ARTICLE
The 2024-2025 California Budget Dance is starting with a deficit, setting the stage for Governor Gavin Newsom and the California Legislature to tackle what may be their most challenging policy decision yet. Regardless if the deficit is $38 billion as noted in the Governor’s early analysis or the $78 billion as described by the nonpartisan Legislative Analyst Office, there’s no denying the gravity of the situation. The normal budget dance routine usually begins after the April tax collection season and when the May Revision is sent to the Legislature for debate and consideration. The most recent projections about the tax collection being much lower than earlier predicted only intensify how the Governor and Legislature must tighten our expenses. Unless there is a sea of change in how the state collects taxes, we will always see an ebb and flow of funds into the California coffers because we are reliant on personal income and capital gains tax. First-year leaders in the state Assembly and Senate have never led state budget negotiations, even in good times, let alone trying to address a shortfall of this size. This inexperience during the quickest budget downturn includes the entire class of lawmakers who were not aware of the level of deficit just a few months ago. California’s budget picture is the #1 topic in Sacramento, overshadowing nearly every other policy issue that is the usual early spring committee activity. Lawmakers are receiving calls and letters from their respective constituent groups advocating that their programs and services are not severely cut or eliminated. The challenge for a lawmaker is having to scale back on their early ambitions. What will the new legislators do while learning on the job? They most likely will lean on the long-time seasoned legislative staff for guidance and seek counsel from former state legislators. An example of the need for urgency is noted by the new Chair of the Assembly Budget Committee. As Assemblymember Jessie Gabriel takes the lead in the Assembly budget discussion, he states, “This is going to be a new experience for every legislator, including me.” The sheer scale of the turnover of legislators since the last downturn can’t be overstated. Also, both the Senate and Assembly have new leaders, Senate Pro Tem Mike McGuire and Assembly Speaker Robert Rivas both took the leadership role last summer. As anticipated, the leaders appointed their legislative allies to important chair positions throughout the legislature. Since 1990 when term limits were approved by voters and modified in the early 2000s, policy making has shifted to even more staff-driven. Budget negotiations kick off with a discussion between legislative staff, the governor’s office, and the Department of Finance bringing institutional knowledge into the discussion. Please note that there are some seasoned experienced legislators who will be ‘advisors’ to the new legislators. Legislators like our own Senator John Laird, Senator Scott Wiener (who moved over to Chair the Senate Budget Committee), Assemblymember Buffy Wicks, and Assemblymember Phil Ting have budget experience to share with their colleagues. There are some differences between the 2024-25 budget vs. the budgets in the early 2010s when unemployment skyrocketed and the state did not have any reserve funds. Despite the structure deficit, California has reserves and has been mindful of money collected in 2021 and 2022 that are set aside for future spending on infrastructure improvements and other projects. The next couple of months will bring a slew of constituents knocking on Legislators’ doors about saving this program, avoiding massive cuts to social services and an array of state spending obligations. Let’s keep a careful eye on how the legislature operates as any reduction in state funding can and will have an impact on local government.
The 2024-2025 California Budget Dance is starting with a deficit, setting the stage for Governor Gavin Newsom and the California Legislature to tackle what may be their most challenging policy decision yet. Regardless if the deficit is $38 billion as noted in the Governor’s early analysis or the $78 billion as described by the nonpartisan Legislative Analyst Office, there’s no denying the gravity of the situation.
The normal budget dance routine usually begins after the April tax collection season and when the May Revision is sent to the Legislature for debate and consideration. The most recent projections about the tax collection being much lower than earlier predicted only intensify how the Governor and Legislature must tighten our expenses. Unless there is a sea of change in how the state collects taxes, we will always see an ebb and flow of funds into the California coffers because we are reliant on personal income and capital gains tax.
First-year leaders in the state Assembly and Senate have never led state budget negotiations, even in good times, let alone trying to address a shortfall of this size. This inexperience during the quickest budget downturn includes the entire class of lawmakers who were not aware of the level of deficit just a few months ago. California’s budget picture is the #1 topic in Sacramento, overshadowing nearly every other policy issue that is the usual early spring committee activity. Lawmakers are receiving calls and letters from their respective constituent groups advocating that their programs and services are not severely cut or eliminated. The challenge for a lawmaker is having to scale back on their early ambitions. What will the new legislators do while learning on the job? They most likely will lean on the long-time seasoned legislative staff for guidance and seek counsel from former state legislators.
An example of the need for urgency is noted by the new Chair of the Assembly Budget Committee. As Assemblymember Jessie Gabriel takes the lead in the Assembly budget discussion, he states, “This is going to be a new experience for every legislator, including me.” The sheer scale of the turnover of legislators since the last downturn can’t be overstated. Also, both the Senate and Assembly have new leaders, Senate Pro Tem Mike McGuire and Assembly Speaker Robert Rivas both took the leadership role last summer. As anticipated, the leaders appointed their legislative allies to important chair positions throughout the legislature. Since 1990 when term limits were approved by voters and modified in the early 2000s, policy making has shifted to even more staff-driven. Budget negotiations kick off with a discussion between legislative staff, the governor’s office, and the Department of Finance bringing institutional knowledge into the discussion.
Please note that there are some seasoned experienced legislators who will be ‘advisors’ to the new legislators. Legislators like our own Senator John Laird, Senator Scott Wiener (who moved over to Chair the Senate Budget Committee), Assemblymember Buffy Wicks, and Assemblymember Phil Ting have budget experience to share with their colleagues.
There are some differences between the 2024-25 budget vs. the budgets in the early 2010s when unemployment skyrocketed and the state did not have any reserve funds. Despite the structure deficit, California has reserves and has been mindful of money collected in 2021 and 2022 that are set aside for future spending on infrastructure improvements and other projects.
The next couple of months will bring a slew of constituents knocking on Legislators’ doors about saving this program, avoiding massive cuts to social services and an array of state spending obligations. Let’s keep a careful eye on how the legislature operates as any reduction in state funding can and will have an impact on local government.