BILL ANALYSIS �
ACA 11
Page 1
Date of Hearing: August 22, 2013
ASSEMBLY COMMITTEE ON BUDGET
Skinner, Nancy, Chair
ACA 11 (Gorell) - As Amended: August 5, 2013
SUBJECT : State Budget
SUMMARY : Increases the vote-threshold for some budget related-bills
to a two-thirds vote threshold and makes other changes to the
Legislative and budget process. Specifically, this measure :
1)Specifies that only one bill can be considered the "budget bill."
2)Creates a new category of bill, entitled "a bill that amends the
budget bill." Stipulates that these type of bills.
a) Amend or augment the enacted budget bill.
b) May only be adopted by two-thirds vote.
3)Limits enactment of Trailer Bills or "bills that implement the
budget bill" to within five days of the final passage of the budget
bill.
4)Requires all budget bills to be in print for 72 hours prior to
passage, except in a declared emergency as specified in Article XIII
B of the State Constitution.
5)Specifies that the final action to resolve a Fiscal Emergency called
by the Governor, per the provisions of Proposition 58 of 2004, would
require a two-thirds vote.
6)Prohibits the Legislature for adopting bills during the month of
July during the second year of a two-year session, so that the body
may engage in oversight and programmatic review.
FISCAL EFFECT : Unknown
COMMENTS : This measure is intended to reintroduce the necessity of
supermajority budget votes by limiting the voter-approved power for
the Legislature to adopt a portion of the budget package with a
majority vote to a five day period each year. In addition, it
requires certain bills related to the budget package to be adopted
with a two-thirds supermajority.
ACA 11
Page 2
In recent history, the super-majority vote requirement of the budget
was used for a minority party of the Legislature to leverage policy
concessions, which led to protracted budget fights that emphasized
short-term solutions. The last budget package that was adopted by a
super-majority in 2010 was adopted 100 days into the 2010-11 fiscal
year, and had a structural deficit of over $19 billion. Since the
passage of Proposition 25 in 2010 set the budget vote threshold at a
majority vote, the Legislature has adopted three budgets on-time and
the State is projecting a structural surplus for the first time in
over a decade. Recently, the State's credit rating was increased, in
part because Proposition 25 of 2010 removed the dysfunctional process
that made it difficult for the Legislature to adopt a fiscal plan.
If the provisions of ACA 11 were current in effect, significant
portions of recent budget packages that were adopted with a majority
vote would have instead required a super-majority vote for passage.
This measure would restrict the ability to change the State's existing
fiscal plan by majority vote, which is often necessary to facilitate
the adoption of the budget itself. For example, typically the
Education Trailer bill contains changes to amend the State's budget
for the current year in order to adjust appropriations to conform with
the Proposition 98 guarantee level. Recently, the 2013, Education
Trailer bill amended the 2012-13 budget to appropriate funding for the
Common Core standards (AB 86 Chapter 48 of 2013). (It is important to
note, that the Constitution has always allowed education spending to
be approved by majority vote, so this measure may even go further to
restrict education spending than what existing prior to Prop 25). In
recent years, changing the budget act for the current year was
necessary to facilitate cash management, to change the repayment terms
of special fund loans as in, and to extend liquidation periods for
unspent bond funds. Under the terms of ACA 11, all of these actions
would now require a two-third's vote to adopt. This means that some
of the fundamental assumption on expenditures and accounting that
underpin the budget itself would now be subject to a two-thirds vote
threshold and thus making it harder to craft a budget package that
could be fully adopted by majority vote.
The measure would also make it more difficult to negotiate a final
budget agreement between the Legislature and the Governor by imposing
logistical hurtles that make it difficult to enact a final compromise.
In the two budget packages enacted since Proposition 25 was approved
in 2010, the Legislature has used a bill that amended the budget,
which was unofficially referred to as a "Budget Bill Jr." to
facilitate changes needed to reflect a final budget deal. This
ACA 11
Page 3
mechanism is used because of the logistical difficulty in amending the
budget bill, which was 722 pages long in 2013. In addition to
imposing a higher vote threshold on a "Budget Bill Jr." thus rendering
it less useful for such last minute changes, the process imposes a 72
hour in print rule and a five day limitation to the use of trailer
bills. These overlapping provisions significantly restrict the period
of time that the Legislature can make changes to a majority vote
package while at the same time removing existing tools that are used
to expedite the process. Thus, the entire majority-vote budget
package must be executed precisely to avoid a mine-field of traps
intended to require a two-third's vote to resolve.
The "Budget Bill Jr." mechanism is also used to allow further
discussion on issues related to the budget that required further
development, such as the appropriation of funding for the High Speed
Rail project, contained in SB 1029 (Senate Budget and Fiscal Review),
Chapter 152, Statutes of 2012. This mechanism is useful to all
additional consideration to budget proposals that needed further
fine-tuning after the budget was passed, but would such efforts, as
well as technical clean up bills would require two-third vote for
adoption per this measure. This measure would also restrict the
Governor's ability to use the full twelve days to review the budget
package, as currently provided in the Constitution, because the
Legislature would only have the ability to adopt Trailer Bills with a
majority vote for the five days after the budget was passed.
In addition, the Legislature has traditionally amended the budget act
at the end of the fiscal year to reflect unexpected appropriations in
order to true up the budget to actual expenditures. This Supplemental
Appropriations Bill, also called a "deficiency bill" would also be
subject to a two-thirds vote threshold under the provisions of this
measure. In 2010, the Legislature did not pass a deficiency bill
because it could not muster the two-third vote necessary due to a
political leveraging gambit by the minority party in the Assembly. As
a result the State failed to pay several contractors and vendors for
services provided and these individuals were forced to submit claims
to the Victim's Compensation Board to finally be reimbursed for
services provided. This not only further undermined the State
reputation as a creditor but also created problems with the fund
condition of the Victim Witness Account, which took years to recover.
The provisions of this measure further restrict the ability of the
majority party to resolve a Proposition 58 Special Session by imposing
a two-third vote threshold to the proclamation that ends the session.
Currently, the Legislature can adjourn for the session with a majority
ACA 11
Page 4
vote, so this would impose a higher threshold to effectively adjourn
Fiscal Emergency Special sessions. It seems inconsistent to require a
higher vote threshold to resolve an emergency financial situation than
it would to pass the budget itself.
The provisions requiring the budget bills to be in print for 72 hours
would also severely narrow and hamstring the annual budget process.
The passage of Proposition 25 in November of 2010 sent a clear signal
to the Legislature that the on-time passage of a budget is a top
budget priority for the public; the measure even included financial
penalties for members of the Legislature if the budget was not passed
by the deadline. California's Constitution requires that the
Legislature adopt the budget on or before June 15th of each year,
giving the Legislature slightly more than four weeks from when it
receives the May Revision on May 14th to when it must enact the
budget. This bill would require about ten percent of that time-period
to be set aside for the bills to be in print on the floor at the end
of the process.
How would the Legislature accommodate this loss of time? Because the
current May-June process is already compacted, it is difficult to
envision how the process would accommodate this requirement. Should
the time to analyze and hear the May Revision proposals be shortened
by three days, reducing the chance for the public to participate in
crafting of the budget and requiring members to vote on provisions
with less information? Or should the Senate and the Assembly have
three less days to reconcile their respective budgets into one unified
version of a budget package? Perhaps the drafting process could be
shortened for the trailer bills and the over 800-page budget bill, but
that would further tax the hundreds of staff in Department of Finance,
Legislative Counsel, as well as the Legislature and the Administration
that develop the final budget package, potentially resulting in
significant errors in their work product.
Because the budget process is based on a finite schedule, there is no
room to accommodate this print requirement without undermining the
quality of the process and the budget legislation. Therefore, these
costs should be considered when weighing the merits of this bill.
This measure also includes a provision to set aside the month of July
every two years to conduct oversight. As part of this provision, the
Legislature would not have the power to enact Legislation.
Presumably, this prohibition is to encourage the Legislature to focus
on this oversight effort. However, this also takes away the
Legislature's main leverage to take action.
ACA 11
Page 5
REGISTERED SUPPORT / OPPOSITION :
Support
None on File.
Opposition
None on File.
Analysis Prepared by : Christian Griffith / BUDGET / (916) 319-2099