Weekly Budget Subcommittee Update
Budget Conference Committee Update
Week of February 21-25, 2011 - Last week, the Legislature formed its Budget Conference Committee. The Conference committee will reconcile the minor differences between budget bills passed out of each house.
The committee met last week for three consecutive days starting on Wednesday, February 23, taking public testimony on issues ranging from health care to education. On Thursday, February 24, Governor Jerry Brown testified in committee, the first time a sitting Governor has done so. It was a unique opportunity for committee members to ask questions of the Governor in a public setting, and have the Governor defend his budget requests.
The Budget Conference Committee has released two tables of Committee Action and Major Conference Issues. The committee is continuing to meet this week, starting with a discussion on the Governor's realignment proposal.
Senate Budget Committee Finalizes Budget Review
Week of February 14-18, 2011 - Following the completion of work at the subcommittee level, the full Senate Budget Committee reviewed the proposed state budget. Budget Committee staff has authored the following summary of actions.
The Senate Budget Committee's review will move the budget process towards a conference committee meeting with their counterparts in the Assembly. This includes a budget bill being sent to the Senate floor for a procedural non-concurrence vote.
Following that vote, the Assembly and Senate will form a conference committee. The committee will be comprised of at least six legislators, with the Senate Rules Committee naming three members of the Senate as participants, and Speaker John Perez doing the same for the Assembly. The legislative leaders may opt for more participants however.
Democratic leadership remains hopeful that a bipartisan approved budget - that includes a statewide vote on tax-extensions - is on-track for on-time delivery this summer.
As it stands now, the Senate's budget plan contains $12.5 billion in new cuts, most of which mirror the Governor's proposed budget. The Senate largely preserved the Governor's budget architecture and strategy, sustaining his balanced approach between cuts, taxes, and a "realignment" proposal - the Governor's effort to shift the responsibility for some services currently conducted by the state down to local governments, where they can be implemented with greater flexibility, and tuned to specific local needs, priorities and supplemental funding.
The Budget Committee's actions resulted in the following preliminary scoring (yet to be verified and agreed to by the Department of Finance):
FRIDAY'S SENATE BUDGET COMMITTEE ACTIONS:
- $18.2 total solutions
- $5.8 billion in cuts
- $11.5 billion in revenues (no changes to Governor Brown's proposed revenue figures)
- $915 million in other solutions
OVERALL SENATE BUDGET COMMITTEE ACTIONS (Wednesday (2/16), Thursday (2/17), Friday (2/18), and previous subcommittee actions):
- Governor: $12.8 billion (updated from Jan. 10 budget as a result of sale lease-back change).
- Senate: $12.7 billion (Only $91 million below the Governor's cut level).
- Governor: $12 billion.
- Senate: Same as Governor
- Governor: $2.8 billion (updated from Jan. 10 budget as a result of sale lease-back change).
- Senate: $3 billion (+$151 million above the Governor).
TOTAL: All solutions:
- Governor: $27.6 billion (includes $1 billion reserve).
- Senate: $27.6 billion (includes $1 billion reserve).
Differences in cuts between the Senate's proposal and the Governor's are primarily in the area of health and human services, where the Senate worked hard to take the sharpest edges off cuts to the safety net, while still making deep cuts.
- Developmental services: Total cuts of $527 million vs. $750 million for the Governor. Senate reconfigured the Governor's cuts to reduce impacts on clients and community-based services for the disabled as much as possible. The $527 million cut still represents a major reduction in services.
- IHSS: Same level of cuts as the Governor ($486 million), but reconfigured somewhat to reduce impacts on services for the clients.
- CalWORKs: Total cuts of $1.2 billion vs. $1.5 billion for the Governor. Cuts reconfigured to avoid kicking 300,000 children off the program. Overall, CalWORKs General Fund spending will be 50 percent less than it was last year.
- Health care: Total cuts of $3.6 billion vs. Governor's $3.7 billion. Most proposed cuts adopted, including increased co-payments for recipients, "hard caps" and limits on services and reductions in rates paid to providers. Also adopted the proposal to save $176 million by eliminating an optional Medi-Cal benefit, the adult day health care program. However, the committee maintained some funding to move vulnerable clients to non-profit services and other Medi-Cal programs. The biggest difference from the Governor was to reject a few of the "hard cap" proposals, including proposed caps on physician visits, prescriptions, medical supplies and medical equipment.
Non-HHS Budget Action
- Higher education: Accepted Governor's proposed savings ($1 billion), plus an extra $100 million in savings from limits on CalGrants for private, for-profit colleges, and sweeping additional savings at CSU.
- Corrections: Cuts of about $1 billion, a slightly higher cut level than the Governor's level. Reconfigured proposed cuts to avoid major eliminations of inmate education and rehabilitation programs, while finding additional offsetting cuts.
- Redevelopment: Adopted Governor's proposal to eliminate ($1.7 billion savings).
- Transportation: Same savings level as Governor ($1 billion).
- General Government: About $1.5 billion in cuts, or $400 million more than Governor. Adopted all of the Governor's proposals, plus a few more, including elimination of refundable child care tax credit ($100 millionâ€”not a tax increase, but an expenditure cut), suspension of an energy efficiency program at PUC, and capture of the dollars for the General Fund ($186 million).
Revenue and Other Solutions
- Senate adopted the Governor's revenue package, as proposed - the tax extension dedicated to public safety realignment and education, tax policy changes, tax enforcement measures.
- Other solutions identical to the Governor's proposals, except for an additional $150 million in loans from transportation funds (recommended by LAO).
- Adopted the framework for the Governor's overall realignment package, recognizing that more work is needed and details have to be ironed out.
Senate Budget Committees Wrap up Their Work
Week of February 7-14, 2011 - This week, the Budget subcommittees concluded their work with hearings in every issue area. A total of 32 Senate Budget subcommittee hearings have been held as of February 11th. With each successive week, the members continue to delve in to the complex problems of program funding and working with stakeholders from around the state on solutions.
Next week, the full Senate Budget Committee will begin their hearings on the Governor’s proposed budget. The committee will meet on the following days:
- Tuesday, February 15th, at 9 a.m. in Room 4203
- Wednesday, February 16th, at 1 p.m. in Room 4203
- Thursday, February 17th, at 9 a.m. in Room 4203
Additionally, the Senate Committee on Governance and Finance will holding a hearing on the Governor’s proposal to repeal tax expenditures on Wednesday, February 16th at 9:30 a.m. in room 122.
This past week, Budget Subcommittee 1, on Education, chaired by Senator Carol Liu, met on Monday and Thursday. At Monday’s hearing, the committee discussed K-12 flexibility proposals and changes to special education. Additionally, the members heard from the Administration on the Governor’s proposal to eliminate the Office of the Secretary for Education. This action would save the General Fund $2.3 million over the next two budget years.
On Thursday, the subcommittee heard issues relating to the California Postsecondary Education Commission, Hastings College of Law, and the Student Aid Commission. Subcommittee members looked for ways to enhance the efficacy of taxpayer dollars provided to students through CalGrants. In particular, members discussed the extent to which state Cal Grants should continue to subsidize schools that provide students with substandard educational outcomes.
At the first hearing (Agenda Part A) this week of Budget Subcommittee 2, on Resources, Environmental Protection, Energy and Transportation, chaired by Senator Joe Simitian, requested testimony from the California Transportation Commission, Caltrans, DMV, and CHP. The Governor’s proposed budget contains a reduction of 28 positions and $87 million from the CHP. These positions had been held by employees working on a public safety radio project that is now virtually complete. This issue was held open by the committee members who would like additional information in the spring from the CHP. Additionally, the members rejected a proposal from the administration of a limited-term, three-year, annual increase of $400,000 (State Highway Account) to contract out with a financial consultant to assist in the review of proposed projects under the design build contract method and the public private partnership program. And finally, the committee held open (Agenda Part B) until full budget committee, the proposed Governor’s budget which conforms transportation funding and prior General Fund solutions with the requirements of Proposition 22 and Proposition 26 (2010). The LAO proposed 3 options for funding, however, since all three reduce transportation revenue without any noted additional benefit for transportation programs, the committee decided to hold the issue open until full budget committee could hear the proposal in the context of the entire budget.
Additionally, the committee held a lengthy overview hearing from the LAO on bonded indebtedness. In their discussion on resources issues, they heard testimony on the funding for the Delta Stewardship Council. When the Council was formed, the Legislature anticipated the need for funding from multiple sources including General Fund, federal trust funds, bond funds and reimbursements from other agencies. The Governor’s budget proposes $27.5 million in reimbursements, an increase of $14.7 million or 53 percent. The LAO recommended, and the committee agreed, to reject $5.8 million in reimbursement authority requested in the Governor's January budget that is stated to come from unknown sources and be for "unallocated" purposes.
Budget Subcommittee #3 on Health and Human Services chaired by Senator Mark DeSaulnier, held hearings on both Tuesday and Thursday. There was lengthy conversation regarding cuts of $19 million for services to transitional foster youth. The opponents of the cuts noted that there is an assumption in this proposal that youth served will be caught by AB 12 (foster care expansion), but they assert that is not the case because the traditional housing plus program established through AB 12 will not start until 2012. Even when AB 12 is in place, the placement options for youth to continue care beyond age 18 are limited (the current transitional housing plus program allows youth to be in independent living centers rather than remaining in a foster family home).
Additionally, there was significant testimony against realignment of child welfare services unless certain protections are put in place. Specifically, they are concerned with three factors: first, that adequate funding is sent to the counties to continue services, second, that there is a way to make sure money intended for child welfare services doesn’t get swept into other departments, and finally, assurance that we continue to comply with federal requirements to maintain statewide uniformity in some child welfare services programs. Outcomes for Tuesday can be found here.
On Thursday, the committee heard issues related to the Department of Developmental Services. The Department noted that the biggest hurdles in considering cuts to reach the $750m target will be in maintaining the entitlement, making sure cuts affect operations and administrative overhead more than direct care services (a point which was emphasized by the members of the committee), and ensuring that any cuts that are made to services are made within the parameters of the Individual Program Plans of the regional center clients.
Outcomes for Tuesday can be found here.
Budget Subcommittee #4 on State Administration and General Government, chaired by Senator Michael Rubio held hearings on Monday and Thursday. At the first hearing the agenda was divided in two parts. Agenda Part A covered the California Technology Agency, the Bureau of State Audits, and the California Department of Veterans Affairs. There were a number of veterans and program administrators who testified. As increasing numbers of veterans return from overseas, there are a significant number returning with post-traumatic stress syndrome. The increase is reflected in the requested increase in staffing and the establishment of two new veterans' homes in Fresno and Redding. The committee approved the requested augmentation for these programs. The committee also discussed an increase to budget line items at the Technology Agency as it begins to manage a consolidated e-mail system across state agencies. Outcomes can be found here.
Agenda Part B covered the California Science Center, the Department of Consumer Affairs, Department of Financial Institutions, and the Department of Managed Care. Outcomes for Part B can be found here.
On Thursday, Agenda Part A covered State Administration and State Finance. There was a discussion about the expansion of the Small Business Loan Guarantee program. There is a federal government grant that will allow the state to receive one time funding of $84.4 million. The committee voted to approve this expansion through trailer bill language to allow the disbursement of additional general fund dollars if the fund fall below the five to one match.
The committee had held open its discussions on Williamson Act funding from last week’s agenda. Under the Governor's proposal, the Williamson Act would be funded at $40 million. The Committee voted 3-0 to fund the program at $20 million this year to keep the integrity of the program and send the request to conference committee.
Agenda Part B covered the State Controller’s Office, Department of Fair Employment and Housing, Department of General Services, Bureau of Land Audits, Department of Finance: California Recovery Task Force State Operations Efficiencies. The subcommittee approved an increase of $8 million for Bureau of State Audits to conduct investigative audits for oversight and to weed out inefficiencies in state agencies. Outcomes Part B can be found here.
Budget Subcommittee #5 on Corrections, Public Safety and the Judiciary, chaired by Senator Loni Hancock, met on Thursday. The committee opened the hearing with a discussion of the Department of Corrections and Rehabilitation. The members of the committee approved reductions to CDCR totaling $82.95 million. Additionally, the committee directed the department to continue to work with staff in reviewing this proposal in the spring.
The committee took action to reject the administration’s proposed cut to rehabilitation programs and instead, voted to revert the remaining amount of General Fund dollars allocated in 2011-12 for infrastructure projects in AB 900 – about $73.8 million – to offset this restoration. In combination with the other reductions recommended by the committee, the restoration of this $150 million cut is fully offset and, therefore, will not result in any General Fund increase relative to the Governor’s budget. Tuesday outcomes can be found here.
The Committee on Governance and Finance, chaired by Senator Lois Wolk, held their legislative oversight hearing on Wednesday on restructuring redevelopment. The committee heard testimony from representatives of Department of Finance, the LAO, and the California Budget Project. The committee opened with testimony from Bill Lockyer, California State Treasurer. He began the discussion regarding the future of the program by noting that cities have developed a strategy of luring businesses away from other cities in the state. He noted that it is the duty of the Legislature to determine if this is sound policy for the state to allow to continue. He also noted that often local officials think of the redevelopment as free money. But, due to high interest rates, some cities are financing bonds at between 6.5% and10%, there are cities close to bond default because of declining property values. West Contra Costa County is the most at risk.
Michael Cohen from the Department of Finance testified that it is a question of priorities and funding: services that the state provides versus services that locals provide. Redevelopment cost over $5 billion, of that money approximately $2 billion is the amount that the state backfills to schools. Both Treasurer Lockyer and the LAO believe that the funds freed up with the dissolution of the RDAs should be treated as property tax to avoid any complications in K-14 financing.
Senate Budget Committees Continue to Work through Difficult Budget Issues
Week of January 31-February 4, 2011 - The Senate Budget Subcommittees continue their work, discussing the difficult cuts in programs proposed in the Governor's budget and hearing public comment on each issue. Twenty subcommittee hearings have been completed to date. It is anticipated that this aggressive review schedule will continue for another week and then the work will be taken up by the full Budget Committee.
Next week, the full Budget Subcommittee schedule is as follows:
Monday, February 7
Budget Subcommittee 1 at 2:30 p.m., Room 4203
Budget Subcommittee 4 at 2:30 p.m., Room 112
Tuesday, February 8
Budget Subcommittee 4 at 9:00 a.m., Room 112
Budget Subcommittee 3 at 1:00 p.m., Room 4203
Budget Subcommittee 2 at 1:30 p.m., Room 2040
Budget Subcommittee 5 at 1:30 p.m., Room 3191
Wednesday, February 9
Governance and Finance at 9:30 a.m., Room 112
Thursday, February 10
Budget Subcommittee 2 at 9:30 a.m., Room 2040
Budget Subcommittee 3 at 9:30 a.m., Room 4203
Budget Subcommittee 4 at 9:30 a.m., Room 112
Budget Subcommittee 1 at 10:00 a.m., Room 3191
Budget Subcommittee 5 at 10:00 a.m., Room 113
Below is a summary of the budget subcommittee hearings that took place over the last week (January 31st - February 4th). Links to the agendas and outcomes for the hearings are included, where available.
Budget Subcommittee #1 on Education, chaired by Senator Carol Liu, met on Tuesday to hear two important education issues. First, on Tuesday, Committee members heard testimony from the Chancellor of the Community Colleges for the system-wide budget for the 112 community colleges. The Governor's proposed budget contains a $400 million reduction in the CC budget. According to the Subcommittee staff: “(i)f viewed as headcount, the amount of the reduction could fund 185,720 students. Another way of thinking of the funding is the number of courses that can be offered, and $400 million is sufficient for 27,520 new courses (or 245 classes per CCC campus).” Additionally, the Subcommittee heard testimony on the increase in student fees for Community College students. The Governor's proposal would raise $110 million by increasing fees by $10. Unlike fees at University of California and California State University campuses, the Legislature sets the fees for Community College students. The committee held these issues open.
On Wednesday, the committee members heard from the Department of Education and members of the public on funding for child care. Last year, Governor Schwarzenegger eliminated the funding for stage 3 CalWORKS child care. Since then, the Legislature has sought ways to restore these cuts. At the sub 1 hearing, many people testified about the negative impacts these cuts have had on their lives. A number of mothers indicated that without child care, they have to make a decision between working, going to school, and caring for their children. The committee members also held this issue open.
Budget Subcommittee #2 on Resources, Environmental Protection, Energy and Transportation, chaired by Senator Joe Simitian, held hearings on Tuesday and Thursday. At their first meeting, members heard testimony on the High Speed Rail Authority, the DMV, and the CHP. Specifically, the committee members took steps to resolve the budget's fiscal deficit by adopting a $71.6 million transfer from the Motor Vehicle Account (MVA) to the General Fund. Additionally, they discussed delays at the DMV in issuing new, hi-tech, secure Driver's Licenses and ID cards. DMV agreed to provide a written response within two weeks describing damages they are seeking from the vendor. The Subcommittee indicated they also wanted DMV to return during spring hearings to provide an update on this issueâ€”specifically whether the technical issues are resolved and the backlog of delayed licenses has been eliminated. Finally, the members compelled the High Speed Rail Authority (HSRA) to produce a draft copy of its revised business plan to the Legislature by October 1, 2011, 90 days sooner than the HSRA originally proposed.
At their second meeting, Subcommittee members examined the proposed budgets for Secretary for Natural Resources, Department of Conservation, Department of Fish and Game, and the Department of Parks and Recreation, among others. The Governor's budget includes an 85% decrease from the current year estimated expenditures for the Secretary of Resources. The Governor's budget also includes reduced funding for the Department of Conservation, specifically, a decrease of approximately $37 million. In an action rejected by the committee, the administration requested an appropriation of $145,000, made up of special funds only, for the Division of Oil, Gas, and Geothermal Resources. The committee denied this increased augmentation and asked the department staff to conduct an internal review on this issue and report back to the committee. Finally, the committee also heard the governor's realignment proposal for CalFire. Under this proposal, local governments would take over fire protection services in more highly populated wildland areas. The members decided to hold this item open as discussions continue between all program participants. Outcomes can be found here.
Budget Subcommittee #3 on Health and Human Services, chaired by Senator Mark DeSaulnier, held met on both Tuesday and Thursday. The Subcommittee heard from the Office of AIDS, Department of Public Health, Department of Mental Health: Community Mental Health, State Hospitals and Sexual Offenders. The Governor's budget proposes a $861 million reduction in Prop 63 local assistance to counties for community mental health services. The Subcommittee adopted placeholder trailer bill language to lower the Prop 63 state administration cap from 5 percent to 3.5 percent, and to leave the Oversight Commission harmless from reduction. This is consistent with both the Governor's and the Senate Budget Committee's intent to eliminate administrative overhead before reducing expenditures on direct services. Any funds not used on state administration go to local assistance. Consequently, this reduction will generate approximately $12 million more for counties for mental health services. Outcomes can be found here.
Sub 3's second hearing, on Thursday, began with a lengthy discussion of the budget cuts to the Department of Aging. The committee held open the budget cuts to that Department as well as to the Department of Social Services. Finally, the committee closed with a fully vetted discussion of IHSS. The public testimony was lengthy as real people told their stories about how the proposed cuts would directly impact their lives. During this discussion, a member of the public made a point that resonated with the committee chair. He indicated that the State spends significant funds on hospitals and paying doctors to make people well enough to go home but then aren't committed to ensuring their health and safety once they're back at home. If their conditions worsen, this results in much more costly nursing home expenses for the state. He suggested that we should be looking at all of the money spent on long term care rather than separating out nursing homes from other long-term care optionsâ€”essentially suggesting the need to re-prioritize our spending. The committee voted 2-1 to repeal IHSS recipient fingerprinting and timecard fingerprint requirements and to reject DSS positions requested for these IHSS fingerprinting activities. Outcomes can be found here.
Budget Subcommittee #4, on State Administration and General Government, chaired by Senator Michael Rubio, held hearings on Tuesday and Thursday this week to hear the budgets for the fiscal departments and financing agencies. At the first hearing, members heard testimony from staff at the State Board of Equalization (BOE) and Franchise Tax Board (FTB). The issue of sales tax nexus was discussed with the BOE. Currently purchases of tangible personal property are subject to use tax from any retailer, even if those items are purchased over the internet. Retailers that engage in business in California are required to collect this tax at the time of sale made to a California consumer. This disadvantages brick and mortar businesses in California. The BOE estimates this change in law would generate $100 million. The committee held this item open and will hold future hearings to develop trailer bill language. Tuesday outcomes can be found here. Thursday outcomes can be found here.
At the second hearing, on Thursday, the subcommittee heard a detailed presentation on the Governor's redevelopment realignment proposal. LAO presented their research, reflected in this analysis: Governor's Redevelopment Proposal. In 1945, the California Community Redevelopment Law was enacted. It was expanded in 1951 and 1952 by the voters through a constitutional amendment to allow redevelopment agencies (RDAs) to use property taxes to eliminate blight. Last year 12% of statewide property tax went to redevelopment versus 4% it received in 1983-84. The Department of Finance indicated that even without state assistance, local governments can create oversight agencies to retire bond debt and oversee projects, thus maintaining locally funded RDAs. This proposal will allow counties to decide where money is best spent. DOF estimated that there is approximately $28 to $29 billion in outstanding bond debt statewide and the re-payment amounts are approximately $2 billion per year. County Supervisors, city councilmembers, labor unions, construction, business owners and redevelopment agencies from across the state testified in opposition.
Budget Subcommittee #5 on Corrections, Public Safety and the Judiciary, chaired by Senator Loni Hancock, met twice this week. On Tuesday they heard budgets from the Employment Development Department and Department of Industrial Relations. The committee heard testimony, but took no action, updating the status of negotiations with state bargaining units currently operating without a contract. Tuesday outcomes can be found here.
On Thursday, they heard from the Department of Justice and the Department of Corrections and Rehabilitation. Attorney General Kamala Harris addressed the members of the committee, saying that she accepts the reduction in funds to her office, noting that “there are smarter ways to do the business we do. It will require a shift in culture, but we can do it.” Thursday outcomes can be found here.
The Governance and Finance Committee, chaired by Senator Lois Wolk, continued its work examining the extensive realignment proposal in the Governor's budget. On Wednesday, the committee heard from a panel of experts on this issue. Panelists included: Diane Cummins from the Department of Finance; Marianne O'Malley, Director, General Government for the Legislative Analyst Office; and John Tavaglione, the President of the California State Association of Counties and Supervisor, Riverside County. The Legislative Analyst Office presented a suggested timeline what the next four weeks of budget hearings should cover to meet the March deadline. For more information on the realignment proposal, please see the Senate Majority Caucus' issue update.
Next Wednesday, the committee builds on the work of Budget Subcommittee 4 by beginning its examination of redevelopment programs.
Senate Begins Review of Governor's Budget
Week of January 24-28, 2011 - This week the Senate began an aggressive public review schedule of the Governor’s budget proposal.
Twenty-seven budget hearings have been scheduled as the Senate Budget Subcommittees begin the work of examining and hearing public comment on each Department and Agency budget and specific Budget Change Proposals (BCP) in light of $25 billion in proposed cuts. The Governor is asking the Legislature to approve his budget plan by March 1.
Next week, the Budget Subcommittees will continue their work with 10 additional hearings. The full Budget Subcommittee schedule for the upcoming week is as follows:
Tuesday, February 1
Budget Subcommittee 4 at 9:00 a.m., Room 112
Budget Subcommittee 3 at 1:00 p.m., Room 4203
Budget Subcommittee 1 at 1:30 p.m., Room 3191
Budget Subcommittee 2 at 1:30 p.m., Room 2040
Budget Subcommittee 5 at 1:30 p.m., Room 113
Wednesday, February 2
Budget Subcommittee 1 at noon, Room 3191
Thursday, February 3
Budget Subcommittee 2 at 9:30 a.m., Room 2040
Budget Subcommittee 3 at 9:30 a.m., Room 4203
Budget Subcommittee 4 at 9:30 a.m., Room 112
Budget Subcommittee 5 at 10:00 a.m., Room 113
Below is a summary of activity with links to agendas and outcomes for the budget subcommittee hearings held during the week of January 24 – 28, 2011.
Budget Subcommittee #1 on Education met twice this week, chaired by Senator Carol Liu. The first hearing focused on K-12 Education issues and proposals under Proposition 98. This hearing included the impact of the Redevelopment Agency (RDA) proposal on Proposition 98 Education funding. Under Proposition 98, the voters established a minimum threshold for education funding in California. This funding guarantee from the State is offset by the schools’ share of property tax. Consequently, the diversion of property taxes from schools to redevelopment agencies requires the state General Fund to backfill the schools’ loss of property tax. The Governor proposes to eliminate redevelopment agencies by July 1, 2011. The funds normally diverted to RDAs (about $1.7 billion) can then be used to support schools and local governments.
In its second hearing, the subcommittee reviewed and heard testimony from the University of California and the California State University about the Governor’s proposed reductions to the UC and CSU systems. Representatives from DOF and LAO, UC and CSU officials, student representatives and the public, all testified on this topic. Higher Education officials expressed concern that funding cuts would result in higher student fees, reduced classes, and caps on enrollment. Committee members encouraged UC and CSU officials to more closely examine administrative costs, increase efficiency in campus operations, and other potential cost-saving measures.
Budget Subcommittee #2 on Resources, Environmental Protection, Energy and Transportation, chaired by Senator Joe Simitian, met to discuss the proposed augmentations to budgets for the California Public Utilities Commission, California Energy Commission, California Air Resources Board, Department of Pesticide Regulation, State Water Resources Control Board, Department of Toxic Substances Control and Office of Environmental Health Hazard Assessment.
The examination of the CPUC budget proposal provoked significant discussion. The Governor’s office has requested an increase of four positions and $498,000 ($249,000 Public Utilities Reimbursement Account and $249,000 Federal Trust fund) to improve the safety of natural gas distribution systems in California. The request is in response to the September 9, 2010, pipeline failure in San Bruno. The subcommittee approved this use of special funds.
Budget Subcommittee #3 on Health and Human Services chaired by Senator Mark DeSaulnier, heard proposals by the Department of Health Care Services on Medi-Cal Program funding, MRMIB, Healthy Families and the Emergency Medical Services Authority. The Department of Social Services proposed an increase in staffing and an extension of the contract for the newly developed Child Welfare Services Web system. This system is used to track official investigations in cases of suspected abuse and neglect. This item was held open.
MRMIB requested that EBT (point of sale devices) be made available at 700 farmers’ markets in 2011-12. This item was held open.
The Governor’s budget proposes reductions in CalWORKS and the repeal of reforms enacted in the 2010-11 budget; such as the change in the amount of time a recipient is allowed to be on aid, review of client situations, and sanctions for non-compliance. Welfare reform was a bipartisan effort, the core value being protecting children and keeping them out of poverty. Under the Governor's proposal, 234,000 kids would be dropped completely from aid on July 1. This item, too, was held open.
Budget Subcommittee # 4on State Administration met twice this week, chaired by Senator Michael Rubio. The committee heard testimony from the State Controller, Secretary of State, the Department of Real Estate and the Department of Insurance. Insurance Commissioner Dave Jones addressed how the Department’s BCP would assist in reducing fraud and violation caseload backlogs.
The subcommittee also heard testimony from the Military Department, Department of Fair Employment and Housing, and Department of Housing and Community Development(agenda & outcomes). Specifically, the Committee examined an increase in personnel for homeland security, and for training and support positions. Additionally, the committee heard testimony on the elimination ofthe office of the Inspector General. Members found that the closure of that office is warranted due to the diminishing amount of ARRA funds – funds that the office is tasked with overseeing. The committee also adopted language that would authorize HCD to award housing bond funds in 2011-2012 (protecting construction jobs and affordable housing projects).
Budget Subcommittee #5 on Corrections, Public Safety and the Judiciary, chaired by Senator Loni Hancock, held hearings on a number of public safety issues, and held all items open. The restitution fund for victim’s compensation is nearly insolvent. The victim’s compensation fund is funded through fines, penalties and assessments. Last year, it processed 5,700 claims, which is a significant increase and funding has simply not kept pace. The board is working with local DAs and courts to increase the collection of those funds. This item was held open with a request for more information.
Under another item examined by the committee, the courts charge for recording services for legal cases that last more than one hour, but there was a $50,000 shortfall for services last year. The LAO recommended allowing electronic recording, to charge for services lasting less than an hour and contract out for these services. Judge Maryanne Gillard (Sacramento Superior Court) testified that recorded testimony is often garbled or undistinguishable, voicing her opposition to this recommendation.
The Courts currently use sheriffs for security. The LAO recommended allowing courts to seek court security through competitive bidding and pay the contractor directly for services instead of allocating funds to the Administrative Office of the Courts. This item was held open and stakeholder meetings will continue.