Senate Budget and Fiscal Review Committee Convenes First Hearing of Year

Yesterday, the Senate Budget and Fiscal Review Committee convened a hearing to provide an overview of the Governor’s proposed 2018-19 Budget. Senator Holly Mitchell, chair of the Committee, remarked on how she was encouraged to see continued investments in critical public services, such as early childhood education, K-12 and higher education, Medi-Cal (via provider rates) and courts, among others. She also suggested more could be done to serve Californians as vital public services, including health care, the social safety net and flood infrastructure, remain underfunded.

The Senate Budget and Fiscal Review Committee kicked off with an overview of the Governor’s budget proposal provided by Amy Costa from the Department of Finance. Mac Taylor, from the Legislative Analyst’s Office followed by drawing attention to particular areas within the Governor’s proposed budget that Legislature could act differently, similar to those laid out in the LAO’s Budget Overview released earlier in the week. Areas highlighted include setting their own targeted level of reserves and exploring the Administration’s Proposition 55 allocation methodology. He also noted that lawmakers would need to carefully consider how to handle surplus revenues as formulas adopted in Prop. 98, Prop. 2, and Prop 55 add another layer of complexity.

During the course of the hearing, Senator Pan stressed the need to focus on investments that help to decrease future costs and urged the Department of Finance to score cost savings versus only showing the cost of investments. He highlighted the need to invest in public health readiness and mentioned flu season and the wildfires and floods. He later urged the Legislature to consider these investments during good budget times given that when the state is in a recession, policy makers are less likely to do so. The LAO characterized costs as certain, they are right away and returns come much later; he further noted that this is a hurdle we must get over.

Senator Mitchell noted upcoming budget activities, consisting of full committee oversight hearings beginning in February and deeper dives into proposals and issues beginning in the spring. Budget subcommittee hearings will begin in March.