BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  ACA 8
                                                                  Page  1

          Date of Hearing:   May 5, 2011

                            ASSEMBLY COMMITTEE ON BUDGET
                               Bob Blumenfield, Chair
                     ACA 8 (Olsen) - As Amended:  April 14, 2011
           
          SUBJECT  :   State Budget

           SUMMARY  :   Requires that the Governor include in the January 
          budget submission and projection for the following year and that 
          if that projections anticipate a deficit that the Governor's 
          budget include specific revenue or expenditure solutions to 
          balance the budget in the following year.  Specifically,  this 
          bill  :  

          1)Requires, when submitting the budget to the Legislature, that 
            the Governor's budget include a statement of intent for the 
            following year that includes projections of expenditures and 
            revenues;

          2)Requires, that if the estimate for the following year 
            anticipates a deficit, that the Governor's budget include 
            specific revenue and/or expenditure proposals to address that 
            deficit; and,

          3)Makes conforming changes to the wording of existing 
            Constitutional language.

           EXISTING LAW  :  Subdivision (a) of Section 12 of Article IV of 
          the Constitution requires that, when the Governor submits the 
          budget in January, if expenditures are projected to exceed 
          revenues for the fiscal year the Governor must recommend sources 
          for additional revenues and/or spending reductions necessary to 
          balance the budget.

           FISCAL EFFECT  :   None.

           COMMENTS  :   This measure is intended to provide better long-term 
          planning by expanding the requirement that Governor's proposed 
          January budget balance in the fiscal year to include a 
          requirement that the Governor submit a budget that is also 
          balanced in year following the fiscal year.  The measure does 










                                                                  ACA 8
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          not bind the Legislature to adopt solutions beyond the fiscal 
          year.

          This measure mirrors current practice, as the January budget 
          typically includes an assessment of the year following the 
          fiscal year.  The Governor's 2011-12 budget actually includes 
          projects for three years following the fiscal year and 
          articulates a plan to balance for all four future fiscal years.

          The requirements of this measure could have been included in a 
          bill in lieu of a Constitutional Amendment.  Many components of 
          the budget process, such as the requirement for the May 
          Revision, are contained in the Government Code.    

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          Howard Jarvis Taxpayer's Association

           Opposition 
           
          None on file.


           Analysis Prepared by  :    Christian Griffith / BUDGET / (916) 
          319-2099