Assembly Budget Committee Issues Memo Detailing Likely Budget Process Changes

On Monday, Assembly Budget Committee Chair Phil Ting issued a memo detailing likely changes in the state’s budget process in light of COVID-19 and its widespread impacts on the state. In the memo, Assembly Member Ting indicates the state’s revenues are expected to be significantly decreased and the full damage to the state’s economy will not be able to be assessed until at least August.

Upon the Legislature’s return to Sacramento, the budget process, which normally occurs over the course of several months, is expected to be condensed into a few short weeks. Ting discussed likely changes to the state budget process, including:

  • June 15 Baseline Budget: The Governor’s May Revision is expected to become a “workload” budget that reflects 2019-20, or current, service levels. The Budget Committee will no longer be able to consider new priorities or ideas from stakeholders, advocates, or lawmakers with the exception of COVID-19-related costs, wildfire prevention, and homelessness funding. It may be possible that existing state programs will need to be reduced during this time. Subcommittees will be directed to agendize only items that are necessary to build the baseline budget or items providing direct oversight of disaster response and recovery spending.
  • August Revision: Given the delay in personal income tax receipts to July 15, a complete revenue picture is not expected to be available until August. As such, the Budget Committee is expected to revisit the budget after June 15 with a second round of budget deliberations. This second round will allow the Legislature to consider issues that were not able to be addressed in May and June, especially new issues related to the recovery of the COVID-19 pandemic. During this time, the State may need to consider sizable ongoing reductions to major programs. Subcommittees will not likely be able to revisit any proposals for new investments during this time.
  • Deferring 2020 Promises: Prior to COVID-19, the State was expecting an ongoing surplus that offered a chance to expand additional services to Californians. However, this prospect is likely no longer possible this fiscal year, and one or more difficult fiscal years ahead are expected. Despite these challenges, Ting indicated the State’s prudent decisions since the Great Recession will help us avoid any lingering structural budget problems that were experienced by the State prior to 2012.

Relatedly, in remarks to the media on Friday regarding the ongoing COVID-19 pandemic, Assembly Member Ting discussed how California has for years established its rainy day fund; however, Ting indicated the state will need to dip into this fund and reiterated the importance of ensuring “we’re spending the money wisely because that rainy day is looking more like a rainy season, and may stretch even longer.”

The full memo from the Assembly Budget Committee is available here.