BILL ANALYSIS                                                                                                                                                                                                    






                  SENATE COMMITTEE ON BUDGET AND FISCAL REVIEW
                          Denise Moreno Ducheny, Chair
          
          Bill No:       SB 1426
          Author:        DeSaulnier
          As Amended:    February 19, 2010
          Consultant:    Keely Martin Bosler
          Fiscal:        Yes
          Hearing Date:  April 12, 2010
          
           Subject  :  State budget: 2-year spending plan.

           Summary:   This bill proposes a two-year budget process  
          starting in 2011-12.

           Background:  
           
          State Budget Process Overview.  Under the current State  
          Constitution the Legislature has the power to appropriate  
          State funds and make midyear adjustments to those  
          appropriations.  The annual State budget act is the  
          Legislature's primary method of authorizing expenses for a  
          particular fiscal year.  Also, under the current State  
          Constitution the Governor is required to propose a balanced  
          budget by January 10 for the next fiscal year (beginning  
          July 1) and the Legislature is required to pass the annual  
          budget act by June 15.  Under current law the Governor may  
          also reduce or eliminate specific appropriation items using  
          his or her "line-item veto" power and the Legislature may  
          override a veto with a two-thirds vote in each house.   
          However, once the budget has been approved by the  
          Legislature and the Governor, current law provides the  
          Governor with limited authority to reduce spending during  
          the year without legislative approval.

           Proposed Law:    
           
          This bill requires that the budget plan submitted by the  
          Governor in every odd year to include a budget plan for the  
          succeeding year as well.  This bill would require this  
          two-year budget proposal to commence in the 2011-12 fiscal  
          year.  The Governor shall propose modifications to the  
          two-year budget plan in the second year of the two-year  
          cycle.
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           Fiscal Effect:  
           
          The direct fiscal effects of this bill are likely to be  
          minimal.  The indirect effects of this bill are unknown and  
          depend on future actions by the Legislature.

           Source  :  Author
          
           Support  :  None on file.

           Opposed  :  None on file.

           Comments  :  
          
            1.     Planning May Improve.  This bill may result in  
                 improved planning to the extent that the Governor's  
                 plan must take into account large expenditure  
                 increases or revenue reductions in year two of the  
                 two-year cycle.  However, the state currently has  
                 limited abilities to forecast caseload, expenditures  
                 and revenues accurately beyond the fiscal year.   
                 This would most likely make the second year of the  
                 two-year cycle inaccurate and require significant  
                 revisions.  


















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