Budget Subcommittee Spotlight: March 28, 2019

Thursday, March 28, 2019

Subcommittee #1 (Education)

Roth (D-Riverside) Chair, Morrell (R-Rancho Cucamonga), & Leyva (D-Chino)

State Should Provide Accountability, Not Handouts, to Troubled School Districts.  The subcommittee heard testimony regarding the financial status of California’s local school districts, including an update on two financially troubled districts that received special treatment in 2018 legislation. Historically, when a school district became financially unstable, the state provided loans and fiscal oversight.  However, a late-session bill in 2018, Assembly Bill 1840 (Committee on Budget), promised to make grants, rather than loans, to the Oakland and Inglewood districts.  Senate Republicans are concerned that giving grants, which do not need repayment, to local districts creates taxpayer-funded bailouts for local agencies that may not have acted responsibly.  Some other school districts, including Sacramento Unified, are currently struggling to remain financially balanced, and it would be a greater concern if some districts receive favorable treatment based on political connections, rather than undergo the same requirements and accountability other school districts must face.

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

Wieckowski (D-Fremont) Chair, Jones (R-Santee), McGuire (D-Santa Rosa), Monning (D-Santa Cruz), Stern (D-Canoga Park)

Oversight of Wildfire Prevention and Recovery Efforts.  The subcommittee discussed state efforts to prevent and recover from wildfires, including $165 million from Cap & Trade funds for forestry and $9 million annually for the California Public Utilities Commission (CPUC) to increase oversight of state-regulated utility companies.  Senate Bill 901 (Dodd, 2018) requires the CPUC to review and approve utilities’ annual Wildfire Mitigation Plans and conduct compliance reviews.  The CPUC is also required to determine whether costs incurred by utilities related to catastrophic wildfires are “just and reasonable” and review utility conduct before allowing utilities to pass those costs on to customers.  Senate Republicans believe using Cap & Trade funds for wildfire prevention is an appropriate use of those funds, and applaud efforts to increase public safety and decrease wildfire recovery times.  The subcommittee held these items open for votes at a future hearing.


Subcommittee #3 (Health and Human Services)

Pan (D-Sacramento) Chair, Stone (R-Riverside County), & Hurtado (D-Sanger)

Holding the Child Support Services Department Accountable.  California’s child support delivery system ranks last in the nation for cost-effectiveness, and the subcommittee discussed the Department of Child Support Services’ plans for improvement. Senator Jeff Stone (R-Riverside County) began the discussion by inquiring, “What recommendations does the Department have to streamline operational efficiencies and improve the cost effectiveness of the program?” Even though the department is required by law to issue these recommendations by July 1, 2019, the Department did not share all of them in its response, but instead asked for a $60 million budget increase to cover casework costs. Senator Stone voiced his concern and recommended withholding action on the budget request, “Before the Legislature spends $60 million more on this program it should look at any and all ways to streamline operational expenses.” The item was held open for discussion at a later hearing.

Subcommittee #4 (State Administration and General Government)

Durazo (D-Los Angeles) Chair, Nielsen (R-Tehama), & Umberg (D-Santa Ana)

Legislative Oversight of Budget Proposals. An alarming trend has been for the Administration to propose major policy changes very late in the budget process, thus leaving the Legislature insufficient time for thorough review.  To provide more transparency, Senator Jim Nielsen (R-Tehama) called for specific details from the Administration regarding his Paid Family Leave proposal. The Governor previously proposed to lengthen the paid leave from six weeks to six months, but details of the current proposal are still unavailable.  In Thursday’s hearing, the Department of Finance indicated that they expect to propose a “down payment” on the policy idea as well as convene a task force to study future financing options for the expansion. It was unclear, however, whether this “down payment” would fund the task force, an incremental extension of leave time, an increase in the wage replacement rate, or necessary IT changes to implement the full expansion. This proposal was not voted on as more information would be made available in the May Revision.

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

Skinner (D-Berkeley) Chair, Moorlach (R-Costa Mesa), & Beall (D-San Jose)

Human Trafficking Victim Services Program Made Permanent.  Last year, with one-time funds for services to victims of human trafficking set to expire on June 30, Senate Republicans fought to continue the funding in the Budget Act of 2018.  Legislative Democrats rejected the funding in the main budget bill, but thanks to continued pressure from Senate Republicans, the funds were eventually added back on a one-time basis.  Last Thursday, the subcommittee voted unanimously to approve the Governor’s proposal to make the funding permanent.

Proposal to Fund Pre-Positioning of Fire and Rescue Resources Raises Question About Effectiveness.  The subcommittee discussed, but did not vote on, a proposal to provide $25 million General Fund annually for the Office of Emergency Services (OES) to fill local requests for pre-positioning of state mutual aid resources in advance of impending disasters like wildfires and floods.  This relatively new strategy involves analyzing data on local fuel conditions and weather forecasts to predict when and where these types of disasters are most likely to occur.  Resources are then mobilized in advance of weather events to provide quicker, more effective response. Senator John Moorlach (R-Costa Mesa) asked the Chief of OES’ Fire and Rescue Branch how effective pre-positioning efforts have been so far.  While the Chief gave some anecdotal evidence of success, it was clear that a comprehensive analysis has not been done to date.  As the proposal moves through the budget process, Californians should expect the Governor’s administration to examine the results of this program and make appropriate adjustments to ensure that taxpayers do not pay for a program that sounds good but may not provide actual improvements to public safety.

You can view the agendas for the following week’s budget subcommittee hearings here.