Budget Subcommittee SPOTLIGHT: April 15, 2016

Monday, April 18, 2016

Subcommittee #1 (Education)

Block (D-San Diego) Chair, Moorlach (R-Costa Mesa), & Allen (D-Santa Monica)

and

Subcommittee #3 (Health & Human Services)

Mitchell (D-Los Angeles) Chair, Monning (D-Carmel), & Stone (R-Temecula)

Child Care Funding Used for Union Wages Instead.  A surprisingly low nine percent of parents enrolled in the state’s CalWORKS cash assistance program receive child care, according to information presented at a joint hearing on child care and early education. The benefit known as “Stage 1” child care is an entitlement for CalWORKs recipients that arguably need these services in order to work and go to school. A significant cause of the apparent under-utilization of child care services is that county welfare departments have overspent their budgets for administrative costs nine out of the last ten years, while at the same time under-spending their child care budgets. This means that $63 million dollars that could support needy families in the most recent completed year has been shifted to county staff instead, potentially depriving families of needed services.  Senate Republicans believe a state fiscal priority should be to keep promises to vulnerable families, and shifting funds from child care to administration falls short of that promise.

Subcommittee #2 (Resources, Energy, Agriculture & Transportation)

Wolk (D-Davis) Chair, Nielsen (R-Gerber), & Pavley (D- Agoura Hills)

Vehicle License Fee Increase.  The subcommittee discussed the governor’s proposal to increase vehicle registration fees by $10 next year, a hike of over 14 percent, and to allow the fee to grow automatically after that by indexing it to inflation. California’s vehicle license fee is currently $70 annually and funds the Department of Motor Vehicles (DMV), the California Highway Patrol (CHP), and the Air Resources Board (CARB). According to the governor’s representatives, the fee increase is needed because costs far outpace revenues. However, a closer look reveals that nearly $500 million in revenues for these programs have been ripped off by the General Fund in recent years. Despite the need to fund the core services of the DMV and CHP, the governor proposes to continue to divert nearly $80 million annually for other uses while asking motorists to pony up more money at the same time. This $10 fee increase is in addition to the governor’s proposal to increase registration fees by $65 annually to fund road maintenance. These fee and tax increases, when combined with the governor’s other proposals, will raise costs for a two-car family by at least $250 a year.

Trolley Before the Train.  The subcommittee discussed the governor’s proposal to allocate an additional $400 million to local mass transit grants from Cap and Trade auction revenues. This appears to be another way for the governor to disguise money for his high-speed rail boondoggle. Although the High-Speed Rail Authority (Authority) already receives 25 percent of Cap and Trade revenues, the Authority plans to tap this pot of money again for so-called “connectivity” projects that would link high-speed rail to local systems. Many uncertainties surrounding the construction of high-speed rail remain, including a $40 billion dollar funding gap and no sign of private investment.  Senator Nielsen (R-Gerber) pointed out that this proposal “puts the trolley before the train.” If high-speed rail is not built as envisioned and never reaches these communities, the state will have wasted hundreds of millions of dollars on projects that connect to nowhere.

Subcommittee #4 (Housing, Veterans Affairs, & General Government)

Roth (D-Riverside) Chair, Nguyen (R-Garden Grove), & Pan (D-Sacramento)

Unprecedented Election Workload in 2016.  In a joint informational hearing with the Elections and Constitutional Amendments Committee, the subcommittee evaluated Secretary of State Alex Padilla’s request for about $31 million, including $19 million to help counties fund the cost of verifying voter signatures on initiatives, and another $12 million to print and mail an unusually large voter information guide. The primary reasons for increased costs include a two- to three-fold increase in voter registration activity and the likelihood that 21 initiative measures may be included in the voter information guide.

Republicans call for funding voter integrity efforts: During the hearing, Senator Janet Nguyen (R-Garden Grove) commended Secretary of State Padilla for encouraging greater voter participation, but she raised concerns that the state has not consistently funded voter integrity election mandates, including verification that absentee and provisional ballots are turned in by the actual voter which could deter voter fraud. According to Senator Nguyen, “Without this uniformity, voters in the Los Angeles portion of my district may have to meet different standards than voters in the Orange County part of my district.” Senate Republicans continue to support reimbursing counties for the $77 million in past costs associated with suspended election mandates. If the state would pay these costs, the funds would help counties cover the costs of this year’s primary and general elections as well.  Secretary Padilla said that he would help Republicans advocate for funding in this year’s budget. 

Subcommittee #5 (Revenue, Labor, PERS, STRS, Public Safety, & Judiciary)

Hancock (D-Berkeley) Chair, Anderson (R-San Diego), Beall (D-San Jose)

This subcommittee did not hold a hearing this week.