BILL ANALYSIS �
------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 121|
|Office of Senate Floor Analyses | |
|1020 N Street, Suite 524 | |
|(916) 445-6614 Fax: (916) | |
|327-4478 | |
------------------------------------------------------------
THIRD READING
Bill No: AB 121
Author: Assembly Budget Committee
Amended: 6/28/11 in Senate
Vote: 21
PRIOR VOTES NOT RELEVANT
SUBJECT : Budget Act of 2011: Revenue trigger
SOURCE : Author
DIGEST : This bill provides for expenditure reductions of
up to
$2.5 billion if revenue falls by $1 billion, or more, below
expectations in 2011-12. General Fund revenues in 2011-12
are anticipated to be $88.5 billion. If revenues are
forecast in December 2011 to be lower by $1 billion to $2
billion, expenditure cuts of $600 million are triggered on.
If revenues are forecast in December 2011 to be lower by
more than $2 billion, then additional expenditure cuts of
$1.9 billion are triggered on.
Senate Floor Amendments of 6/28/11 delete the prior version
of the bill expressing the intent of the Legislature to
enact statutory changes relating to the 2011 Budget Act and
place language concerning expenditure reductions based on a
revenue trigger.
ANALYSIS : Specifics of AB 121:
CONTINUED
AB 121
Page
2
1. Requires the Department of Finance (DOF) to provide
notification to the Joint Legislative Budget Committee
by December 15, 2011, with an updated revenue forecast
for 2011-12 that is based on the higher of (1) the
November 2011 Legislative Analyst's revenue forecast, or
(2) the DOF's December 2011 revenue forecast.
2. If the December 15, 2011, updated forecast of revenues
predicts revenues less than $87.5 billion, the following
additional reductions, which total about $600 million,
shall occur up to the amount specified:
A. $100 million to the University of California.
B. $100 million to the California State Universities.
C. $100 million to the Department of Developmental
Services.
D. $23 million to the California Department of
Education related to childcare funding (across the
board reduction).
E. $16 million to the California State Library
related to library grants.
F. $20 million to the Department of Corrections and
Rehabilitation.
G. $15 million to the California Emergency
Management Agency related to local assistance grants.
H. $10 million to the Department of Social Services
related to anti-fraud grants.
I. $30 million to the California Community Colleges
related to a $10 fee increase.
Related legislation in the budget package would include
the statutory provisions to implement these reductions
and to make other reductions that bring the total in
this first trigger to $600 million. The additional
trigger reductions in associated trailer bill include: a
$100 million reduction to In-Home Supportive Services in
CONTINUED
AB 121
Page
3
across-the-board hours, a $15 million reduction to
Managed Care from extending March 2011 cuts to all
plans, and about $80 million in additional cuts to
public safety. These reductions, if triggered, would
take effect on or after January 1, 2012.
3. If the December 15, 2011, updated forecast of revenues
predicts revenues less than $86.5 billion, the cuts
outlined above are still triggered, but the following
additional reductions, which total about $1.9 billion,
would also occur up to the amount specified:
A. $248 million to the California Department of
Education related to eliminating funding for
home-to-school transportation.
B. $72 million to the California Community Colleges
related to an apportionment decrease.
Related legislation in the budget package would include
the statutory provisions to implement these reductions
and to make other reductions that bring the total in
this secondary trigger to $1.9 billion. The additional
trigger reduction includes $1.5 billion from reducing
the 2011-12 school year by up to 7 days. These
reductions, if triggered, would take effect on or after
January 1, 2012; however, the reduction to the 2011-12
school year would take effect on or after February 1,
2012.
4. Requires that the Director of DOF notify the Joint
Legislative Budget Committee of any in reduction in
appropriations made due to the operation of this section
within 10 days of the reduction.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
DLW:kc 6/28/11 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
**** END ****
CONTINUED
AB 121
Page
4
CONTINUED