Senate Budget Committee Reviews Latest COVID-19 Spending

On Saturday, the Senate Budget and Fiscal Review Committee convened a hearing to examine the state’s COVID-19 response spending. The first component of the hearing featured representatives from the Legislative Analyst’s Office (LAO) and the Department of Finance (DOF) to provide an update on COVID-19 expenditures to date, the level of funding included in the FY 2020-21 state budget, and the mechanics of how funding is accessed and how spending decisions are made.

The LAO provided Senators an overview of COVID-19 spending by the state, consisting of $5.7 billion in allocated and planned spending. The LAO detailed the sources of funds that have been made available to the Newsom Administration to respond to the COVID-19 pandemic, expected uses of the funds, uncertainties associated with funding and expenditures, and legislative oversight opportunities. Notably, as the LAO indicated, the Newsom Administration has significant flexibility to determine how to allocate and spend COVID-19 funds. However, the LAO determined that the Legislature often lacks adequate information from the Newsom Administration and additional information is needed to practice legislative oversight of the funds made available to respond to COVID-19. The LAO recommended a series of potential options to improve oversight of COVID-19 funds, including legislative member briefings, written notification, and monthly or quarterly expenditure reports.

DOF representatives further discussed the Administration’s spending and transparency efforts. The DOF issued an August Fiscal Update just prior to the hearing, detailing expenditure assumptions and estimates as compared to the 2020 Budget Act estimates. Notably, the Administration estimates its COVID-19 response expenditures are tracking $1.2 billion lower than previously estimated primarily due to lower than anticipated supply procurement costs and decreasing medical surge cost assumptions.

During the question and answer component of the hearing, Senators inquired about a series of issues, including the Administration’s COVID-19 surge projections, the perceived lack of information sharing on COVID-19 spending with the Legislature, PPE procurement, workplace protections against COVID-19, activities to protect vulnerable populations, food bank support, and funding sources available to the Newsom Administration. Notably, Senator Richard Pan raised concerns around the lack of adequate funding provided for public health, including for testing and contact tracing activities, pressing Newsom Administration officials for more details around how funds were allocated.     

In closing the COVID-19 spending component of the hearing, Senate Budget and Fiscal Review Committee Chair Senator Holly Mitchell reiterated the Legislature’s requests for transparent, frequent, and regular communication with the Newsom Administration on pandemic-related expenditures.

A hearing agenda is available here. A video recording of the hearing is available here.