SEVERAL
OF MY COLLEAGUES. TO WHAT DEGREE
IS THIS A BLIP, VIS A VIS TO
WHAT DEGREE MIGHT WE EXPECT TO
SEE MORE SECULAR, DECLINES IN
REVENUES GOING FORWARD? I'LL
JUST BE HONEST. THIS SUCKS. THIS
IS THE FIRST YEAR IN MY TIME AS
A SENATOR WHERE WE FACED MAJOR
CUTS, PREVIOUSLY WE HAD, YOU
KNOW, SURPLUSES AS LARGE AS WE
COULD IMAGINE. AND OBVIOUSLY,
THAT'S A I'M SITTING UP HERE.
THAT'S A MUCH MORE FUN TIME,
WHEN YOU'RE TALKING ABOUT HOW TO
DISPENSE MONEY UNFOUND MONEY, SO
TO SPEAK. BUT I THINK WE DO NEED
TO CONSIDER OUR THE EXTENT TO
WHICH THE POLICIES THAT OUR
AGENCIES ARE PASSING, THE LAWS
THAT WE'RE PASSING, YOU KNOW,
REFLECT EQUITY, WHICH I THINK IS
REALLY, REALLY IMPORTANT, BUT
ALSO TO THE EXTENT THAT THEY
ALSO FACILITATE A STRONG ECONOMY
GOING FORWARD, BECAUSE I THINK
IF WE WANT TO CONTINUE TO HAVE
EQUITY, WE NEED TO HAVE THE
FUNDS TO BE ABLE TO TRY TO
FACILITATE THAT. AND THIS IS
POTENTIALLY AN ONGOING PROBLEM.
I THINK WE'RE STARTING TO SEE
SIGNS, YOU KNOW, WE SAW 75,000
PEOPLE, ACCORDING, I THINK, TO
POLITICO, LEAVING THE STATE IN
THE LAST YEAR, I THINK A LOT OF
THOSE ARE HIGH EARNERS, AND SO
BECAUSE OUR TAX REVENUES ARE SO
DEPENDENT ON THAT TOP 0.1, I
THINK THIS IS SOMETHING WE NEED
TO START THINKING ABOUT AND
POTENTIALLY STUDYING A LOT MORE.
THANK YOU. THANK YOU, SENATOR
BECKER. THANK YOU, YEAH. TO
FOLLOW UP ON THAT. SO YOU SAID
WE HAVE DATA FOR 21. WE DON'T
HAVE THAT 22 DATA YET. IS THAT
WHAT YOU SAID? THAT'S CORRECT.
THAT IS CORRECT, SENATOR. YES.
YEAH. I JUST WANT TO EXPRESS MY
FRUSTRATION. YOU AND I HAVE HAD
THIS CONVERSATION AS WELL. BUT,
YOU KNOW, BECAUSE I REPRESENT MY
DISTRICT, HAS A LOT OF THOSE
HIGH EARNERS AND PAYS A LOT OF
THOSE TAXES. AND I PERSONALLY
KNOW, YOU KNOW, A LOT OF HIGH
EARNERS WHO HAVE LEFT. AND SO
IT'S JUST BEEN FRUSTRATING THAT
WE CAN'T GET THAT DATA MORE
QUICKLY, SO THAT WE CAN BE MORE
NIMBLE IN OUR REACTION. AND I
DON'T I'M NOT ASKING FOR A
COMMENT ON IT NOW, BECAUSE I
KNOW WE'VE TALKED ABOUT IT AND
IT'S PROBABLY MORE COMPLICATED
TO FIGURE OUT THE SOLUTION, BUT
IT'S JUST IT'S FRUSTRATING THAT
IT TAKES US SO LONG, YOU KNOW,
TO, TO GET THAT KIND OF
INFORMATION. YEAH. I WOULD NOTE
FOR THE ADMINISTRATION, WE DO
TAKE ECONOMIC CONDITIONS INTO
ACCOUNT WHEN WE DEVELOP OUR
REVENUE PROJECTIONS. SO YOU
WOULD LIKELY SEE, UPDATED
REVENUE PROJECTIONS AS PART OF
THE MAY REVISION. THOSE
CONVERSATIONS WOULD CONTINUE
INTO THE FINAL BUDGET AGREEMENT.
AND I THINK PART OF WHAT YOU'RE
YOU'RE ALLUDING TO AND WHAT WHAT
YOU'RE SEEING IS IT'S BECAUSE OF
THE HIGH THAT WE SAW IN THE 21,
22 AND 2223 BUDGETS THAT WERE
REALLY FEELING THE THAT NET
IMPACT RIGHT NOW. SO, SO I JUST
NOTE THAT. ANY OTHER QUESTIONS
OR COMMENTS, SEEING NONE, WE
WILL MOVE TO PUBLIC COMMENT. AND
SO ANYONE WHO WANTS TO GIVE
PUBLIC COMMENT, YOU CAN LINE UP
AT THE MICROPHONE. WE WOULD ASK
IF FOLKS COULD PLEASE KEEP THEIR
PUBLIC COMMENT, IF POSSIBLE, TO
ONE MINUTE. GOOD MORNING, CHAIR
MEMBERS. MY NAME IS KENDRA
HARRIS WITH THE CLIMATE CENTER.
LAST WEEK WE SUBMITTED A
COALITION LETTER REPRESENTING A
BUNCH OF ENVIRONMENTAL GROUPS
ABOUT THE BUDGET ENVIRONMENT,
CALIFORNIA COALITION FOR CLEAN
AIR LEADERSHIP COUNCIL AND
JUSTICE AND OTHERS, A RECENT
REPORT RELEASED BY NEXT HIÆN
SHOWS THAT WE ARE NOT ON TRACK
TO MEET OUR 2030 CLIMATE GOALS
AND CUTS TO INVESTMENTS WILL
ONLY MAKE THIS REALITY WORSE.
CUTS TO CRITICAL CLEAN AIR AND
CLIMATE PROGRAMS HAVE A REAL,
IMMEDIATE HUMAN CONSEQUENCES.
LATER IS TOO LATE TO PROTECT
CALIFORNIANS, ESPECIALLY
POLLUTION BURDENED COMMUNITIES
OF COLOR. AS WE CONSIDER WHAT
EXPENDITURES SHOULD BE SHIFTED
FROM THE GENERAL FUND TO GRF, WE
NEED TO PRIORITIZE THOSE THAT
PRODUCE CLEAN AIR, PUBLIC HEALTH
AND EQUITY BENEFITS. WE FACE AN
AFFORDABILITY CRISIS WITH
ELECTRICITY IN CALIFORNIA,
HELPING RESIDENTS MOVE TO
CHEAPER AND SAFER CLEAN ENERGY
AND CLEANER APPLIANCES IS ONE OF
THE MOST IMPORTANT THINGS WE CAN
DO TO IMPROVE AFFORDABILITY,
HEALTH AND ENSURE THAT OUR KIDS
GET A SHOT AT THRIVING FUTURE.
THANK YOU. NEXT SPEAKER HI DARBY
KERNAN ON BEHALF OF GRACE ENDING
CHILD POVERTY IN CALIFORNIA, WE
WANT TO APPRECIATE AND THANK
SENATOR MENGIBAR FOR HER
QUESTIONS REGARDING SECTION 74
AND 77 WITH THE RELATION TO THE
FREEZE, WE'RE REALLY CONCERNED
THAT THIS MOVES A LOT OF
IMPORTANT PROGRAMS THAT YOU'VE
INVESTED IN TO A PROCESS MÁS
THAT IS NOT PUBLIC AND GOES
THROUGH THE JLBC AND SO MANY
CUTS TO PROGRAMS OR FREEZES WILL
HAPPEN TO THINGS YOU'VE INVESTED
IN. AND WE KNOW THAT THIS IS
SOMETHING YOU HAVE TO DO, BUT
WE'RE VERY CONCERNED THAT THIS
PROCESS MOVES FROM THE PUBLIC
PROCESS TO SOMETHING THAT IS
LESS PUBLIC. AND SO WE'RE JUST
ASKING TODAY TO THINK ABOUT THAT
AND UNDERSTAND WE WILL BE
MONITORING THAT. AND WE'RE
REALLY HOPING THAT AS WE MOVE
FORWARD WITH CUTS THAT WE ARE
NOT FOCUSED ONLY ON THE MOST,
POOR AND, FAMILIES AND CHILDREN
THAT ALREADY ARE SUFFERING
THROUGH THIS ECONOMY. THANK YOU.
NEXT SPEAKER, HONORABLE CHAIR
AND MEMBERS, MY NAME IS AMY
HINES-IKE WITH WILDCAT
CONSULTING, REPRESENTING THE
CALIFORNIA COMMUNITY LAND TRUST
NETWORK. WE ARE APPRECIATIVE OF
THE DIFFICULT POSITION THAT YOU
ARE IN DURING THIS CHALLENGING
BUDGET TIME. ALL 40 AFFILIATE
COMMUNITY LAND TRUSTS IN THE
STATE OF CALIFORNIA HAVE THE
POSITION THAT WE WANT NO FURTHER
CUTS BEYOND WHAT THE GOVERNOR
PROPOSED, AND WE JUST WANT THE
FORECLOSURE INTERVENTION HOUSING
PRESERVATION PROGRAM TO APPEAR
IN THE PROSPECTIVE YEARS. AS A
BUDGET LINE ITEM. WE NEED TO
APPEAR AS A LINE ITEM SO THAT WE
CAN FIGHT FOR MORE FUNDING
ANOTHER DAY. WE KNOW THAT WE CAN
PROVE HOW VALUABLE THE
FORECLOSURE INTERVENTION HOUSING
PRESERVATION PROGRAM IS, AND
WHEN BUDGETARY CONDITIONS
IMPROVE, WE CAN CLAMOR TO
POPULATE THE FUNDS BACK IN. BUT
IF WE HAVE TO FIGHT TO REAPPEAR
AS A PROGRAM IN THE BUDGET AND
THEN FIGHT FOR FUNDING, IT IS
DOUBLE THE FIGHT, WHICH WOULD BE
UNNECESSARILY DIFFICULT. THANK
YOU VERY MUCH FOR YOUR
CONSIDERATION. HELLO, MY NAME IS
OLIVIA GLEASON AND I'M
AFFILIATED WITH CALIFORNIANS
UNITED FOR A RESPONSIBLE BUDGET.
AS THIS COMMITTEE WORKS TO
MITIGATE BUDGET DEFICIENCIES, I
URGE YOU TO LOOK AT CDCR'S $14.6
BILLION BUDGET AS A SOURCE TO
CUT FUNDS FROM. INSTEAD OF
ESSENTIAL AREAS LIKE CAL WORKS
CLEAN ENERGY AND EARLY EDUCATION
PROGRAMS THAT OFTEN PREVENT
INCARCERATION IN THE FIRST PLACE
AND ACTUALLY SUPPORT OUR
VULNERABLE COMMUNITIES. WE KNOW
THAT THE STATE'S CURRENT DEFICIT
IS NOT A PHENOMENON ON
DEPARTMENTS LIKE CDCR HAVE GONE
UNCHECKED FOR YEARS, WITH THE
PUBLIC HAVING LITTLE
TRANSPARENCY INTO WHERE THE
DEPARTMENT'S MASSIVE BUDGET
SPENDING ACTUALLY GOES TO. WITH
THE LÀ PROJECTING ONGOING
DEFICITS, CUTTING CDCR BUDGET
SPENDING SUCH AS THROUGH SENATOR
WAHAB'S 15% BUDGET CUT PROPOSAL
AND CLOSING PRISONS IS THE
CLEAREST PATH TOWARDS ENSURING
LONG TUM SAVINGS AND MAINTAINING
ESSENTIAL SERVICES. THANK YOU SO
MUCH. THANK YOU. NEXT SPEAKER.
GOOD MORNING. MY NAME IS ALICIA
MONTEIRO. WITH CALIFORNIANS
UNITED FOR A RESPONSIBLE BUDGET.
THE LEGISLATURE LEGISLATIVE
ANALYST'S OFFICE PROJECTS THE
SURPLUS OF 15,000 BEDS, THIS
FISCAL YEAR. AND A SURPLUS OF
19,000 BY 2028, MEANING THAT
CALIFORNIA CAN CLOSE AN
ADDITIONAL FIVE PRISONS WITHOUT
OVERCROWDING. THE ONES THAT ARE
STILL LEFT, WHICH WOULD YIELD AN
ANNUAL OPERATIONAL COST OF 1
BILLION. IN ADDITION TO
SUBSTANTIAL SAVINGS ON
INFRASTRUCTURE REPAIRS, PRISON
CLOSURE AND CDCR BUDGET CUTS ARE
THE CLEAREST PATH TO ADDRESSING
THE STATE'S BUDGET DEFICIENCIES.
THANK YOU, THANK YOU. NEXT
SPEAKER. GOOD MORNING, TIFFANY
PH¢N, ON BEHALF OF CALIFORNIA
COURT APPOINTED SPECIAL ADVOCATE
ASSOCIATION, OR CAL CASA, JUST
TO REMIND THE COMMITTEE, BACK IN
2022, THE LEGISLATURE MADE CASA
A PRIORITY IN ALLOCATING 60
MILLION OVER THREE YEARS FOR
THIS ADVOCACY PROGRAM. NO OTHER
FOSTER CHILD SERVING CHARITABLE
ORGANIZATION HAS THE EQUIVALENT
COURT AUTHORITY, ACCESS AND
ABILITY TO TRULY CHANGE A
CHILD'S LIFE THROUGH COURT
ADVOCACY. CONSIDERING THE
STATISTICS SHOWING APPROXIMATELY
A THIRD OF FORMER FOSTER YOUTH
ENDING UP HOMELESS OR IN PRISON,
CONSERVATIVE PLEA THE ANNUAL
COST OF TAXPAYERS IF CHILDREN
AND YOUTH DO NOT HAVE THIS COST
OF ADVOCACY IS AS MUCH AS 1.5
BILLION A YEAR, SO WE APPRECIATE
THAT. THE FUNDING FOR CASA WAS
INCLUDED IN THE GOVERNOR'S
JANUARY BUDGET. WE URGE THIS
COMMITTEE TO PROTECT THE
PROMISED ALLOCATION. THANK YOU.
THANK YOU. NEXT SPEAKER. HI.
GOOD MORNING. MEMBERS OF THE
COMMITTEE. MY NAME IS TANA
OPPLIGER. I'M A RESIDENT OF
SENATE DISTRICT 37 AND A MEMBER
OF CALIFORNIANS UNITED FOR
RESPONSIBLE BUDGET, WHICH IS A
STATEWIDE COALITION OF OVER 80
ORGANIZATIONS. I OPPOSE THE
HUNDREDS OF MILLIONS OF DOLLARS
IN PROPOSED CUTS AND DELAYS TO
LIFE AFFIRMING AND LIFE SAVING
SERVICES LIKE CAL WORKS, EARLY
EDUCATION AND CLEAN ENERGY, WHEN
BLOATED DEPARTMENTS LIKE CDCR
ARE MAINTAINING THEIR FUNDING,
EVEN AS THE PRISON POPULATION
HAS DECREASED DRASTICALLY, WE
APPLAUD SENATOR WAHAB AND
CALLING FOR A 15% CUT IN BUDGET
TO CDCR, AND WE SUPPORT THE CALL
FOR FIVE PRISON CLOSURES, WHICH
CAN SAVE MORE THAN $1 BILLION
PER YEAR. THIS IS THE CLEAREST
PATH TO ADDRESSING THE BUDGET
DEFICIT. THANK YOU. NEXT
SPEAKER. GOOD MORNING. COMMITTEE
MEMBERS. MY NAME IS DAX PROCTOR.
I'M ALSO A MEMBER OF CURB, THE
EARLY ACTION PROPOSAL PLAN THAT
WE'VE DISCUSSED TODAY CALLS FOR
OVER $300 MILLION IN CUTS TO CAL
WORKS AND 500 MILLION IN CUTS TO
EARLY EDUCATION PROGRAMS. YET
ONLY CALLS FOR ABOUT $80 MILLION
IN CUTS TO THE $19 BILLION
CORRECTIONS BUDGET. THE TOTAL
REDUCTION THÀNH FOR THE ENTIRE
DEPARTMENT OF CORRECTIONS AND
REHABILITATION IS LESS THAN THE
REDUCTION FOR THE FORECLOSURE
INTERVENTION AND HOUSING
PRESERVATION PROGRAM ALONE IN
THE CONTEXT OF OUR CURRENT
FISCAL CRISIS, WE SHOULD BE
PRIORITIZING EDUCATION, SOCIAL
SERVICES, AND OTHER LIFE
AFFIRMING AND LIFE SAVING
SERVICES OVER OUR PRISON SYSTEM.
THE QUESTION WE MUST POSE IS
STRAIGHTFORWARD IN A TIME OF
SIGNIFICANT BUDGETARY
CONSTRAINTS, WHY ARE WE NOT
ALREADY PRIORITIZING MORE
SIGNIFICANT CUTS TO THE
CORRECTIONS BUDGET, PARTICULARLY
WHEN SUCH CUTS COULD YIELD
SIGNIFICANT SAVINGS? REDIRECTING
THESE FUNDS COULD BOLSTER
CRITICAL PUBLIC SERVICES THAT
ARE IN PERIL, LIKE HOUSING,
EDUCATION, HEALTH CARE AND FOOD
ASSISTANCE. THE ARGUMENT FOR
PRISON SPENDING CUTS IS NOT
ABOUT DIMINISHING THE QUALITY OF
CARE OR REHABILITATION EFFORTS
FOR PEOPLE IN PRISONS. RATHER,
IT'S ABOUT ACKNOWLEDGING THE
EXCESSIVE COST BURDENS OF
STAFFING AND MAINTAINING
UNDERUSE AND OFTEN REMOTE
FACILITIES, AS WELL AS
IDENTIFYING MORE CORRECTIONS,
BUDGET INEFFICIENCIES THAT
STRAIN OUR STATE'S FINANCES. A
FREQUENT REBUTTAL IS THAT
REDUCTIONS IN PRISON SPENDING
TAKE YEARS TO REALIZE THAT'S
TRUE. BUT AS SENATOR WAHHAB'S
COMMENTARY TODAY SUGGESTS,
CALIFORNIA BUDGET WOES ARE A
LONG TERME PROBLEM AND WON'T BE
SOLVED BY ONE TIME SPENDING CUTS
THIS YEAR ALONE, OPERATING A
LEANER CORRECTIONS BUDGET IS
SOMETHING BOTH LAWMAKERS AND
ADVOCATES COULD GET BEHIND.
THANK YOU. THANK YOU SO MUCH. IS
THERE ANY ADDITIONAL PUBLIC
COMMENT, SEEING NONE, WE'LL
CLOSE PUBLIC COMMENT AND BRING
THE ITEM BACK TO THE COMMITTEE,
COLLEAGUES, IS THERE. I'LL MOVE
THE BILL. OKAY, MOTION BY
SENATOR WAHAB, TO PASS, AB 106
TO THE SENATE FLOOR. ANY
ADDITIONS, ANY FINAL COMMENT?
ANY ADDITIONAL? OKAY, WITH THAT,
WE HAVE A MOTION, BY SENATOR
WAHAB, AND WE WILL CALL THE ROLL
AB 106. MOTION IS Dð PASS.
SENATORS WIENER. AYE. WIENER
AYE. NILO. NÓ WIENER. NILO. NO!
ALAN BECKER. BECKER. AYE BLAKE.
SPEER. BLAKE. SPEER. AYE. DOLLY
DURAZZO. HI. DURAZZO. AYE
EGGMAN. GROVE. LAIRD MENGIBAR.
MENGIBAR. AYE. MEN. MEN AYE.
NEWMAN. PADILLA. PADILLA AYE.
ROTH. ROTH. AYE. SATO SATO. NO.
SKINNER. SKINNER AYE. SMALLWOOD.
CUEVAS WAHAB. WAHAB. AYE. WILK
WHAT'S THE VOTE? COUNT ICE TEN
NO'S TWO. OKAY. THE CURRENT
TALLY IS, THE TALLY IS 10 TO 2,
AND WE'LL PUT THAT. PUT THE BILL
ON CALL FOR ABSENT MEMBERS, SO I
THINK WE'LL, BRIEFLY RECESS THIS
AS WE WAIT FOR ADDITIONAL
MEMBERS TO COME. AND SO EVERYONE
STAY TUNED
WE'RE GOING TO, BRIEFLY RETURN
FROM RECESS TO OPEN THE ROLL FOR
A FEW ADDITIONAL MEMBERS. AND
THEN WE'LL PUT THE BILL BACK ON
CALL, SO WE ARE BACK IN IN, THE
COMMITTEE IS BACK IN SESSION,
AND, PLEASE CALL THE ABSENT
MEMBERS ON AB 106. SENATORS
ALLEN, DOLLY, EGGMAN, GROVE.
LAIRD I GROVE. I KNOW, LAIRD I
LAIRD I THAT'S A GREAT MISTAKE.
I CAN HARDLY WAIT TO TELL HER.
NEWMAN. SMALLWOOD. CUEVAS I
SMALLWOOD, CUEVAS I WILK. OKAY,
WE'LL PUT THE BELL BACK ON. CALL
AND GO. SOMEONE GOING. OH, GO
AHEAD, GO AHEAD. OKAY, WE'LL PUT
THE BILL BACK ON CALL AND GO
BACK INTO RECESS
OKAY. WE'RE GOING TO COME BACK
FROM RECESS TO, OPEN TO LIFT THE
CALL FOR SOME ADDITIONAL MEMBERS
, PLEASE CALL THE ABSENT MEMBERS
. SENATORS ALLEN, DOLLY. EGGMAN
GROVE. NEWMAN. NEWMAN. I WILK I
WILK I. 14 AND ROTH. ALREADY
VOTED. OKAY, SO, THE VOTE IS 14
TO 2. WE'LL PUT IT BACK ON CALL
AND GO BACK AND RECESS.
YOU GUYS HEADING OUT? OKAY.
COMING BACK FROM RECESS. OKAY
WE'RE GOING TO OPEN THE ROLL.
PLEASE CALL THE ABSENT MEMBERS.
SENATORS ALLEN, I ALLEN, I
DOLLY. DOLLY, NO! EGGMAN! THANK
YOU. GROVE SHE'S LITERALLY
OUTSIDE. SHE OBVIOUSLY ISN'T
COMING. SHE'S OUTSIDE RIGHT
THERE. SHE'S CLOSE THERE. OKAY.
WE'RE. IT'S 15 TO 3. WE'LL PUT
IT BACK ON. CALL.
OKAY. WE'LL COME BACK FROM
RECESS AND WE WILL OPEN THE ROLL
ON AB 106. PLEASE CALL THE
ABSENT MEMBERS. SENATORS. EGGMAN
GROVE. HI. GROVE. AYE. OH YES.
YOU'RE VOTING AYE. THIS IS THE
PRINTED ONE, RIGHT? I'M SORRY. I
HAD ANOTHER COMMITMENT. I
APOLOGIZE.
I'M JUST GOING TO LAY OUT. I
CAN'T DO THAT. I'M SORRY. OKAY
SO. NO. THAT'S FINE. SENATOR
GROVE IS NOT VOTING. GROVE NOT
VOTING. THANK YOU. OKAY.
GREAT. OKAY ON AB 106, THE VOTE
IS 15 TO 3, THE MOTION PASSES.
AND WITH THAT, WE ARE ADJOURNED.
YEAH YEAH. THANK YOU