Budget Subcommittee Spotlight: March 2, 2017

Thursday, March 2, 2017

Below is a summary of some subcommittee activity from the past week:

Subcommittee #1 (Education)

Portantino (D-Los Angeles) Chair, Moorlach (R-Costa Mesa), Jackson (D-Santa Barbara)

Career Technical Education Threatened, Teacher Shortage Looms: The subcommittee discussed the governor’s proposed education budget. Senator John Moorlach (R-Costa Mesa) voiced his opposition to the pending $100 million reduction in career technical education funding and noted that the seniority-based teacher layoffs used by most districts could exacerbate the state’s looming teacher shortage by discouraging students from entering the field, as new teachers tend to be the first laid off when the economy weakens. The committee took no action on these issues, consistent with its past practice of deferring most action until after release of the May Revision.

During repeated exchanges with the various panelists, Senator Moorlach also expressed concern about tax revenue volatility and how it impacts education spending and impending deferrals to schools under Proposition 98.

Revenue Volatility and Unfunded Liabilities in Public Higher Education: Understanding that the University of California and California University State systems are in the people business, Senator Moorlach tried to reconcile the increasing size of administration and staff with recent requests for fee increases. He also urged greater attention to addressing the substantial unfunded liabilities in public colleges and universities.

Subcommittee #2 (Resources, Environmental Protection, Energy, and Transportation)

Wieckowski (D-Fremont) Chair, Nielsen (R-Tehama), McGuire (D-Santa Rosa), Mendoza (D-Cerritos)

Governor Proposes to Increase Tax on Commercial Fishing Industry by 1,300 percent: Without justification, the governor proposes to increase taxes on the commercial fishing industry by $12.4 million, or more than 1,300 percent, in order to address just over half of a $20 million deficit for the program fund.

The Department of Fish and Wildlife has not provided any economic analysis to identify the impacts on commercial fisheries. The industry is opposed to this proposal and noted that it was never included in any stakeholder meetings held by the department.

Senator Jim Nielsen (R-Tehama) expressed concern with the department’s lack of cost and revenue information related to the commercial fishing programs and stated that this information is essential to finding any long-term solution to the ongoing deficit. The committee did not vote on the issue but will likely hold a vote at a future hearing.

Subcommittee #3 (Health and Human Services)

Pan (D-Sacramento) Chair, Stone (R-Temecula), Monning (D-Santa Cruz)

Counties Concerned Over IHSS Cost Shift: The governor’s budget proposes to shift $623 million in costs for the In-Home Supportive Services (IHSS) program to counties. Representatives from the counties as well as IHSS worker unions testified in opposition to this cost shift. Senator Jeff Stone (R-Temecula) stated this shift would cause tremendous financial harm to the counties. Senator Stone further suggested that because this program provides personal care services to low-income individuals, the committee should consider either capping the county’s share of costs or phase in the county’s additional share of new costs over several years. The committee did not vote on the issue but will revisit the issue in the spring, after the state’s revenue picture becomes clearer.

Subcommittee #4 (State Administration and General Government)

Roth (D-Riverside) Chair, Wilk (R-Antelope Valley), Glazer (D-Orinda)

Democrats Ignore Opportunity for Tax Rebate: Governor Brown’s budget proposed to use $171 million in available money for general taxes instead of returning these funds to taxpayers. This money is related to economic recovery bonds originally authorized in 2004 that are no longer needed for the original purpose. The law currently allows this extra money to be returned to taxpayers as rebates, but committee Democrats instead supported Governor Brown’s proposal, removing the opportunity to return some portion of highly-taxed California residents’ own money to them. Senator Scott Wilk (R-Antelope Valley) voiced his opposition to this action and voted against the proposal; both Democrats approved it.

Millions for Retirement Program Potentially Not Needed: The subcommittee discussed a proposed $150 million loan to launch California’s so-called “Secure Choice” Retirement Program, authorized last year. Potential federal government rule changes may reverse the state’s legal ability to launch this new program. If that happens, California would be unable to move forward with enrollment in the new program, which would eliminate the need for the $150 million loan. Given the uncertainty surrounding Secure Choice, the subcommittee decided to hold off on approving the loan pending action on the federal rules in the near future.

Subcommittee #5 (Corrections, Public Safety, and the Judiciary)

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

Lack of Funds Threatens Core Trial Court Services: The subcommittee discussed (but did not vote on) a number of issues affecting the trial courts, including the impact of two 2016 voter initiatives on court budgets. Proposition 63 required the courts to implement a procedure to confiscate firearms from an offender at the time of conviction when that conviction precludes the offender from legally owning a firearm. Proposition 64 states it is legal to use marijuana for recreational use and made individuals previously convicted of marijuana crimes eligible for resentencing. Despite the new workload, which the Judicial Council estimates will cost about $16.5 million per year, neither the initiatives nor the governor’s budget include increased trial court funding for this purpose. As courts continue their struggle to manage operations within budgeted resources, it appears likely that further reductions in court services may result. Senate Republicans believe the state must keep its promise to people with the greatest needs by ensuring access to justice through the courts. This can only happen when courts receive adequate funding.

You can view the agendas for next week’s budget subcommittees HERE.