Senate Budget and Fiscal Review Subcommittee No. 4 on State Administration and General Government

All right. We'll call the Subcommittee Number Four on State Administration General Government to order. We're unable to establish a quorum at the moment. We can begin taking testimony. The items on the docket today obviously are noticed for votes. We appreciate the participation of the public and welcome all comments.

We are also welcoming participation through teleconference. That number is 877-226-8216, and the access code is 6217161. First, I'll ask if there's anybody in the hearing room who would like to provide testimony. The Subcommittee, please come forward at this time. I see no one coming forward in the hearing room. Moderator do we have anybody queued on call?

Thank you. For public comment, you may press one and then zero. Again, that is one and then zero for public comments. And one moment while we gather their line numbers. And we will go to line 13. Your line is open.

Hello, my name is Ivanka Saunders. I am making a comment on Issue 13: Reallocation to Downtown Fresno. My name is Ivanka Saunders. I'm a regional policy manager with Leadership Council for Justice and Accountability serving the communities of Fresno.

We are just learning about this proposal to reallocate 250,000,000 of local government budget sustainability funds to the City of Fresno's Infrastructure Plan for investment into the high-speed rail. We are talking to community members and partners as there have been no public conversations about this proposal. We have concerns with the projects included in this proposal. We look forward to engaging with the Committee and in this budget process as we learn more about it. Thank you.

Thank you. Next we'll go to line 11. Your line is open.

My name is Veronica Stumpf. I'm a real estate broker at Stumpf and Company, a family name in Fresno since 1898. I specialize in the sales and leasing in Downtown Fresno. When I started working downtown, it was an area long forgotten by most investors. Today that's changed. I work with local and out-of-town businesses and investors who are excited to be part of downtown redevelopment.

However, they need the help of public investment. That is why I am calling to ask for the Senate Budget Committee to support the inclusion of the City of Fresno's Public Infrastructure Plan for 250,000,000. With this crucial amount of money, properties that have sat vacant for years will see much-needed investment. Thank you.

Thank you.

And the next caller will come from line 26. Your line is open.

Hi. This is Miguel Arias as a Fresno City Council Member representing Downtown Fresno, West Fresno, Tower District, and the centripetal areas of our communities. I'm calling in support of 250,000,000 dollar investment to our downtown infrastructure as it is the driving force for our pre-zoned area that zoned for 75,000 new housing units.

This one-time investment by the state would allow us to build up to 10,000 housing units and reconnect the two community colors that would divide it by the construction of the rail system and the freeway system, Chinatown, and Downtown Fresno. These are both communities of significant poverty, significant socioeconomic needs, and these investments would allow us to finally reconnect them with quality, mixed income, and affordable housing and the public amenities like green space that we all deserve.

So I urge you to support the allocation of 250,000,000 dollars to the investment of Downtown Fresno and so that our Downtown Fresno can meet the housing needs that are expected from an urban center in the fifth largest city in the State of California. Thank you.

Thank you.

Thank you. Next, we'll go to line 12. Your line is open.

My name is Jan Minami. I'm the Project Director for the Chinatown Fresno Foundation. We strongly support and ask you to strongly support the 250,000,000 investment in Downtown Fresno which includes Chinatown Fresno.

Chinatown is an area that has seen significant disinvestment over the years and this infrastructure investment will support the housing that we are working to develop in Chinatown along with the commercial--the growth in commerce in the Chinatown neighborhood. Thank you.

Thank you.

Thank you. Next, we'll go to line eight. Your line is open.

Hello. My name is Victor Negrete. I am an owner of a downtown barbershop in Downtown Fresno. I'm calling to support the City of Fresno Public Infrastructure Plan of 250,000,000 for request of approval from the Senate Budget. I am a small property owner and aspiring housing developer, but there will be no building if the sewer lines aren't ready. So thank you very much. Have a good day.

Thank you.

Thank you. Next, we'll go to line 29. Your line is open.

Hi. My name is Kelly Cartasha and I am a small business owner in Downtown Fresno. I'm calling to support the proposed 250,000,000 dollars that could be allocated to serve the infrastructure of Downtown Fresno. We are in a housing crisis and I really feel like if we were to be given this money for the infrastructure, that we could do our part in helping with the housing crisis.

Data shows that lots and lots of people want to move to our downtown area and all we need is the infrastructure. We've worked really hard as the city to already get the space rezoned and ready to go. This last little bit, this 250,000,000 will be the push that we need. Really appreciate everybody getting this as a proposal and all the work that you've done to get it here. Thank you very much.

Thank you.

Thank you. Line nine, your line is open.

Hi. My name is Dr. Cassandra Little and I'm the CEO of Fresno Metro Black Chamber of Commerce and Chamber Foundation which is located in Downtown Fresno. I am calling to strongly support the City of Fresno Public Infrastructure Plan for 250,000,000 dollars and request its approval in the Senate Budget.

On behalf of the Fresno Metro Black Chamber of Commerce, I want to thank the state for prioritizing Fresno after decades of disinvestment. It is our hope that the investment and Fresno Downtown Infrastructure Plan will also ensure that community-based organizations that are representing communities of color are represented in the plan and that the key infrastructure planning, such as low carbon transportation, are represented in the funding. Again, I want to say thank you on behalf of the Chamber.

Thank you.

Thank you. Line 27, your line is open.

Hi. My name is Rick Roush, and I am the owner of the T.W. Patterson Building, named 100-year-old this month, historically registered building, 150,000 square feet, and we are primarily all commercial with attorneys and tenants, and we have no housing downtown, and we greatly encourage you to support this 250,000,000 dollar request and approve to the Senate Budget.

What this means to our organization since we bought the building in 1994, we have continued to strive with the city and tried to cultivate a good relationship downtown for Safe and Clean, and this would help facilitate all the endeavors of the pre-bid, the stadium, and everything we've worked on the last 30 years. So thank you and we encourage you to pass this through.

Thank you.

Thank you. Line seven, your line is open.

Hi. This is Bob Garfield. Can you hear me?

Yes, we can.

Okay. I'm calling in support of the Public Infrastructure Plan for Downtown Fresno. I have owned commercial property on Fulton and Mariposa Street, the corner there, and my tenants include popular department stores like Blue Bird and B-Maxx and All 4 Youth, as well as locally-owned restaurants. There's Toshiko's, Chicken Shack, Mama's Cocina, and the Kids' Cafe.

The city relocated the 100-year-old Washerwoman, La Laveuse, by the French sculptor Auguste Renoir on the sidewalk of the Fulton-Mariposa intersection. I've invested in my buildings and I have named it Renoir Corner, and to complement the Impressionist Renoir art theme, I've added reproductions of paintings by Degas, Renoir, van Gogh, Cassatt, Gauguin, and others through the facade, and over the years, my tenants have included hardworking immigrants whose first businesses in America have been the stores they have leased from me.

They have put in great efforts in order to send their children to college and buy homes, and I have helped them with work that a supportive landlord can provide. I will be investing another million dollars in the Renoir Corner to modernize three vacancies for prospective retailers who want to lease the spaces for Smashburgers, kebabs, and jewelry, and we're waiting for financing that I can build out these improvements.

And once these spaces are completed, I want to develop the upper floors of 1118 Fulton to its modern potential, and the Downtown Fresno Infrastructure Plan Project is a great idea that will spark all of our downtown businesses and make these projects come to successful conclusion. Thank you very much and I appreciate your support.

Thank you.

Line 31, your line is open.

Hi. Good afternoon. My name is Ashley Swearengin and I am the CEO of the Central Valley Community Foundation and former mayor of the City of Fresno. It's an honor to address you this afternoon and to urge your support for the City of Fresno Infrastructure Plan. We are beyond excited about this investment. It has been almost 20 years in the making.

After 15 years of community-driven planning and thousands of residents being involved in determining the future of our community, including adopting major land use policy changes, regulatory changes, adopting by-right development in every zone district in our city and then rezoning every parcel of our city in one day, we have finally arrived at the moment where our city is truly shovel-ready.

Today we are one of the lowest income and most environmentally challenged communities in all of California. We have done the work to deliver 9,000 housing units, local tax revenue, and GHG reductions with your support. Thank you so much.

Thank you.

Line 20, your line is open.

Hi. My name is Jordan Sanchez. I'm the president of the Downtown Fresno Foundation, representing a diverse coalition of businesses, residents, and community stakeholders in the vibrant City of Fresno. I'm calling upon your esteemed Committee to lend its support to the City of Fresno's Public Infrastructure Plan, requesting the allocation of 250,000,000 and approve this vital investment into our city's future.

First and foremost, wanted to express my gratitude for your continued commitment to fostering prosperous communities across our great state. As you're well aware, adequate public infrastructure is the backbone of any thriving community. It plays an instrumental role in enhancing the quality of life for residents, attracting business, and fostering economic growth.

The City of Fresno's Public Infrastructure Plan serves as a comprehensive blueprint for addressing the pressing infrastructure needs that are currently impeding our city's progress. By investing 250,000,000 into critical projects, we have the opportunity to revitalize our aging infrastructure, stimulate economic activity, and create a lasting positive impact on the lives of our residents.

One key aspect of the plan is to improve our transportation infrastructure. Upgrading and expanding our roads, bridges, and public transit systems not only alleviate traffic congestion, but also provides safer and more efficient transportation options for our citizens.

This investment will enhance the connectivity between our neighborhoods, both for commerce and ensure Fresno remains an attractive destination for business and visitors alike. Furthermore, the Public Infrastructure Plan prioritizes development of modern utilities and public facilities. Upgrading our water and sewer system along with enhancing our parks, libraries, and public buildings will create a healthier and more sustainable city.

These improvements will support our growing population, foster community engagement, and enhance overall livability for Fresno for generations to come. By approving the City's Fresno Public Infrastructure Plan, you'll be demonstrating a strong commitment to investing in the well-being and prosperity of our community. Your support will contribute to the economic vitality of Fresno, improve the quality of life for our residents, and lay the foundation for future growth and development.

I urge you to consider the tremendous benefits of the City of Fresno's Public Infrastructure Plan that we can bring to our city. By approving the allocation of 250,000,000, you will provide the necessary resources to transform Fresno into a model city with robust and modern infrastructure. Your decision will be a catalyst for positive change, empowering our community to thrive and reach a full potential. Thank you for your time, attention, and consideration.

Thank you.

Thank you. Line 17, your line is open.

Hi. My name is Derek Franks. I'm the President of the Fresno Grizzlies, the Minor League Baseball team located right here in the heart of Downtown Fresno, and I'm calling in support of the City of Fresno's Public Infrastructure Plan for 250,000,000 and request its approval in the Senate Budget.

As many have mentioned, there's a great need for housing in Downtown Fresno and a great demand for it, and the Grizzlies would like to thank you for prioritizing Fresno in your budget and giving us the opportunity to build on all the hard work that has been done in our downtown by so many and helped get us to a thriving downtown that can be a model in this state that we know, as we built this ballpark many years ago, we conceived that many years ago. So thank you for the consideration and the time today.

Thank you.

Next, line 22, your line is open.

Hi. My name is Ari Martinez, Chief of Staff, calling on behalf of Fresno County Supervisor and Board Chair Sal Quintero who represents downtown and the surrounding neighborhoods. We want to express support of the City of Fresno Public Infrastructure Plan for the 250,000,000 and request its approval in the state budget.

As the fifth largest city and in the heartland of the state's agriculture, Fresno experiences a blend of urban and rural issues which impacts its infrastructure. The monies will go a long way to helping the rebuilding of downtown infrastructure affected by wear and tear over the decades.

Additionally, it will help to go to helping Chinatown right next to the site of the future high-speed rail station and revitalize economically impacted neighborhoods from downtown. As you've heard, the plan will help boost public and private invested, estimated to be around 3.5 billion. Additionally, 25,000 jobs will be generated from public infrastructure and housing construction over three years, that and many more other benefits that are expected, so we strongly support this approval. Thank you.

Thank you.

Thank you. Line 14, your line is open.

Good afternoon. My name is Will Oliver and I serve as the vice president for the Fresno County Economic Development Corporation located in Downtown Fresno. We are proudly in support of the City of Fresno's Public Infrastructure Plan for 250,000,000 dollars and request its approval in the Senate Budget.

For over a decade, our organization has been consistently and proudly in support of California high-speed rail for the impact it will have on our economy. We're proud of downtown being the home to the nation's first high-speed rail station, but for projects like high-speed rail to realize its full potential, it must be accompanied by investments in infrastructure, which as you know, has an outsized role on economic development and community well-being.

The 250,000,000 dollar Public Infrastructure Plan will support new housing opportunities of choice that are also affordable and in close proximity to green space, amenities, transit, jobs, and nightlife, all aspects that make our downtown and economy thrive. This is a game changer for a disinvested part of the region that is truly investment worthy and we appreciate the state and the Committee for considering this action. Thank you.

Thank you.

Line 36, your line is open.

Hi. My name is Enrique Meza. I am the owner and president of MEZA Films. We're located in Downtown Fresno. I've had the opportunity to spotlight thousands of people in downtown and showcase numerous businesses who have all had a humongous passion for making Fresno great.

I'm calling in support of the city's--the City of Fresno's Public Infrastructure Plan for 250,000,000 and request its approval by the Senate Budget. By investing in Downtown Fresno and prioritizing infrastructure after decades of disinvestment, I ask you to push forward the investment and growth for housing and creating an equitable place for the future of Fresno. Thank you.

Thank you.

Next. Line 41, your line is open.

Mr. Chair and Members, Beverly Yu on behalf of State Building and Construction Trades Council of California. We are in strong support for the City of Fresno Public Infrastructure Plan proposed in the May Revise. This level of investment would be transformational for the fifth largest city in California and would support 9,000 housing units, 25,000 construction jobs over three years, over 3.5 billion of additional investment from the public and private sectors, and nearly 80,000,000,000 in local tax revenue over the next 30 years.

In 2021, the Fresno, Madera, Kings and Tulare Building Trades Council successfully negotiated a citywide project labor agreement with the City of Fresno for city projects over 1,000,000 dollars. With the PLA in place, this investment will allow the city to prioritize apprenticeship opportunities for its own residents and provide a real boom to all business sectors within the community.

We urge your support for this important proposal. We are also in support of the 14,000,000 dollars May Revise proposal for Exposition Park, and this will lead to thousands of high road jobs. We urge your support for this proposal as well. Thank you.

Thank you.

Line 39, your line is open.

Hello. My name is Sam Wilkinson and I'm with GRACE & End Child Poverty in California as well as the CalEITC Coalition. I'd like to thank this Committee and the Senate for your continued support of the state's tax credits that are targeted at low income Californians. We applaud your repeated support for both the protection and expansion of the California Earned Income Tax Credit as well as the Young Child Tax Credit.

We are in complete support of Senate Bill 220 that would raise the CalEITC minimum to 275 for all CalEITC eligible families. In tough financial times, there's no better investment to make than on our families living in poverty, and for every dollar spent on tax credits targeted at low income families, $1.70 goes directly back into local economies.

We also are in this enthusiastic support of the Senate's graduated corporate tax rate proposal. This would allow the state to raise revenues equitably, ensure the state's wealthiest corporations pay their fair share, and give more spending power to fund critical anti-poverty proposals. Thank you so much.

Thank you.

Thank you. Line 40, your line is open.

Hi. This is Elliott Balch. I'm the president and CEO of the Downtown Fresno Partnership. We operate a property assessment district with 346 parcels contributing in our downtown and are strongly in favor of the proposed allocation for the City of Fresno Public Infrastructure Plan.

Thinking about the world of tomorrow, thinking about the future of the Central San Joaquin Valley, Downtown Fresno is well positioned to thrive as ground zero for environmental sustainability, for inclusive economic opportunity, for economic dynamism, nurturing the new business sectors of our future, and it's the most exciting and fun place in the region which is why we see thousands of people not only visiting Downtown Fresno over and above pre-pandemic levels now, but also seeking housing in our downtown when it's available.

So we see--our smallest businesses see that more housing downtown will have a huge impact for those businesses, bringing customers closer, and we see that urban housing plays to our strength. It puts housing in an area of the state that's relatively affordable. So the Downtown Fresno Partnership strongly urges your support. Thank you.

Thank you.

Thank you. Next, we'll go to line 44. Your line is open.

Good afternoon. My name is Jazmine Munoz on behalf of the United Ways of California and the CalEITC Coalition. I would just like to thank Members of the Senate for including key tax credits like the California Earned Income Tax Credit within their Key Values Plan and for championing an extension of the CalEITC minimum as one of their top priorities within SB 220.

We know these investments will lead to increased prosperity for our most vulnerable Californians and we hope to see these included in the legislature's final budget. Thank you.

Thank you.

Thank you, and Mr. Chair, we have no further public comment in queue at this time.

Thank you very much for your help. I think we may have one other person present in the hearing room who would like to testify. Please state your name for the record.

Mark Stivers for the California Housing Partnership, and just two comments on affordable housing. One: we continue to urge support for the additional affordable housing investments that were in the Senate Budget priorities, namely the 1,000,000,000 for the state Low-Income Housing Tax Credit and an additional 300,000,000 for HCD programs.

Both of these will help us draw down federal tax credits that we're currently leaving on the table, so it kind of doubles the impact. Secondly, we just want to thank the Committee for the proposed action to keep the Joe Serna Farmworker Housing Grant Program limited to nonprofit developers as it has been for a couple of decades. Thank you very much.

Thank you. Anyone else present in the hearing room want to provide testimony? Seeing no one, thank you all for your participation. I'll bring it back to the Subcommittee--oh, before we move on, let's establish a quorum.

Senators Padilla? Present. Caballero? Present. Niello? Here. You have a quorum.

Thank you very much. We'll bring it back to the Sub for comments or questions on items before we take up the vote only calendar. Senator Caballero.

I'll make a comment. I'm going to be supporting the budget in its entirety but I still have some concerns about the growth of government and the requests for large number of employees in certain departments because the reality of the situation is, if you ask for 19 employees, you're not going to hire 19 employees this year.

You're just not unless you have people already identified. Having worked in the administration, I know how long the HR process takes, and besides which, I'm not sure you want 19 people coming in all at the same time in some of these departments without there being a real significant work plan and the set up to be able to get the work started once people start, and I guess my point is that you start with five, you people those positions, and then you create the plan after that and then you go out and you work on the rest.

The reason I would have done it in a couple of years time is because at a time when our budget is so tight, I think it's just fiscally prudent. Like I said, I'm going to support the budget, but I would like the Administration to kind of keep in mind that if we can do with fewer employees and still get the work done, then that's the direction we should go in and see if we can have savings for next year that will help us out.

This is nothing new. I spoke about it when we reviewed some of these requests and they didn't change, so I just wanted to make sure to get that out there. Thank you, Mr. Chair.

Thank you, Senator. Senator Niello.

Thank you, Mr. Chair. Just--was it yesterday or day before that the LAO issued a new assessment on the budget and things continue to deteriorate in his opinion more than the governor's May Revise as acknowledging both in terms of shortfalls in revenues this year and in out-years, and in lower estimates of costs where the LAO is seeing greater growth, in particular HHS and other areas, and I've noted that in this Committee, the governor has actually proposed some reductions in spending that the Committee has rejected.

And I don't know what's happening in the other Subcommittees, but I guess I would just venture a wild guess that it's probably similarly the same. The pro tem sent an email message out just an hour or two ago talking about the Protect Our Progress which--I have on behalf of our caucus, issued a counter to the Protect Our Progress, giving our assessment of the progress as it's existed over the last several years and our take on what priorities should be, and I'm just very concerned that we're digging a deeper hole perhaps in all of the Subcommittees.

We go on to budget hearings. I'm told being merciful of our other time commitments in the next week and a half that I guess there's no Budget Committee meetings next week, but we will in June, and we have significant work ahead of us not just to balance the upcoming year's budget, but the next two or three beyond that that all at this point don't look very bright.

And I'd also note kind of parenthetically but still significantly that an economics professor at CSU Stanislaus has come out with a projection that he sees a deterioration of the economy of the Central Valley in particular over the next couple of years.

So I don't want to say, 'doom and gloom,' but I do want to be realistic, and I think we need to begin taking a more realistic look at some trying times over the next two, three, or four budget years.

Thank you, Senator, and I would just add a couple of thoughts, particularly with respect to Issues 12 and 13 that we'll take up on the vote only calendar in a moment. First, with respect to concern about at mid-year or in the beginning of next fiscal what the picture looks like, I am concerned, and I'm concerned that even with--

I think the Senate's plan is well thought out in terms of identifying the right priorities, that the resources are not going to be where we would like or expect them to be and that is of great concern, and often in constrained budget times, it is completely about competing equally valuable priorities.

On that note, Items 12 and 13 are before this Subcommittee because of reduction and reallocation. I would just want to put a comment in the record that in the long run, I think the Sustainability Fund, speaking of priorities and on portions of the state geographically being on the brink of suffering economic stress at a level we haven't seen in recent history, and on the subject of priorities, I think Sustainability Fund was the right budget priority in any time, in flush particularly or in constraint budget scenarios simply because of the nature, the unique nature and circumstances that many of those qualifying counties and cities find themselves in.

This is an ongoing issue, so I would hope--there's an old saying: 'where there's political will, there's a way.' Even in constrained times, we find interesting ways to come up with funding for things that we decide are priorities, and I would hope that we would not forget that with respect to the entire concept that drove the Sustainability Fund in the first place.

With respect to reallocation, there's certainly a well-vetted and a well-planned and very worthy project for the investment of these dollars for a lot of reasons, and for those reasons, I will be supporting moving it out, but I wanted to put those comments in the record that there may have been a more strategic and comprehensive approach to addressing these very valid priorities that this Chair, at least, for what it's worth, would have preferred that approach have been taken.

That said, there's a shovel-ready situation in Fresno that is worthy of the state's partnership here. For those reasons, I will support it. That said, if there aren't any more comments or questions, I will move to the--vote on the items. We'll take up in Group Number One.

Issues five through nine, Issue 12, Issue 14, 20, 21, 24, 25, 28, 29, 31, 35, 37, 39, 40, 43, 53, 55, 56, 57, 59 through 62, 65, 66, 67, 74, 75, 76, 80, 81, 82, 85, 88, 89, 91, 92, 93, 95 through 104, and 106 through 109. I'll entertain a motion.

Move the staff recommendation.

Move Caballero. Please call the roll.

Senators Padilla? Aye. Padilla, aye. Caballero? Aye. Caballero, aye. Niello? Aye. Niello, aye.

Thank you. The ayes are three. The noes or abstentions are zero. Those items are out. Group Number Two will be composed of Issues 1 through 4, 10, 11, 13, 15 through 19, 22, 23, 26, 27, 30, 32, 33, 36, 38, 41, 42, 44 through 52, 54, 58, 63, 64, 68 through 73, 77, 78, 79, 83, 84, 86, 87, 90, 94, 105 and 110. And I'll entertain a motion.

Move the staff recommendation.

Move Caballero. Please call the roll.

Senators Padilla? Aye. Padilla, aye. Caballero? Aye. Caballero, aye. Niello? No. Niello, no.

Thank you. The ayes are two; the noes are one. No abstentions. Those items are out. And do we have Item 34? Still? Item 34. I'll entertain.

Move the staff recommendation.

Move Caballero. Please call the roll.

Senators Padilla? Aye. Padilla, aye. Caballero? Aye. Caballero, aye. Niello? Not voting. Niello, not voting.

All right. The ayes are two; the noes are zero. One not voting. That item is out, and I believe that concludes last Sub Four hearing. I want to express my gratitude to everyone who participated, provided testimony, all the departments who presented, and most especially our very capable Budget staff. Much thanks for your work, and with that, the Subcommittee will stand adjourned.