BILL ANALYSIS
ACA 19
Page 1
Date of Hearing: May 20, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
ACA 19 (Blakeslee) - As Introduced: March 26, 2009
Policy Committee:
AppropriationsVote:
Urgency: No State Mandated Local
Program:Reimbursable:
SUMMARY
SUMMARY
This ACA provides that in any year that a state budget has not
been enacted by July 1, funds shall be appropriated for the
support of "essential state functions," as determined by the
Department of Finance (DOF), in amounts equal to the amounts
appropriated for these functions in the preceding fiscal year.
If DOF estimates, however, that revenues for the new fiscal year
will be less than revenues from the preceding fiscal year, the
amounts appropriated under this ACA shall be uniformly reduced
by a percentage equal to the estimated decline in revenues for
the relevant funds.
DOF shall identify essential state functions as those necessary
to mitigate the following:
a) Imposition of significant sanctions against the state.
b) A negative impact to physical infrastructure.
c) Environmental damage to the state.
ACA 19
Page 2
d) A negative impact on public safety
e) A negative impact to the economic interests of the
state.
FISCAL EFFECT
1)GF appropriation, potentially in the range of $7 billion per
month, and SF appropriations potentially in the range of $2
billion per month.
2)Potential reduction in cash management options to the extent
that budget appropriations continue to flow.
3)Potential loss of budget solutions to the extent this ACA
results in a shorter period of time in which to make program
reductions following passage of a budget.
4)Potential GF and SF savings to the extent this ACA prevents
the need for interest payments, avoids inflationary increases
in materials related to capital projects, and prevents
negative impacts on public programs.
5)One-time GF costs of about $220,000 to place this ACA on the
statewide ballot. The Secretary of State estimates ballot
costs at about $55,000 per page.
COMMENTS
1)Rationale. The author contends this ACA will protect the state
in the event of significantly delayed budgets.
According to the author, "In the absence of an approved Budget
Bill, the State of California does not disburse sufficient
ACA 19
Page 3
funds for day care centers, nursing homes, health clinics, or
other entities that provide essential contract services for
the state. Currently, payments that are mandated by federal
and state laws, and relevant court rulings are disbursed, but
they do not adequately provide for the state to meet its
obligation in protecting the people and resources of the state
of California. The disruption caused by the absence of a
budget bill results in significant harm to the health, safety
and welfare of the people of the state."
2)Concerns.
a) Loss of Fundamental Legislative Appropriation Authority .
The unspecified appropriation level essentially strips
appropriation authority from the Legislature and provides
DOF complete appropriation authority for determining
essential functions.
It is unclear for what periods of time appropriations would
be required . The ACA specifies that the DOF appropriation
authority would last until the enactment of the budget
bill; would appropriations be open-ended?
b) To what extent does a virtual statewide continuous
budget appropriation reduce the incentive for a budget
agreement ? This ACA could result in a de facto budget with
no legislative participation.
3)Prior legislation includes SB 1456 (Denham, 2008), which
required an unspecified appropriation to the State Controller,
for allocation by the Director of Finance to pay the urgent
expenses of state government, if the Budget is not enacted by
July 1. SB 1456 failed passage in the Senate Budget Committee.
Analysis Prepared by : Geoff Long / APPR. / (916) 319-2081