BILL ANALYSIS �
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Date of Hearing: April 28, 2014
ASSEMBLY COMMITTEE ON BUDGET
Nancy Skinner, Chair
ACA 13 (Nestande) - As Introduced: March 17, 2014
SUBJECT : State Budget
SUMMARY : Prohibits the Legislature from sending to the
Governor a Budget Bill in which General Fund appropriations
exceeded General Fund revenues as determined by the Controller.
Specifically, this bill :
1)Requires the Controller to provide to the Legislature no later
than June 1 of each year an estimate of the General Fund
revenues for the budget year with the estimate to be included
in the Budget Bill.
2)Requires the Controller, within three days after the Budget
Bill is sent to the Governor, to certify whether the bill
would satisfy the existing requirement that Budget Bill
appropriations (together with other appropriations and amounts
transferred to the Budget Stabilization Account) do not exceed
General Fund revenues for that fiscal year.
3)Prohibits the Governor from signing the Budget Bill into law
prior to receiving the Controller's certification as described
above.
4)Allows the Governor to sign the Budget Bill, if the Controller
has certified that revenues do not exceed appropriations (as
described above), only if the following occur:
a) The Governor eliminates or reduces one or more
appropriation items such that General Fund appropriations
do not exceed General Fund revenues; and,
b) The Governor submits the budget bill to the Controller
who certifies within three days of submission that General
Fund appropriations do not exceed General Fund revenues.
5)Prevents the Legislature from adjourning for more than 10
days, after the Budget Bill has been sent to the Governor,
before the Controller certifies that for that Budget Bill
General Fund appropriations do not exceed General Fund
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revenues.
EXISTING LAW: Requires submission by the Governor to the
Legislature a budget plan with proposed expenditures and
estimated revenues. 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 : According to the State Controller's Office (SCO),
the SCO currently lacks the expertise required to determine
whether the budget is balanced, as required by the measure. To
carry out the requirements of this measure, the SCO believes it
would need 37.3 permanent and 11.5 limited term positions (1.5
one-year LT and 10 three-year LT) at an initial cost of $6.6
million in year that would eventually decrease to $4.7 million
ongoing.
COMMENTS : The Controller serves as the state's chief fiscal
officer and as such, the office offers professional
administrative services, fiscal controls, and independent
oversight of the state's financial activities. The office
monitors cash balances as part of its regular duties; however,
it does not engage in revenue estimating to any substantial
degree. Revenue estimates are currently conducted by the
Department of Finance (DOF) and the Legislative Analyst's Office
(LAO) and are incorporated into the budget-making process. This
estimating activity relies on complex economic and financial
modeling and requires a non-trivial commitment of resources and
substantial expertise. Given this, it is likely that any
certification by the Controller would either rely on existing
data sources, such as those estimates already conducted by DOF
or LAO, or would require an additional commitment of resources
for the Controller to establish an independent revenue
estimating unit.
REGISTERED SUPPORT / OPPOSITION :
Support
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None on file
Opposition
None on file
Analysis Prepared by : Matthew Cremins / BUDGET / (916)
319-2099