BILL ANALYSIS �
AB 21
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Date of Hearing: May 5, 2011
ASSEMBLY COMMITTEE ON BUDGET
Bob Blumenfield, Chair
AB 21 (Nestande) - As Introduced: December 6, 2010
SUBJECT : State budget and key liabilities.
SUMMARY : Prohibits the Governor from including in the budget
proposal estimates of revenues that would be generated from laws
not then in effect. The bill would require that the Governor
present a report to the Legislature listing the state's key
liabilities, and as part of the budget, provide data regarding
revenues that would be required to retire key liabilities.
Specifically, this bill :
1)Prohibits including revenues estimated to be from laws,
programs or executive actions not in effect at the time the
budget is submitted to the Legislature;
2)Requires that the budget include percentages and amounts of
General Fund revenues that must be set aside and applied
toward retiring key liabilities; and,
3)Directs that the Governor submit to the Legislature a report
providing information on balance and repayment of loans;
requirements related to deferred or suspended expenditures or
fund transfers; other liabilities related to debt, retirement
and infrastructure affecting the state financial health.
EXISTING LAW : Requires a budget plan with proposed
expenditures and estimated revenues to be submitted by the
Governor to the Legislature. Prohibits the Legislature from
sending a Budget Bill to the Governor that would appropriate
from the General Fund amounts in excess of General Fund revenues
and prevents the Governor from signing such a bill.
FISCAL EFFECT : Minor administrative costs associated with
compiling information and preparing the additional report.
COMMENTS : The bill would not appear to require the preparation
of any new data or analysis but simply require that existing
information on the state's "key' liabilities" be presented
together in the form of a report submitted along with the
budget.
AB 21
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The bill would preclude revenues estimated for purposes of the
budget from including any revenues generated from laws,
programs, or revenues that were not in effect or effectuated at
the time the budget is submitted. This would limit policy
flexibility, in that the budget submitted to the Legislature in
January could not include, for example, the proceeds of the sale
of any assets that were to conclude in the period after the
budget submission but prior to the budget year. Perhaps more
significantly, the Governor would be prohibited from submitting
a budget that relied in part on new proposed tax revenues (or
the continuation of existing temporary tax revenues) that under
current law were not in effect (or slated to expire slated to
expire prior to the budget year).
The bill would add to the existing asymmetry with respect to
revenues and expenditures, in that estimated revenues could not
include any proposed policy changes that would result in
increased revenues, whereas a similar restriction would not
apply to expected expenditure reductions.
REGISTERED SUPPORT / OPPOSITION :
Support
The Greater Corona Valley Chamber of Commerce
Greater Riverside Chambers of Commerce
Southwest California Legislative Council
Inland Empire Economic Partnership
Indio Chamber of Commerce
Desert Contractors' Association
Opposition
None on file.
Analysis Prepared by : Mark Ibele / BUDGET / (916) 319-2099