Facing Monday Deadline, Legislature Continues Budget Negotiations with Administration

The California State Legislature faces a Monday constitutional deadline to pass a state budget for FY 2020-21. Although negotiations continue between legislative leaders and the Newsom Administration, the Legislature’s budget bills, SB 74 and SB 808, are in print and is expected to be taken up for a final vote on Monday, June 15. The two measures are largely seen as “placeholder” measures, allowing legislators to meet the constitutional deadline and continue negotiations with the Newsom Administration.

On Wednesday, Senate President pro Tempore Toni Atkins and Assembly Speaker Anthony Rendon released a statement on the budget, indicating, “In order to meet the Constitutional deadline for passing the budget by June 15 and to comply with the 72-hour in-print rule, we must pass the updated Legislative version of the budget while our productive negotiations continue with the Governor. We will approve any amendments to the Legislature’s version of the budget as soon as they are eligible for floor action.”

Detailed provisions of the budget are implemented through budget trailer bills (TBLs); these measures typically follow the main budget measure and represent finalized negotiations between the Legislature and the Administration. As such, negotiations on key budget provisions, are expected to continue through the weekend and additional TBLs are anticipated.

The Senate Budget & Fiscal Review Committee this morning convened a hearing to examine TBLs on 2019 augmentations, education finance, and revenues. The committee also received a presentation from the Legislative Analyst’s Office (LAO) on the differences between the Senate’s version of the budget and the finalized legislative budget agreement. Legislative Analyst Gabe Petek walked members through the primary differences between the two versions of the budget, including an additional $400 million in Realignment backfill, an additional $100 million in homelessness funds, and additional educational funds. Mr. Petek also indicated the final legislative budget package does not include provisions from the Senate’s budget around the managed care organization (MCO) tax and differs in the Administration’s proposed COVID-19 contingency fund.

Committee members had the opportunity to comment on the legislative budget package and raise questions of the LAO and Department of Finance (DOF). Notably, during the hearing, Senator Richard Pan expressed support for the Legislative proposal to provide county realignment backfill to maintain critical local services, including public health services, during the ongoing public health crisis. Further, Senator Pan expressed support and gratitude for local and state public employees in responding to the COVID-19 pandemic, particularly those who have been reassigned to assist in contact tracing activities statewide.

Today’s Senate Budget & Fiscal Review Committee concluded with the advancement of the three trailer bills that are expected to be taken up by the Assembly Budget Committee on Monday. A video recording of today’s Senate Budget & Fiscal Review Committee hearing is available here.

With negotiations between legislative leaders and the Newsom Administration continuing over the coming days, CHEAC will continue to update members of relevant budget actions as information becomes available.