LAO Issues Report on Legislative Oversight of Governor’s Emergency Spending Authorities

This week, the California Legislative Analyst’s Office (LAO) issued a report providing an overview and recommendations to improve the Legislature’s oversight of the Governor’s emergency spending authorities. The report details the existing authorities available to the Administration in incurring emergency costs in light of the Governor’s proposals for COVID-19 emergency spending and authority.

Namely, the Governor proposes to extend the use of the Disaster Response-Emergency Operations Account (DREOA) for COVID-19 response activities through fiscal year 2021-22. The Governor has additionally proposed budget control section 11.91 that allows the California Department of Finance (DOF) to shift between various departments $1.4 billion in funds proposed in the 2021-22 budget for COVID-19 response activities and spend federal and private funds on pandemic response activities.

The LAO raises a series of concerns with the Governor’s proposals on emergency spending without reasonable legislative checks and balances on the Governor’s COVID-19 spending authority. According to the LAO, concerns with the Governor’s proposal are reflective of larger problems associated with the state’s existing emergency spending authorities that allow the Governor to spend an essentially unlimited amount of funds on emergency-related activities with very little opportunity for legislative oversight.

Given this arrangement, the LAO recommends to the Legislature a series of improvements to ensure additional checks and balances on the Governor’s authority while still allowing for some flexibility in spending funds for emergency response activities. The LAO recommends the Legislature adopts legislation to make fundamental changes to the Governor’s overall emergency spending powers. The Legislature is additionally urged to consider a new budget control section process specific for COVID-19-related augmentations for the upcoming fiscal year, as well as to modify the Governor’s proposed authority to transfer funds budgeted for COVID-19-related activities to require legislative notification. Ultimately, the LAO recommends the Legislature reject the Governor’s proposed flexibility to expend federal and private funds.

The full LAO report is available here.