BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 826|
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CONFERENCE REPORT NO. 1
Bill No: SB 826
Author: Leno (D)
Amended: 6/10/16
Vote: 21
CONFERENCE COMMITTEE: 6-4, 6/10/16
AYES: Senator Leno, Senator Lara, Senator Hancock,
Assemblymember Ting, Assemblymember Bloom, Assemblymember
McCarty
NOES: Senator Nielsen, Senator Bates, Assemblymember Obernolte,
Assemblymember Olsen
SUBJECT: Budget Act of 2016
SOURCE: Author
DIGEST: This bill contains the 2016-17 Budget Act, as it was reported
out by the 2016 Conference Committee on the Budget. This bill
authorizes General Fund expenditures of $122.5 billion and
assumes $125.2 billion in total General Fund resources. Under
the budget act, there would be combined total reserves in the
Budget Stabilization Account and the Special Fund for Economic
Uncertainties of $8.5 billion.
Conference Committee Amendments delete the prior version of this
bill, which expressed legislative intent to enact the Budget Act
of 2016, and instead add the current language.
ANALYSIS: On June 9, 2016, the Budget Conference Committee
completed its work to reconcile the Senate and Assembly versions
of the 2016-17 Budget. The Conference Committee built upon the
extensive framework of both the Senate Budget and Fiscal Review
Committee and the Assembly Budget Committee in establishing the
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Legislature's version of the budget. Working from the general
framework of the Governor's Budget and May Revision, the
Legislature incorporated significant and important budgetary and
policy changes to the state expenditure plan. The Conference
Committee approved various actions on that date that, when
combined with the actions taken in both houses throughout the
budget process, comprise the Legislature's 2016-17 state budget
plan. The budget carefully balances the need for additional
public investment in education, health care, human services and
other state programs, with the necessity of maintaining the
state's fiscal stability through increasing reserves and
continued debt reduction. Overall, this budget is structured
such that it:
1)Continues to fully fund existing programs and commitments.
2)Directs new spending to the most beneficial investments.
3)Increases important investments over a multi-year period.
4)Builds up reserves, pays down debt and retains the state's
fiscal strength.
This budget plan will continue the Legislature's ongoing
commitment to California's residents by strengthening the
state's investments in public programs and services. With this
budget, the Legislature continues its emphasis on rebuilding
state programs and services, which have still not caught up with
the economic recovery. Earlier this year, the Legislature
advocated for, and was successful in realizing, additional
support for developmental disability programs. With this budget
package, the Legislature approves funding that addresses the
homelessness problem, makes important changes to the CalWORKs
program, continues important investments in childcare and higher
education, sets aside funds for affordable housing, while at the
same time retaining a commitment to fiscal stability for the
state. The Legislature's budget adopts the Administration's
revenues estimates for the General Fund and property tax
revenues. It also largely retains the Administration's
aggressive reserve and infrastructure funding policy, but with
additional provisions regarding legislative review.
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Overall Resources, Expenditures and Reserves
The General Fund budget summary for the Legislature budget plan,
compared to the Governor's May Revision, is as follows:
Conference Committee Version
2016-17 Budget
General Fund Summary
(Dollars in Millions)
---------------------------------------------
| | | |
| |2015-16 |2016-17 |
|---------------------------+--------+--------|
|Prior Year Balance | $3,445*| $4,875|
|---------------------------+--------+--------|
| Revenues and Transfers | 117,001| 120,310|
|---------------------------+--------+--------|
|Total Resources Available |$120,446|$125,185|
| | | |
|---------------------------+--------+--------|
| Non-Proposition 98 | 65,849| 71,418|
|Expenditures | | |
|---------------------------+--------+--------|
| Proposition 98 | 49,722| 51,050|
|Expenditures | | |
|---------------------------+--------+--------|
|Total Expenditures |$115,571|$122,468|
| | | |
|---------------------------+--------+--------|
|Fund Balance | $4,875| $2,717|
|---------------------------+--------+--------|
| Reserve for | 966| 966|
|Liquidation of | | |
|Encumbrances | | |
|---------------------------+--------+--------|
| Special Fund for | 3,909| 1,751|
|Economic Uncertainties | | |
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|---------------------------+--------+--------|
|Budget Stabilization | $3,420|$6,714 |
|Account | | |
---------------------------------------------
*After prior year adjustments.
The conference version of the budget includes total General Fund
expenditures of $122.5 billion for 2016-17, an expenditure level
which is about $300 million higher than under the May Revision.
However, the Conference Version also includes shifts and
repurposing of program expenditures, with additional emphasis on
expenditures among programs to address legislative priorities,
as well as increasing spending commitments over a multi-year
period. The budget adopts the Administration's revenue
assumptions for 2016-17 of $120 billion, and its property tax
estimates. The budget provides for increased reserves, similar
to the Governor's plan, and continues to pay down long-term and
budgetary debt. In addition, the Conference Version balances
these with targeted prudent investments in human services,
education, health care, and other areas that will improve the
state's human and social capital.
The Conference Version of the budget provides for $8.5 billion
in general reserves, comprising $1.8 billion in the Special Fund
for Economic Uncertainties plus $6.7 billion in the Budget
Stabilization Account (BSA). This includes a $2.0 billion
discretionary deposit to the BSA.
Principal Budget Components
The Conference Version of the budget includes funding for the
following initiatives and programs:
1)The Senate's "No Place Like Home" initiative, is a
multifaceted initiative to address homelessness and related
issues. The plan includes a grant program funded through
Proposition 63 revenue bonds for supportive housing. As part
of this initiative, the budget includes more outreach to
individuals with disabilities who may qualify for SSI, as well
as additional resources for programs to reduce homelessness
for CalWORKs families and for families that are part of the
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child welfare system. The plan also continues to fulfill the
promise to rebuild the state's social safety net by
reinvesting in CalWORKs through the elimination of the maximum
family grant and by increasing the grant levels for maximum
aid payment.
2)In K-12 education, the Conference version continues to provide
ongoing resources for the Local Control Funding Formula and
one-time discretionary resources. To address the teacher
shortage facing the state, there is additional funding for
teacher recruitment, preparation, and retention. The plan
funds a college readiness block grant, to ensure all students
have the access and support needed to graduate and attend
college.
3)In child care and pre-school, the Conference version includes
a major investment in childcare rate increases and pre-school
slots, together totaling over $500 million when fully
phased-in over four years. These substantial increases are
implemented as minimum wage increases in future years.
4)In higher education, the plan provides additional funds to
enroll more undergraduate and graduate students at the
University of California and the California State University
systems, and incorporates the Senate's "College Readiness"
program to assist low-income students attend and complete
college. In addition, $200 million more in Prop 98 funding is
provided to community colleges to expand access to career
technical education.
5)In housing, the Conference version adopted a tax credit
program that will increase the effectiveness of affordable
housing programs, adds enforcement staff to investigate
housing discrimination complaints and facilitate compliance,
adds a local government grant program that will facilitate the
development of transitional housing for ex-offenders, and sets
aside $400 million for affordable housing if subsequent
legislation is adopted.
6)In health and developmental services, the Conference version
augments programs for healthcare workforce development, limits
estate recovery in the Medi-Cal program, restores acupuncture
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services as a benefit in the Medi-Cal program, provides
funding for health programs such as drug overdose and
hepatitis prevention, and creates a grant program for
children's crisis services. The plan also improves the closure
plans for the state developmental centers and improves
oversight of the transition of developmental center residents
into the community.
7)In human services, the Conference version eliminates the
CalWORKs maximum family grant, increases the SSI/SSP grant,
provides augmentations for the Immigration Services Program
and the Commercially Sexually Exploited Children Program,
provides additional resources for the monitoring of
psychotropic medications for foster youth, as well as makes
investments in senior nutrition programs and the State
Emergency Food Assistance Program, and makes clarifications
regarding the legal protections for immigrant youth.
8)In resources and the environment, the Conference Version
continues oversight of the ongoing drought and statewide
efforts to reduce water consumption. In addition, the Senate
provided oversight of the energy and utility ratepayer funds,
took action to expedite Aliso Canyon mitigation efforts, and
provided funding for pest prevention studies in the Department
of Pesticide Regulation.
9)In public safety and justice, the plan adheres to the
Legislature's emphasis on positive programs to help
individuals avoid the criminal justice system, rehabilitate
incarcerated individuals, and facilitate the transition of
ex-offenders to society through longer term and more effective
programs. Among the priorities is to increase the availability
of transitional housing, mental health and substance abuse
treatment, and services for victims of domestic violence.
The conference version represents a balanced approach, both in
terms of revenues and expenditures, and with respect to savings
and wise reinvestment. It focuses on reducing financial, social,
and environmental costs in the future, while ensuring access to
social services, health care, higher education, and justice
systems. Spending is reasonable, with all new expenditures fully
paid for from other budgetary savings and additional
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analytically-based revenue estimates. Based on revenue estimates
of the Administration, the Conference Version includes critical
and responsible reinvestments and significant reserves. Overall,
the Conference Version is a fiscally responsible approach to
continue rebuilding our public programs.
FISCAL EFFECT: Appropriation: Yes Fiscal
Com.:YesLocal: No
SUPPORT: (Verified6/15/16)
None received
OPPOSITION: (Verified6/15/16)
None received
Prepared by: Mark Ibele / BFR / (916) 651-4103
6/15/16 14:39:14
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