Senate Standing Committee on Budget and Fiscal Review

But when you leave, I'll just adjourn the meeting.

Okay? The Committee on Budget and Fiscal Review will come to order. Good morning. The Senate continues to welcome the public in person and via our teleconference service. So for individuals who want to participate by the teleconference service, our number is 877-226-8163, the access code is 736-2832. And as we always do, I'll maintain decorum as is customary and anyone who is disruptive may be removed from either the remote meeting service or have their connections muted. We're holding our committee here at the O Street Building, room 1200.

And of course any of the Members of the committee who are not in another committee right now, I would appreciate if you did come down to room 1200 so we could establish quorum but in the meantime we will begin as a Subcommittee. So public comment will be heard after all the discussion items have begun. And let me just say what it is that we have before us today before I turn it over to my vice Chair.

So the package of bills we hear today represent changes to the 23-24 budget and accompanying trailer bills. And amongst the ones we have before us today include AB 104, which amends the budget Bill, the main primary budget Bill and then ten trailer bills. After hearing all the bills, as I mentioned before, we'll have public comment prior to the committee voting. The bills include technical changes, a few issues that were not completed in June and ratification of various bargaining unit MoUs.

And with that, I'll turn it to my Vice chair.

Thank you very much, madam Chair. And I guess to continue on comments I've made from the floor, I can hardly wait to find out which bills that we will have here that will have actual budget impacts and also perhaps further progress on curing the deficit that we have and will probably continue to experience next year as revenues deteriorate a bit. So with that, thank you very much.

And I think all of us will hope that revenues do not deteriorate. And given that the revenue just as a side comment that the revenues that came in to date are higher than what had been projected, at least for the moment, we're in OK spot. But of course, as we know, that could always change. So the presentations will be from the Department of Finance and we have Erica Lee here from the Department of Finance.

So Ms. Lee will allow you to begin and can you please provide a brief description of each of the bills that are before us. And after she presents all the bills that are before us, that's when we'll open up for discussion versus doing it individually after each one. Okay? So any of the things she's presenting, if you have a question that occurs to you during the presentation, make a note of it. So when I call on you, you can bring it up. Okay, great.

Go ahead, Ms.. Lee.

Thank you. Good morning, Madam Chair. Vice Chair Neilo, Members of the committee. Erica Lee with the Department of Finance, here to present on a package of bills for the 23 24 budget. The first is ABSB 104, which is a budget Bill junior, which includes amendments to the 23 24 and 22 23 budget acts. This Bill provides amendments to K Twelve and higher education investments that support schools, students and families.

Specifically, it shifts roughly 17 million from the community college budget to the University of California budget to enable the UC to support the full cost of three intersegmental affordable student housing projects through the issuance of UC revenue bonds. It appropriates 163,000,000 onetime Proposition 98 General Fund to the Inclusive Early Education Expansion Program for increasing access to inclusive early learning and care programs for children with disabilities and provides an extended encumbrance availability period for these funds for health and human services.

It makes technical adjustments to implement the collective bargaining agreement with childcare providers United or CCPU, and the Parity package for non represented childcare providers. It shifts funding for the public Health Nurse certification fee waivers from the Department of Healthcare Access and Information to the.

Department of Consumer Affairs excuse me, just 1.0. If you could speak a little closer to the microphone. I don't know if others are having a difficult time, but I am having.

A difficult much better. Would you like me to begin from the beginning or just continue?

Okay.

This is much better.

Okay.

It increases by 40,000,001 time Federal Trust Fund authority for the Department of Healthcare Services to reflect federal grant awards and extensions in resources. It includes 3.7 million General Fund, onetime to enable the Central Valley Flood Protection Board to support costs for 19 existing staff who provide oversight and management of the state federal flood control system.

It includes an additional 12.2 million General Fund for the Pine Mountain Forest Fire Station, which is nearing completion of the construction phase of the project and has been deemed ineligible for lease revenue bond financing for broadband. It increases the California Department of Technology's Authority to expend a $73 million federal grant from the National Institute of Standards and Technology Servicing for the National Telecommunications and Information Administration to support work towards the California Middle Mile Broadband Initiative for Corrections.

It reappropriates the remaining balance from the nonprofit performing Arts grant program and the California Venues Grant Program to implement the performing Arts Equitable Payroll Fund to provide grants to small nonprofit performing arts organizations to hire and retain employees. It mends provisional language to expand eligible grant recipients to include other entities that have expertise in providing legal training to legal aid providers or public defenders, and this Bill makes other technical and clarifying changes. Moving on to the next Bill. ABSB 135 the safety trailer.

Bill this Bill extends the authority to use remote hearings in specified criminal proceedings by one additional year. It authorizes the Department of justice to adjust the ammunition authorization fee via the regulatory process. It provides DOJ the necessary authority to conform with Federal Bureau of Investigation requirements for sharing subsequent summary criminal history information and moving on to the next Bill. ABSB 137 the Health Trailer Bill. This Bill extends a moratorium on the New Department of Public Health issued hospice licenses by one year.

It requires the Emergency Medical Services Authority Director and chief medical officer appointments to be subject to confirmation by the state Senate. It clarifies that both prescription and over the counter drug products may be developed or manufactured through CalRx. It authorizes the Department of Healthcare Services to raise licensing and certification fees assessed upon residential and outpatient substance use disorder programs by up to 5% annually beginning in 27 28, and requires the Department to develop a fee waiver process for facilities experiencing financial hardship by July 1, 2024.

And this Bill increases Federal Trust Fund Expenditure authority by 56 million to reflect an extension of a previously awarded Substance Use Disorder Prevention and Treatment Block Grant to provide substance use disorder services to eligible individuals. The next Bill is ABSB 138 human Services. This Bill promotes equity within the developmental service system by establishing more uniform procedures at regional centers and examining access to common supports and generic services across the state.

It establishes a complex needs residential acute crisis program to serve individuals with co occurring intellectual and or developmental disabilities and mental health diagnoess. It reappropriates 27.4 million in one time. Federal American Rescue Plan Act, or ARPA. Funding for the Department of Developmental Services early Intervention Services program, also known as Early Start. The reappropriation extends until March 31 of 2025 and the liquidation period for funds encumbered by September 28th 2023.

It codifies the Department of Rehabilitation's Business Enterprises program for the blind workers compensation self insurance program. And this Bill makes other technical and clarifying changes. Moving on to ABSV. 140, childcare. This Bill implements early childhood education related proposals to ratify the June 30, 2023 agreement between the state and childcare providers United CCPU and to provide parity for nonrepresented subsidized childcare and preschool providers.

The CCPU agreement and proposed parity package for nonrepresented providers reflects the cost of care plus rate change to part time and full time definitions, and extends childcare and preschool reimbursement flexibilities. It also includes 70 million for alternative payment agencies to conduct CCPU related workload.

Moving on to the next Bill. AB SB 141 the t-K through twelve education trailer Bill this Bill provides a waiver for the administrator to teacher ratio requirement for Paradise Unified School District for the 21-22 fiscal year through the 23-24 fiscal year. It authorizes the California Department of Education to recover overalllocated Learning Recovery emergency block grant funds from local educational agencies via principal apportionment offset.

It reallocates funds based on the revised appropriation amount and reports any uncollectible amounts to the Department of Finance and the Legislature by January 31, 2024. It exempts local educational agencies operating an expanded Learning Opportunities program from penalties when they are closed due to specified emergency conditions.

It authorizes until July 1 of 2024, any holder of a substitute teaching credential or permit to teach for up to 60 cumulative days for any one assignment with that credential or permit. This flexibility was originally granted in response to the COVID-19 pandemic and sunset on July 1 of this year. The K-12 omnibus trailer. Bill also makes several clarifying changes and corrects statutory references. Moving on to the next Bill.

ABSB 142 The Higher Education Omnibus Trailer Bill. This Bill shifts the authorization and support for three intersegmental projects from the California Community College budget to the UC budget. It establishes intent to seek a statewide lease revenue bond, or other fiscal approach to support approved California community college projects no later than the enactment of the 24-25 budget.

It also authorizes the community colleges to retain any cash provided to support their projects until the latter of either June 29, 2024, or the passage of the 24 25 budget. It expands institutional eligibility for the Golden State Teacher Grant program and caps a percentage of appropriated funds that can support awards for California residents that would be capable of receiving a $10,000 award. And finally, it requires the Scholarship Investment Board to partner with the LA.

Unified School District and the Riverside County Office of Education to explore ways to increase participation in the Cal Kids program through additional data sharing. Moving on to the next Bill. ABSB 143 the General government trailer Bill. This Bill extends the current alternative monthly minimum wage for goat herders from January 1, 2024 to July 1, 2026.

It requires the Department of Industrial Relations, in consultation with the Employment Development Department, to consult with stakeholders and submit a report to the Legislature by January 1 of 2026 on the conditions of sheep herders and goat herders to inform future discussions. It also includes an appropriation of $1 million special funds for both departments to complete this report.

The Bill also requires the California Housing Finance Agency to submit a report to the Legislature by March 1, 2024, on various options to Fund the California Dream for all program and makes changes to the existing program to target assistance to first generation homebuyers and lower income individuals. It expands the eligible recipients of resources provided by the Women in Construction Priority Unit within the Department of Industrial Relations to include all preapprintorship programs.

It conforms California law to federal law regarding portability of professional licensees for service Members and spouses that went into effect January 1 of 23. It extends the expiration date for any postgraduate physicians and surgeons training license that expires between June 1, 2023 and December 31, 2023 to March 31, 2024. And the Bill extends the Governor's COVID-19 Executive Order which waived various requirements of existing law related to the Bagley Keene and Brown Acts and the utilization of teleconferencing.

The waiver ended at the end of the last fiscal year. This Bill extends it to December 31 of this year. Moving on to the next Bill, AB SB 148 this is the Memorandum of Understanding for Various Bargaining Units. This Bill ratifies and funds memorandum of understanding between the Administration and bargaining units 12, the craft and maintenance engineers, 19, the health and social services professionals, and 9 bargaining units represented by the Service Employees International Union.

This Bill also funds payments and pay differentials for Bargaining Units 13 and 19 the stationary engineers and health and Social services professionals as well as statutory required General salary increases for Bargaining Unit Five or Highway Patrol and Judges. The 1.2 billion appropriation included in this Bill is 596.2 million General Fund provides 896,000,000 for rank and file employees and 262,000,000 for excluded employees. The next Bill AB SB. 151 is the memorandum of understanding with bargaining unit six.

This Bill ratifies and funds the MoU between the Administration and bargaining unit six. The California Correctional Peace Officers Association. The MoU term is two years. The 296,000,000 General Fund and appropriation included in these bills provides 230.8 million General Fund for rank and file employees and 66.1 million General Fund for excluded employees.

And moving on to the last Bill, ABSB 152 criminal Background Checks Trailer Bill. This Bill clarifies existing law for several departments to obtain federal criminal history background check information for state employees and applicants for licensure to continue regular operations and uphold its regulatory duties. These changes will bring the impacted state agencies into compliance with U. S. Federal Bureau of Investigation requirements and allow them to continue obtaining the required background checks. And with that, that is the presentation of the budget package and bills before you. Thank you.

Thank you very much. Before we go any further, I think we'll be able to establish a quorum. So let's call the roll.

Senator Skinner. Niello. Here. Becker. Here. Caballero. Dahle. Durazo. Eggman. Grove. Laird. Here. McGuire. Menjivar. Min. Here. Newman. Here. Ochoa Bogh. Here. Padilla. Here. Roth. Seyarto. Smallwood-Cuevas. We have a quorum.

Thank you very much. So we do have a quorum, and we can entertain questions but perhaps the LAO could provide some information with regard to the collective bargaining agreements. There was not enough time for the LAO to provide their financial review but we do have a draft, as I understand it, of that today and perhaps they might have comments on other portions of the proposal.

Sure. Good morning, Vice Chair and Members. Carolyn Chu with the Legislative Analyst Office. We received the tentative agreements for Local 1000 and Unit Six over the weekend. And as a vice chair referenced, we put together an initial assessment for the committee's review to better understand those tentative agreements and their implications. We highlight a few issues for the committee to consider as part of that analysis. We still are going to be conducting our typical review as required by statute.

Statute gives us a minimum of ten days to do that analysis. So we're in the midst of conducting that before the houses vote on the floor. With regard to these agreements, in terms of some high level comments, I can offer a couple of them. My colleague Mr. Schroeder can also add on. The first is just a point about timing.

This is an issue that consistently occurs with regard to the tentative agreements in which the Legislature receives the tentative agreements from the Administration, really with very little time to analyze them, understand their potential impacts, and consider whether or not the Legislature wishes to ratify them. In this case, we received them the agreements Saturday afternoon, which was about a week after we understand the Administration reached those tentative agreements. So, again, just really a constrained time period for the Legislature to understand these agreements.

And their cumulative effect is to increase state costs by about $2 billion. So in the context of the budget, that's a very large budget change proposal, essentially, that the Legislature has given and the Budget Committee has just given a few minutes, a few days to review and understand. But I will turn it over to my colleague, Mr. Schroeder, for maybe some more specific comments about the compensation studies and other issues.

Good morning. Nick Schroeder with the LAO. Some of the issues that we raised specifically about the compensation studies, specifically, it's related to kind of two points. One is that the agreements provide a lot of special salary adjustments, more than is typical for MoUs. And some of the classifications that would receive these special salary adjustments were not included in the compensation studies or were part of occupations that were found to be compensated above market.

And so for those classifications, we think that there ought to be justification for the pay increases, but the Administration does not give any justification other than it is the product of negotiations at the bargaining table. The second point about compensation studies is related specifically to Unit Six. CalHR used a methodology that was developed at the bargaining table, negotiated between CCPOA and the state to develop its compensation study. And as we indicate in our analysis, the compensation study's methodology is quite flawed.

It relies on county governments as the comparators who are not representative of where Unit Six Members actually work. In fact, two of the six counties included in the compensation study have no Unit Six Members who actually work there. In addition, the six counties that were included are among the highest cost of living counties of the state with high median housing prices, whereas where more than a majority of Unit Six Members actually work are rural counties with lower costs of living.

So we don't feel that the Unit Six Compensation study is a representative sample of employers that we can use as a comparison. And also the elements of compensation that are included in the compensation study are not representative of what are large elements of the Unit Six Compensation. In particular, it omits overtime, which is a very large component of Unit Six Compensation.

And then also we have some raised some issues just with how they quantify specific elements of compensation like pensions and other retirement benefits that we think were not done correctly. So in total, we think that the Legislature should not rely on the Unit Six compensation study to assess whether current compensation levels for Unit Six are appropriate or not. Yeah.

They just presented their opinion on this and I was hoping they might have.

So I will continue to allow Senator Niello to have the floor for the questions and I will start a list given. But let me apologize, I was not here. Stuck in the elevator for a little bit, unfortunately, but that was okay. It finally moved. That was a kind of weird experience, but whatever. But I just want to make sure from the Department of Finance you have now presented all that you need to present on all of the things before us.

Yes, Madam Chair, I have.

Okay, great. So I will allow Senator Niello continue and I will take a look.

You're putting together a list?

Yes, I am now.

Okay.

Go ahead.

Perhaps the LAO may have comments on other bills too. But with regard to a few questions that I had specifically regarding the significant increase to fees charged to providers by the Department of Health Care Services. If I understand correctly, the original requirements came out of a 2014 legislation and since that, there have been significant increases in requirements that the Department of Healthcare Services is responsible for overseeing providers.

And since then, no, they have had significant increase in staffing and responsibility because of it, but no increase in fees. And if I understand one time the General Fund backfilled. But my question has to do going back to the beginning with all of the additional requirements and it significantly increasing fees. And then on top of that, allowing the Department of Healthcare Services to unilaterally without legislative approval, increase the fees by 5% each year, which I find troubling in and of itself.

Has there been any thought to go back and revisit the increased responsibilities to see if they're really necessary and therefore perhaps not impose the significant increase in fees on providers?

Sonal Patel with the Department of Finance. So, in terms of the costs of program costs to administer the program, the program itself is required to be fully funded by fees assessed upon residential and outpatients providers. And for several years the Department has not received enough revenue to support these programmatic costs. So in order to meet the program cost needs, there was a request as part of the governor's budget to increase fees. And this is the proposal where it was landed.

So those 5% increases will suffice to cover sort of the cost of doing business as it increases every year, costs for salaries and wages as those increase over time. So this will basically allow this program to be supported without going into any deficit.

Perhaps I didn't explain myself well enough, I understand that. But the reason for this is because of additional requirements that have been added since initial enactment in 2014, creating a need for increased personnel in the Department to oversee the providers. And has there been any thought to go back and revisit the additional requirements? I think it's 14 additional requirements since the initial legislation in 2014 so as to reduce the burden on the Department and therefore reduce the need to increase fees.

So there is existing statute that I think incorporates what you're suggesting, Mr. Vice Chair. And I think as the Department is assessing these fees, again, it is up to 5% and it creates the flexibility. So one, it takes into account for example, if they do overcollect on fees, they do need to incorporate that into their fee increase. And two, it is not a flat 5% every year.

It is an up to to give the Department that space to really assess what are the costs of the running the program. To your point, sir. And then also to take into account are there areas where costs might be less than the 5% fee increase needed? So it's really just the flexibility to increase should programmatic need require as such.

But if there are years in which they don't have that increased need because they've done an assessment or costs are not increasing up to 5%, it does include that flexibility. So it is really a ceiling here with anything above that would require legislative approval.

Definitely would. And I would suggest that perhaps we ought to revisit those issues to see if they are totally necessary. I realize it's a legislative issue, but I was wondering if you had an opinion on that. Similarly, the unilateral authority given to the Attorney General in one of the other bills recognizes the fact that the existing fee with regard to the ammunition issue is not covering their costs of oversight.

And perhaps we ought to talk a little bit more about cost control rather than just allowing the AG to increase the fee on their own, which again, I find troubling. With regard to the community college and University of California housing issues, the state had provided funding to community colleges for housing needs, which they typically have not done in the past. And I think that was a good thing then. I wasn't here when that was authorized, but nor when the clawback was authorized.

But essentially, we're taking the money back from the community colleges. And in return for that, number one with regard to three of them having a joint project between three UCs and three community colleges for housing needs, which makes it up for those three community colleges, but for the rest of them, it's an intent to provide a statewide program of lease revenue bonds for community colleges to use that tool to finance housing. First of all, they would have to borrow the money and then pay it back.

So it would be different than the state having granted them the funds in the first place. Which doesn't seem like a totally fair exchange, but maybe I'm missing something.

Yes, and thank you for that question. A lot of different actions went into that. As you stated, when the state was more flush with one time spending, we did provide dollars for construction for both all segments, the UC, CSU, and the community colleges. And as you recall, we were attempting to bridge the gap between an over $30 billion fiscal deficit in the current year. And part of that solution was to take those one time funds and to swap them with borrowing.

And so in the case of those three community college projects, UC will be providing UC lease revenue bonds. Or sorry, the UC will be bonding for that. And the intent that's included in this budget package is to really look at ways that we can seek a statewide lease revenue bond to pay for those other funds. And it really is the balance between trying to fulfill these priority projects and get them done and not keep them, not stall them.

There's also, I would state budget Bill language which authorizes finance to increase funds to particular projects so that particular action doesn't happen. So projects may proceed in the current year. And so because of the status of the General Fund, that was a solution as part of the 2023 budget package to take projects that would be cash funded and switch them to other funds borrowing.

If I understand the write up that I saw, the funds that are clawed back from the community colleges, this Bill clarifies when it has to be repaid, but that that money is being reallocated to the UC institutions for housing needs. Or did I misunderstand that I would.

Have to turn to my colleague who I believe is on the line, Chris Ferguson, to ask for or to give you some more specific details on that.

Yeah, Chris Ferguson with the Department of Finance. So the funding that's being shifted between the UC budget and the CCC budget was designed to support the ongoing cost of those projects. So we're just shifting in one hand, we're shifting three of the projects over to UC. UC would issue the bonds to support the projects and the funds we would be providing to UC would continue to support those projects.

And then the second component would be that originally the state had envisioned using local, having locals issue revenue bonds to support the projects. And now what this trailer Bill would do is instead of locals issuing, it would state intent for the state to seek a statewide solution.

So the funds that are being repaid by the community colleges that had been allocated in a previous budget year is going strictly back to the General Fund to cover existing deficits.

Yeah. So there's really two components. One of the components in the budget was designed to provide ongoing support so that the projects could continue under a revenue bond structure. What we are asking districts to do in terms of returning funding, it was the actual allocations that would be instead financed that would have instead been financed with revenue bonds, which we're now saying intent is for the state to issue a statewide lease revenue bond.

Madam Chair.

Senator Laird, do you have.

I'm the chair of the Subcommittee and I think some of this discussion has been around the issue and not hitting at it directly at some of the questions. And I am prepared to explain this clearly and that's why I got in line early. And just for Senator Niello's satisfaction, it is in a good place. I met with one of your community college presidents right before this hearing and whenever I can get a chance, I will explain it clearly. Okay.

And I appreciate that. I probably need some explanation. One more question on this. With regard to lease revenue bonds, who would the lessee be?

I would just reiterate what my colleague Mr. Ferguson said that it is a move from locals bonding to the intent is that the state would provide that funding. So we will be working towards some solutions in the governor's budget to deal with this. But the intent is that the state would now be versus locals providing that support to colleges.

Well, the point of lease revenue bonds is that there is a lessee who is separate from the payer of the debt. And I don't see how there's a separation there. But perhaps that's a discussion for a different time because we've used misused lease revenue bonds I find continually since I left here. But as I said, perhaps that is a discussion for another time and in a different context. I'll leave that as my questions at this point.

Okay, so I do have a list and I realize these, obviously I'm making a list based on Members indicating they want to ask questions, and obviously when you're on one discussion, a lot of people want to have that. So I know it's awkward because you may want to sorry, you a Member here may want to revisit this very discussion. But fortunately we do have, I do have Mr. Laird, Senator Laird as next on the list. So he can do that clarification.

But let me let you all know now who I have on the list and the order. Okay, so I have Senator Laird followed by Senator Roth, followed by Senator Durazo, followed by Senator Cuevas, followed by Senator McGuire, followed by Senator Menjivar. Okay. And then I will have Senator Seyarto all right. Okay. And Senator Min and Padilla. Great. So, Senator Laird.

Thank you very much. Madam. Chair. And I'm going to try to as briefly as possible put clarity to the issue that was raised by Senator Neillo. And what happened was over two years we appropriated three and a half billion dollars for higher education housing in three segments. In various iterations of the Governor's proposed budget, he wanted to eliminate that.

The solution to not do that after we pushed back strongly was to go ahead with what was there and do it with bonds so that the cost of the budget was only one year of the bond interest payment, as opposed to the entire cost of the hundreds of billions of dollars for the housing projects.

And the difference in response to your question is that they originally just wanted to save money from the prior authorization of three and a half billion by cutting it back 750,000,000 or 1 billion. And instead 750 or 1 billion of projects is funded. It is just funded with a one year payment of interest that was I think 33 million for one segment. So it really lowered it. And the budget experienced the savings because of the change in financing.

But it was an obligation over a number of years and then there was significant pushback for the way that was structured. In many ways community colleges were very unhappy because they felt that the least burden was shifting to them. What this budget item does is fix the whole thing.

And the way it fixes it is the 2022 projects approved can just go ahead and included originally was a clawback that you referenced of some of that 20-22 money that has been put out in the future. That's no longer operative the way that it was in the previous budget. And you referenced. And one of the primary places that that was true was Sierra College, which I suspect overlaps with your district.

And they sort of have bids locked in and then the money was going to be clawed back and it put them in this completely untenable position. So now the clawback has moved ahead and they're allowed to proceed and they will proceed and they'll try to hold the bond costs. So it does the 2022 projects great.

The 2023 projects in the budget were sort of threatened and now the language allows them to move ahead while a year from now and I'll get to it in a second, the financing mechanism still has to be determined. The 2023 projects get to move ahead. And then there were three projects that were intersegmental generally between UC and community colleges and there was this whole mess where they had to qualify in each pot and in one case they didn't.

Now this resolves that all three of them can move ahead and UC will do the bonding for those projects and just do a JPA with the community college or the other interest to resolve that. And so it resolves all the outstanding issues except for one. It allows everything to move ahead but they still have to decide what the precise bonding mechanism is for those that will be bonds. And this language says that that has to be decided by the time the budget is approved next year.

So it gives eight months to do that. And what I was going to do before you raised it is to just restate all those solutions and ask the Finance Department when they contemplate presenting that solution because even though they're given till June 30 or whatever later or however the wording is, the question is in the ideal world they would resolve it with a proposal in early budget actions in January or resolve it in how they present the budget next year, even though all the colleges can move ahead. It would just be good that there'd be some certainty and everybody relax because of this.

And I think the key thing gets to one of your points is the real desire here was not to shift the risk to community colleges in the bonding that they were originally, they submitted their applications based on what the actual cost of the program was. And some of them felt like if any of the bonding costs devolved to them, it didn't pencil out the same way that they were granted the money and it might not allow the projects to go ahead. That appears to be resolved.

It's okay. Let's have yes.

Question of finance. Yes.

But have them answer your other question, which is when can we look forward to having you bring back the solution?

Sure, I'll turn that question to Mr. Ferguson. But I just wanted to highlight that the Administration never proposed a cut. It was more a shifting of the financing structure. So I think that's just important. It's a priority for this Administration to build those units. So I'll turn to Mr. Ferguson for a response on the potential timing of that.

Yeah, so we don't have a specific timeline to note today, but the structure was designed so that as quickly as we can pull this together that we would return to the Legislature with a date certain of no later than the 24 Budget Act.

Then, Madam Chair, I would just make the comment that I think it would be the preference of anybody that is involved in this issue that they do this sooner rather than later, and that it show up early in the process. And I appreciate the nuance that I'll try to be polite that only finance can understand that having a billion dollars not be in the budget that was in it before is not a cut, but it is widely perceived as a cut, even though it has shifted.

And then one last thing. I was going to make a comment about a second item. I'll just make it under AB 143. There's the bagley. Keen act. And I would just call everybody's attention to we were in the middle of a conundrum where, as the Legislature, we're considering bills about whether we want to continue. Parts of the Executive orders from the Pandemic on Bagley Keane and some of them expired on June 30 and all these bills wouldn't go into effect until January 1.

So even though it's still in front of the Legislature whether we want to do that and what they are, this resolves that issue and continues the Bagley Keen things till January 1 to allow the Legislature to have that discussion and decide on a policy level whether they wish to continue. Thank you, Madam Chair. I appreciate you.

You're quite welcome, Senator Laird. So now I will go to Senator Roth and Senators Menjivar, Seyarto, Min, and Padilla. Rather, Menjivar, Padilla, Min, and Seyarto. I do have you on the list.

Okay.

Thank you, Madam Chair. I just wanted to offer a comment on the MoU and the LAO's discussion about the pay comparability study and flaws or apparent flaws or perceived flaws in the study. I've been here a while and in this Administration and the previous Administration I've observed the use of studies that appear to have deficiencies to support proposals and propositions.

There was the family leave conversation about the impact on employers and there was a study utilized there that I identified some deficiencies in and spoke about in our committee conversations. In the committee that I'm privileged to currently chair. We see studies used to support fee increases and some of those have had deficiencies in them.

And of course, pay comparability on MoUs and others, those of us who have had experiences prior to this where we hire experts and have studies done we know that when you hire an expert to perform a study often you get the study that you pay for. And in this process that we go through here, particularly in the areas of MoUs we sort of rely on the Administration and those who submit proposals to us on ensuring that the backup for the proposals is accurate.

And I think that integrity has a role, a significant role in this process and that it's a fairly important concept. So I just wonder if moving forward, and probably long after I leave here, if there's not a way that we can figure out how to establish a process to conduct studies where the studies are done in a more objective way so that we don't have this continued conversation about deficiencies in the studies that are presented to us as a backup for the proposals that are offered.

And that's just my comment. We're going to have to figure this out. Obviously, I support public safety pay increases, certainly where appropriate. But it would be nice to have confidence in the material that's presented to us to support those increases particularly in light of some of the criticism that some of us are receiving in the newspaper as legislators in this particular area. So. Thank you, Madam Chair.

Certainly. Senator, I don't think you were asking necessarily for a response.

No response necessary. That was rhetorical. I appreciate it.

I did want to clarify. I wasn't in the room when the discussion about the LAO's analysis. But on the first we are having our hearing today but these bills will not be before the floor until next week and we will have the LAO's analysis on the other MoU before that vote. So we will have that so before it goes to us on the floor. So I just wanted to clarify. Okay. And now I will call on Senator Durazo.

Okay. Thank you, Madam Chair. I have some questions about one of the items in AB 143 and this is the goat herders? I have some questions. What is, somebody, what is the minimum wage today for workers in California?

The minimum wage in California for all workers, with regard to some exceptions, is $15.50 an hour.

Are there any other workers in California where we have codified the hourly wage for $3.79 an hour?

Not that I'm aware of.

Are there any workers in California whose wages have been reduced from $15.50 to $3.75 an hour?

Again, not that I'm aware of.

Then can you tell me why we are being asked to reduce wages in California for this group of workers to $3.79 an hour?

So the proposal before you extends the current alternative monthly minimum wage for goat herders that was established last year in AB 156, which was, again a budget trailer Bill. Originally, the sheep herder alternative monthly minimum wage was established in 2001 by the Industrial Welfare Commission, and then it was codified later in 2001. Prior to 2001, there was no minimum wage for sheep herders.

And then it was last year, as we discussed last year through the budget process, there was an administrative decision that goat herders were not subject to the same alternative monthly minimum wage as sheep herders, which subsequently led to the budget trailer Bill that extended the sheep herder monthly minimum wage to goat herders. So this proposal would extend the current monthly minimum wage for goat herders by two and a half years to July 1, 2026.

It would also require the Department of Industrial Relations and the Employment Development Department to do a study to inform future policy discussions about what this should look like. And that study would be due January 1, 2024 or 2026 sorry. Which would inform a six month sort of window for us to examine the situation.

So you don't have any other information or explanation as to why this particular group of workers should be getting $3.79 an hour as a minimum wage?

Again, this is just an extension of existing law extending the current alternative monthly minimum wage that is subject to goat herders, established by 156 last year, extending it for two and a half years, and it's the same alternative monthly minimum wage that sheep herders receive.

Okay, that doesn't really answer my question. The other question I have is how much did we budget for this study or report in this proposal?

We have 1 million set aside in special funds for GIR and EDD to complete this report. And, Senator Durazo, I would just add that in the interim, this two years prior to the reporting and then the subsequent six months, we do want to look at the current state of affairs and consult with stakeholders, as well as to assess the necessity of the alternative the monthly minimum wage. So just to your point, I think that the time is needed to really look, to see what impacts and to speak with stakeholders so that it can inform future decisions.

Okay, but we haven't done this with any other group of workers in California.

When the initial alternative monthly minimum wage was established by the Industrial Welfare Commission. There was a pretty robust stakeholder process and report that led to the alternative monthly minimum wage. And that was a process that the herding industry was involved with.

Okay, it's interesting you say that, because I chair the Budget Sub Five, which oversees labor and the agencies, and this never came up as an issue. So I don't know where the robust discussion took place, but it certainly didn't take place in my committee. I guess, a million dollars to go into a study where we've had study and robust discussion and whatever you're calling it. We're putting money into another or a report which seems to me ought to be going into actually increasing the wages just to get away, move on beyond questions. We're being asked to vote for $3.79 an hour wage for agriculture workers.

The wage order makes it really clear that that's what they would be getting. And we are reducing minimum wage from 15.50 to 3.79. And before we even discuss overtime pay, we should be clear on what the base rate for these workers would be. We need to understand that why is there a reduction of the minimum wage for these workers? We always say our budget is a reflection of our values.

And there's no doubt in my mind that a vote in support of AB 143 is a vote that support wages of 3.79 an hour. I mean, it's really clear right here in front of me, 3.79 regular rate starting in 2023. We have time to fix it, especially now that we've heard the announcement that we're not going to be voting on it until next week. And I, in good conscience, cannot support this Bill because of what it clearly sets out to do. Thank you, Madam Chair.

Thank you, Senator Durazo. Let me ask now, Senator Smallwood-Cuevas.

Thank you, Madam Chair. So my question is about bargaining unit Six. Just last week, there was a hearing that the Women's Caucus helped to host digging into the sexual assault of women held in our state prison.

I am really concerned that as we're thinking about $5,000 in cash bonuses and I'm not sure and I'll save that for a second question in one instance, in that hearing, we learned about and had conversations with state prison leadership that there was one officer who assaulted 10% of the women who were held in that state prison. One officer.

And we know that that kind of assault doesn't happen alone, and certainly that one officer is facing steep charges, but it speaks to a deeper problem in this particular sector. And so my question is, while I understand and recognize how we have a need to recruit and fill vacancies for a number of positions here at the state, why would this particular unit receive a $5,000 cash bonus?

And I want to be clear that there is some way to determine if these particular individuals who are eligible for this bonus have in any way been involved in any kind of disciplinary issues on their work site. I think we understand the need for good jobs, but we don't want to reward bad.

So I want to make sure that we are ensuring that anyone being accused, investigated, connected to any sort of lawlessness related to our prison system, and particularly those who are in the charge of these particular bargaining unit members, that we ensure that they would not be eligible or rewarded in any way. Can you explain what are the parameters around the bonuses?

Yeah, I can't speak to the particular investigations. I would say that CDCR and the Administration take seriously those investigations. And in regards to the broader bargaining package, as we are sitting as the state bargaining, they are bargaining on behalf of their entire union.

And as you stated, the state is interested in recruiting and retaining a good workforce. Some of the issues that you bring up are not discussed at the bargaining table, but are in fact part of the management and the investigation from the Department side. And again, I can't speak to that or the parameters around who is qualified.

I would just say that, again, the Administration takes those allegations and investigations very seriously and I would have to defer to the Department on the particular processes if they're even able to discuss them as they're investigating. But at this point, I would say that, again, the broader discussions at the bargaining table are for the entire unit and not for particular individuals. But you said that there will be details that will sort of determine how these bonuses will be. I'll turn to my colleague for the specific parameters about perhaps the positions and the particular $5,000 bonus that you're speaking to.

Aston Tenefoss, Department of Finance. The $5,000 bonus you're referring to I believe is one time retention differential that's up to $10,000, which is 5000 per year. Is that correct? It's for specific locations and the employees there, while included in the specifics, are included in the MoU itself. And I don't have them right in front of me.

But I would say that while the Administration considers different variables for why these institutions may have a hard time filling positions, they may include location, number of incidents or type of institution like the level of security, and that is something that is taken into account with the state's interest and also the bargaining unit's interest.

No, I appreciate that response. It doesn't answer the question. Would like to get information on ensuring that any of those officers involved in investigation found to be in any way implicated in these kinds of assaults and lawlessness, that they would not be eligible for the $10,000 bonus. And we will follow up with you with that. Thank you.

My next question, just following up on my colleagues comments about AB 143. I had the unfortunate experience of talking with some young workers who are explaining that they are now instead of buying a dozen of eggs, they're buying individual eggs, because the carton of eggs at the corner store is 10.99 with tax.

And when we talk about these agricultural workers, many of them immigrant, Peruvian, very, very low income, we can't wait for a study to determine whether 3.79 an hour is adequate. We know 3.79 an hour is not adequate.

My question is our state minimum wage is a wage that we all supported. It is codified. Why does it not pertain to these workers directly? I'm not sure why there needs to be a study to determine what the minimum wage that we have, as the state of California agreed to, not apply to these workers, particularly in, you know, an inflationary period. We're still raising interest rates at the federal level. We still see a looming recession. And we know that at any moment, as we move toward that precipice, these are going to be the workers who are most impacted, the very low income.

Yes. So the current alternative monthly minimum wage for sheep herders was established in 2001. It's risen every year or when the minimum wage is increased by a like percentage, leading to, as Senator Durazo noted, 3.79 a year for a month or an hour for 2023. This proposal would extend that current law.

The sheep herders are already subject to the alternative monthly minimum wage. Up until last year, it was assumed that goat herders were also subject to the same alternative monthly minimum wage. AB 156 extended that alternative monthly minimum wage in statute to goat herders.

So the sheep herders and goat herders received the same alternative monthly minimum wage under AB 156. Come January 1, 2024, that alternative monthly minimum wage would no longer apply to goat herders. However, sheep herders would continue with the alternative monthly minimum wage.

So this report that we're asking for would look at both sheep herders and goat herders alternative monthly minimum wage. See the necessity of it if there needs to be a differentiation between urban and rural, because in some urban areas, they may be able to work hourly wages. Also being able to see whether alternative monthly minimum wage is being abused in some of these urban areas where workers are working hourly. So that's what we're hoping to gather out of the study in the two year study and being able to reach some of these workers who are in more remote areas.

So I guess my concern is that there's not, like, a goat herder food or grocery store. There's not a goat herder medical facility or a sheep herder. Those workers have to live in the economy that we're all living in. Being on budget committee, the hardest part for me is just how we're trying to deal with homelessness, how we're trying to deal with food subsidies, how we're trying to do there's nothing we can do to help a worker that is making 3.79 an hour. There is nothing.

So I guess the point I'm making is that we can when I just heard sheep and herd, I mean, it just seems like, wow, what a job. It seems so bucolic, you know, you're herding sheep, but they live in California's economy, which is anything but bucolic. Right. It's hard. And when folks are having to pick eggs out of a carton to buy them because they can't afford the carton, we don't have time to study for whether they should be paid more than 3.79 an hour. It's unfortunate, but this is the reality that we live in.

I want us to really look at how we can create a survival wage because basically, this is where we're at. We're not even at a minimal. We're at a survival wage. And that is not a human wage. So I just want to make sure that we stand by the minimum wages that we pay in California because it's not just a wage that's arbitrary. It's so that people can have a chance to live.

So with that, I would like to see how we maintain the human dignity of all workers, but particularly these workers, because 3.79 is undignified. So with that, I agree with my colleagues and I look forward to a change in a shortening of this reporting period and an implementation of a wage that workers can survive on.

I'm going to turn to Senator Roth because he has a clarifying question on this and then I'll go back to our list, which is McGuire and followed by Menjivar and then others.

Thank you, Madam Chair. Just a quick follow up to what my colleague was trying to get at. My notes indicate that in January of 2001 the state minimum wage DIR set was $6.25 an hour. There's a process to adjust the minimum wage. I don't remember when the Industrial Welfare Commission was defunded or whether it was back in play or who did what in 2001.

Although I did practice in this area, I just have been up here so long, my brain is atrophied. Somebody, though, can tell us why whoever did it, DiIR or someone else, adjusted the minimum wage for this group of employees to 3.79 an hour as opposed to $6.25 an hour. And I'm wondering if you can enlighten us.

Yes. So prior to 2001, there was no minimum wage for sheep herders or goat herders. They're exempt from the federal minimum wage. They were also exempt from state minimum wage.

So there was no wage order that covered them.

Yes. And in 2001, the Industrial Welfare Commission established the alternative monthly minimum wage for sheep herders.

There must have been a hearing. There were wage boards in those days. There were transcripts and there was a statement for the basis for the decision. Can you tell enlighten my colleagues to my right as to what the basis for the decision was to make it $3.79 an hour as opposed to 6.25?

I don't have all of the history in front of me but the initial alternative monthly minimum wage, that's been adjusted whenever the minimum wage the state minimum wage has increased. The alternative monthly minimum wage has been increased by, like, percent. But the Industrial Welfare Commission process was a robust process with stakeholders and employers represented, and that's what led to the alternative monthly minimum wage back in 2001, although that was 20--

So then, just to follow up, since you all probably have access to the transcripts and the material that we don't, since I threw out all my transcripts, maybe someone can get back to my colleagues as to what the statement of the basis said and what the basis for the adjustment was.

And then my last question with the patients in my chair is how does this relate? I thought we reestablished the IWC and wage boards. And how does this issue relate to that?

Yes, that's correct. The 2023 budget did sort of refund the IWC, and the IWC did set the original alternative monthly minimum wage. However, the time that it would take for the Industrial Welfare Commission to conduct its wage order is unknown, given that we're just restarting it.

Additionally, the current alternative monthly minimum wage under current statute would sunset in January 1, 2024, which would immediately subject the goat herding industry to the current state minimum wage, which would result in goat herders making around $190,000 a year.

Is it the administration's contemplation that this sheep herder issue, goat herder issue will be a subject of analysis and review and decision by the IWC?

We don't have any commitment or comment on that right now.

Okay. Well, thank you, Madam Chair. I'm--Roth out. Thanks.

Thank you. No pressure. So I just want to clarify for the sake of getting this conversation back on track and we'll move on. We're talking about an alternative monthly minimum wage. Now, you can break that down. Hourly. What? Not hourly. The wage is go ahead.

So I'm going to allow Senator Newman to ask a question on this, as long as it's a brief question, and then I will go to my list and please, Senator Newman.

Alternative monthly minimum wage, this is my--

3.79 is established by dividing that minimum monthly wage by the total number of hours in a month.

And to be clear, you pay by the month to these workers. And again, I don't have a position. I think it's an important question about what they're owed. But they're not paid by the hour. Right? That's an alternative monthly minimum wage. You can do the calculation, but fact is, they're paid 24 hours a day because they're in remote locations.

So this is not a case where a worker is receiving, on an hourly basis, 3.79. This is their effective hourly wage, right? Because they're paid for the whole month, and that includes all of the time they're on the job to include sleeping, eating, et cetera, because they are a separate category of workers. Is that correct?

And I think that's important to note for the purposes of this discussion. We should have a discussion about what the appropriate alternative monthly minimum wage is. But to reduce it to an hourly wage is a bit misleading. What?

That's correct.

I said, that's not accurate. We make a decision that categories of workers, we're going to tolerate a monthly pay, but basically everybody is paid hourly. You may be exempt from overtime. It's an overtime issue. We make a decision whether that month--

Again, I don't have a position, but that's the basis for the exemption, correct? That these are effectively monthly workers.

All right, we're going to go back to the list. Clearly, there's perhaps back to truly budget issues. All right, well, let's go back to the list. I have Senator McGuire. Senator Menjivar. Senator Padilla. Senator Min. Senator Seyarto. Senator Becker.

Thank you so much. Madam Chair, I'll be less than 60 seconds. And if it's all right with the committee on this issue, I'm just going to focus on the student housing. I want to say thank you to the chair, Chair Skinner, and to the subchair, Chair Laird, for their work on this.

It has been of deep concern, especially for community colleges in our neck of the woods, who literally opened up their housing two weeks ago, 10 million was allocated by the state. And that potential clawback would have thrown them for an absolute loop since they counted on those funds to be able to actually open up the doors. And it's one of the first community college student housing developments that have now been open under this program.

So that additional grace period, if you will, to try to figure out that longer term solution is greatly appreciated and ensuring that that clawback is not in advance. Really appreciate everyone who's worked on that to keep each of those community college districts whole. Thank you.

Great. Thank you, Senator McGuire. So now, Senator Menjivar.

I will be longer than 60 seconds. Not a worry. You obviously wouldn't be the only one. Senator Anila, I think I agree with you on one of the first things ever this session. You're right. This conversation we're having shouldn't be on budget. The goat herder situation should be through policy. I don't think this is something we should be even voting on here. I want to line my comments to Senator Durazo and Senator Smallwood-Cuevas on this issue.

We look at individuals, even if we do the calculations for a monthly salary and so forth, even in those categories, we're always elevating their salary because we know, we recognize they're going to be working 24 hours like our firefighters, twelve hour shifts, like our healthcare workers and so forth. So leave it at that. I agree with them there. On Unit Six, we heard from LAO this flawed, skewed methodology to get the numbers that we wanted.

And you mentioned that it's to incentivize these workers to get into these roles. But in fact, it shows that we're pushing away candidates from being trained because there is an excessive amount of interest. We're seeing that the vacancy rate of these employees has actually decreased from the last report that came out. So it's not needed to further incentivize since people already want to be in these role.

In fact, compared to AFSMCE's Unit 19, where social workers were only giving an approximate mere 3% increase compared to what we're doing for our CDCR individuals, to me, it makes no sense. If we're struggling to find more mental health therapists compared to this other role, why wouldn't we further invest in a category that I've repeated over and over again? We're asking to be in every single corner like a 7-11 and related to Unit 19 MoU.

One of my questions there is why social workers had approximately only 3% increase versus school psychologists that saw an approximate 10% increase rates. I'm a little concerned with that then, since they do similar work. Education is different, but I think the disproportionate increases in each one of them is a little concerning. That's my first question. See if there's any clarifying information as to why there's that big of a gap in increases for these two categories.

I'll have to get back to you with specific details.

Sir, I don't know if you had a little bit more. Okay, you'll get back to me on that one. In regards to AB SB 138 and the complex needs residential program. I chair sub three. So this was the conversation that was had in my sub. I just want to share with you, like going back and forth with the Department of Administration on this.

We were very clear I made it very clear that we were looking to step away from just the outdated forms that was used for treatment. And we thought we had agreed on a plan. I'm happy with the language now, but I do want to share with my colleagues that in between that, they came back to us and said, we want to restrain our patients because that's part of treatment.

Conversations that weren't included in Sub Three that were actually trying to happen behind our backs, it's very upsetting. I want to thank my team, the consultants, for fighting for this. But I do want to share some disappointment that in Sub Three, we agreed on something and something was trying to be changed even past that. I'm happy that we put language here that says specifically that emergency, that restraints are only going to be used in emergency. But they were trying to include this as part of treatment.

We've heard the horror stories of individuals with complex needs being isolated, being restrained at endless amount of hours. I'm glad we were able to push back, but I did want to make note to our colleagues that they were trying to squeeze that in there as language. Don't know if you wanted to respond to that. Sure. Thank you. Kia, Department of Finance. I think I just want to clarify that we weren't trying to squeeze something and pull a fast one.

I think there was something that through discussion at the Department with their program folks, that it was something that we had proposed with alleged consultants for discussion, not something that we were trying to just squeeze in without having that conversation with you guys. But I think we heard your concerns and we've pulled that language back. But I think, just to be clear, for an intermediate care facility, those are treatments that are included.

But I think we've come to an agreement to include prohibitions on the use of restraints in the language. So that's clear. And so just again, we weren't trying to just sneak something in. I think we were open to the discussion, and we put it forward, and we had the discussion, and we landed where we are today. I'll stay strong in my statement on that issue. Do you want to say something on that?

I did. You said that restraints were part of treatment. Restraints are never part of treatment. Restraints are a tool for providers to be able to take care of a problem. They are never part of a treatment plan. There is no treatment plan that says that we will restrain this person for the betterment of their care. It is a tool that is used in facilities sometimes when people have been unable to use any other kinds of tools. But I just want to make clear it is not a treatment. It is an intervention.

Madam Chair, can I give a . . . fellow other sub three colleague here?

I just want to concur with the remarks madam Chair, and I just want to concur with the remarks from the budget sub three chair and somebody who's been a social worker for a long time, my colleague from Stockton, and being on budget sub three. I remember that specific committee hearing and the horrific stories that were told.

And I concur with my colleague from Stockton that it is restraints are never a part of treatment, and it can be used as a tool to keep people safe, but it doesn't need to be 24 hours a day, seven days a week. And the horrific stories that we heard about it needs to be used very rarely, if at all. And I agree again, it's not a part of treatment, and it should be under policy committee and not in a budget trailer bill.

Madam Chair, I just have one more question, so that's on that, and then I'd like to move over to AB SB 137. I'm looking for some clarifying language regarding the removal of some providers to work in the clinical care settings. In particular, if you can just clarify on the removal of marriage, family therapists being included, some assurance you can provide me in ensuring that they would still be able to work in these settings that this is. I guess I don't want to give you my just I would like to hear from you on what that's looking like and the need to remove them.

Sonal Patel, Department of Finance. Just to clarify, the intent of this language was to align with federal regulations in order to ensure that we don't jeopardize federal funding. The language itself does not prohibit marriage family therapists or any other providers from participating in the interdisciplinary teams so long as the required providers are on there. So that's what the language does. It seeks to just clarify so that we continue to be able to draw down federal dollars.

Perfect. That's what I heard. I just needed to get reassurance. So it's safe to say that whoever is the point person will be working with our marriage family therapists to provide even further assurance that they will continue to be able to work there. This is just the floor and not the ceiling.

That's the correct assessment. The Department will continue to work with stakeholders as they always have, to ensure that they understand that they are still able to participate and provide services in these facilities.

Thank you. Thank you so much.

Thank you. Let us continue. Senator Padilla, followed by Senator Min, followed by Senator Seyarto. And then I do have the others on the list, but I won't read them all. Go ahead.

Thank you very much, Madam Chair. And first and foremost, just returning to AB 143 and the conversation around goat herders. I would just state for the record that some of my initial questions were asked and answered by Senator Roth. And I just want to clarify, given the testimony from staff, it seems clear that some of the urgency around having this in a budget trailer with respect to timeframe and avoiding a sunsetting provision on earlier alternative monthly compensation for this classification of workers is really a minor fiscal impact issue.

I think somebody testified something that if we had the minimum standard that otherwise applies, there's an expiration in the exemption. We're talking about the potential, given the classification of work of a goat herder making 190K. There's a part of the social equity person in me that says, wow, wouldn't that be amazing, even symbolically, because there are a lot of other folks that do other sort of 24/7 jobs that certainly are very highly compensated.

And I'm not saying that to be absurd, but I'm disappointed, certainly, as the sub chair here, where this got sort of stuck at the last minute, that the X, you know, it it wouldn't be the first time that we would see substantive paths to policy remedies, or policy remedies themselves, be part of the framework of a trailer. I'm sure all my colleagues would realize that that's never happened before.

And I'm concerned that we didn't take the opportunity here to have content at least on a path to addressing the policy implications here, since we were looking at an IWC process that existed and then didn't existed. And maybe will exist again and it's been since 2001 to address the fundamentals here because we are a victim of our own monster. To be candid, Madam Chair and colleagues. We've created a conflict between economic pressures to not hire as many of these workers, seasonally or otherwise, to avoid costs.

We're now in a situation that the time frame was not used to make a resolution to this fundamental framework but rather just to extend we can avoiding the sunset so that our other minimum wage provisions wouldn't apply. And it just seems to me, frankly, like a missed opportunity.

Because the last thing we need to be signaling, intentionally or otherwise, at this particular moment in time, particularly in the coming days about farm workers and agricultural workers and seasonal workers, is something that anyone could misconstrue or interpret correctly or not. That these workers are undervalued, that they're not valued as others, and that this is an exploitive construct that we've created, potentially, and one that doesn't make sense, to be candid, in some respects. So I'm just disappointed that we ended up here, to be honest.

And I'm disappointed it remains in the trailer. It's sort of surprising. Even in the conversations in June there was some suggestion there might be some substantive path that's part of the package that would address this that at least reassure folks we were going to address the fundamental policy question here at some point and that opportunity was missed. And I just wanted to put that in the record. Thank you, Madam Chair.

Thank you, Senator Padilla, Senator Min.

Thank you very much. I appreciate that. I just want to echo some of the concerns raised by my colleagues about some of the different aspects of this. And I realize a budget is a huge document. These are particularized items but I think they're important to emphasize.

I guess my question gets a little bit more process and I was concerned by the comments raised by LAO that with respect to the MoUs that these had been negotiated and agreed upon a full week before they were released to our side. And it does feel like we're getting jammed. These are complicated documents and agreements. There were a lot of questions raised in this LAO analysis.

And I guess my first question is really just why the delay? Why not get this to us earlier so we'd have more time to flesh out what seemed to be like some meaningful concerns?

Thank you for that question. I would say on behalf of the Department of CalHR that once an agreement is made at the table it takes days to go through basically all the costings and all of the language to get those MoUs together. And so part of that was the workload, nothing more. And a lot of it is the timing and the conversations that happen at the table do take time sometimes, as we all know, weeks, months. And so coming down to the end of the wire.

I think there are a lot of things that are left for completion and so a lot of it is just happening at the table. And then once that agreement does happen, it does take several days before CalHR is able to produce those documents.

But we are being asked to vote on this particular set of MoUs, whether to fund them or know. At the end of the day, we're a co equal partner, I guess. Question is, why not at least give a heads up to our side so they have time to flesh this out? I mean, I see concerns raised, but I understand the LAO doesn't have time to fully flesh these out. You've got a lot of different types of employees covered by this bargaining, these set of MoUs, some of which seem like perhaps they may not need the same types of increases, some of which may need bigger increases.

These concerns were raised by the LAO and I'm very concerned about I've been here almost three years now, and just to see this constant creating of fire drills where we don't get the information till the last minute and this is my third budget process. This is the third time I've seen this type of stuff happen.

And I'd love to hear the LAO's response, but I just think it would be very helpful for this body to be able to actually weigh in on a budget and a set of MoUs, which are going to have dramatic consequences on our overall fiscal health for the next few years, including our hiring of key employees without having to just shotgun it in the dark. Because we were kept in the dark for most of the process. But I'd love to hear LAO's response.

Carolyn Chu, Legislative Analyst Office. So as the senators are aware, the agreements before you expired on June 30. So to some extent, as my colleague Ms. Li mentioned, the delay in delivering the agreements reflects the fact that the bargaining did not occur until later in the calendar year. So there was some push later in the calendar year. Why the parties did not meet until later in the calendar year is not anything that we have insight into.

However, we have suggested to the Legislature to really set a policy to not consider agreements that come to them in such a late fashion. The expiration of the agreements is a known date. The CalHR is now on a routine cycle for conducting the compensation studies. Every unit will have a compensation study every two years. The legislative calendar is well known months in advance, so the parameters are there to facilitate the agreements to come forward in a timely fashion before the Legislature.

It's really on the bargaining units and the Administration to begin that process at a time that will allow them to reach an agreement in time for the legislature's timely consideration.

And just--I skimmed the LAO report, but if you could just reiterate what you see as some of the major concerns we should be looking at with these MoUs.

Sure. So, as you already mentioned the time and ensuring that the Legislature has the opportunity to engage in its deliberative process to consider such a large budget change proposal of about $2 billion by the time the second year of these agreements take effect. We also raised some issues with regard to compensation studies.

As an overarching comment, I would say that we really find that a sound methodology is critical, as some other Members have referenced, to ensure that comparable employees are being compared to the state's workforce so that competitive compensation can be offered. We have two more specific comments when it comes to compensation studies. The first is that ensuring that special salary adjustments so adjustments to particular classifications are either justified with that compensation study or other information from the Administration.

We were not provided any information from the Administration to justify the special salary adjustments that were provided that did not have any compensation study information associated with them. And then we have specific comments regarding the Unit Six compensation study, which has comparators that we do not find reflect the geographic distribution of correctional officers in the state.

We also would note on the Unit Six tentative agreement that there is a notable change in retirement benefits policy in which Unit Six would receive employer contributions to their two a 401K plan, a one time installment of, I think, $475, and then an ongoing 1% of base pay on an ongoing basis. And the state has not engaged in employer sponsored 401K contributions in the past.

There is one exception to this to excluded employees in the early 2000s, but this is a fundamental shift in the state's retirement policy, which, as you all know, has really been focused on contributions to CalPERS defined benefit plans.

Thank you.

All right, Senator Seyarto, followed by Senator Becker, followed by Senator Grove and Ochoa Bogh.

Thank you very much. And my two questions are going to be regarding AB 140 in the childcare section. And the first question is what was the impetus to change part time definition from 30 hours a week to 25 hours a week when everybody else it's a 40 hours a week definition, kind of along the lines of some of the other discussions we've been having. Why are they being treated differently in terms of what constitutes a full time employment?

Because that itself is what, $105,000,000 extra for the state in state costs for what, a year and a half. So can somebody enlighten me on that one?

Yes. Thank you for the question. Gabby Santoro, Department of Finance. I would just start for clarity. This change in part time definition is part of the agreement that the state had reached with CCPU and just would note to your question about the merit of the change. It's our understanding that reducing this definition can allow providers to more easily support and take on families who have needs in the order of these hours per week. So this is really an interest of allowing providers to better support families.

That's $105,000,000 in a year and a half.

Sorry, to clarify, the estimated annual cost of changing this definition is about 39.5 million.

This is 35 million for this year and 70 for next.

Correct. So the plan is to implement this change by the middle of this fiscal year, but the annual ongoing cost would be 39.5 million. Right.

Well, that doesn't clarify why we're doing that. It just clarifies what is going to happen and it's going to cost more and we're supposed to be able to help more people because we're going to go down to the next section here. The hold harmless reimbursement extension. What is the purpose of doing that?

Sure. So again, this is another element of the agreement that was reached between CCPU and the state. This is also, again, an interest of being able to allow providers to better support families. There are families who do have variable schedules and absent this flexibility, it makes it difficult for providers to be able to take on families with variable schedules. So we want to be able to minimize barriers for families with variable schedules to get access to care.

But what this is doing is it's reimbursing based on a contract amount, no matter how many kids you wind up having in your class or your care. So for the last two years we've been talking about the dire need to increase the amount of slots for kids. And this doesn't seem to be going in that direction. In fact, it disincentivizes that for the state contracted childcare workers because they don't have to have as many kids in there to get the reimbursement that they need or they would like.

Certainly. The Administration shares an interest with the Legislature to maximize and expand care. That's why we have our multi year plan to expand the number of subsidized childcare slots by 200,000 over a multi year period. Again, the intent is not to restrict it, but to make it easier for providers to provide access to care for families who have variable schedules.

But that number is not tied to the amount of slots. In other words, it's tied to the amount of slots, but it's not tied to the amount of kids in those slots. In other words, those slots can go empty. They're still getting paid for those. Where is the advantage for people who are struggling to get their kids into a daycare? And we have slots available, but there's no incentive for them to fill them because they're already getting paid for them.

I would say just sort of a broad comment. I think that, again, the field as well has a shared interest in providing access to care for children. So I think in terms of balancing any potential benefits or costs of this policy change, I think from the administration's perspective that overall it's expanding access to care.

Right? Well, I struggle to make that connection because this doesn't seem like it's incentivizing that at all. And in other words, this program, this part should probably come to a sunset because this was for COVID. This was for when preschools were trying to survive because no kids were coming into the class. That's what this was for. And that's not the case anymore.

We have a bunch of kids out there, a bunch of parents, especially in my district, we have parents all over the place trying to find places for their kids and they can't. And we're not incentivizing this. So that's a struggle I have with some of the preschool parts of this. I don't know how they think it's going to be helpful, but it's not helpful in the real world. Thank you very much for taking my questions. I appreciate it.

Thank you, Senator Sayarto. We will now go to Senator Becker, followed by Senator Grove, followed by Senator Ochoa Bogh. And I think I'm just alerting folks that obviously we want Members to ask their questions and to get their this is important. We are taking this vote today. We're not taking the vote on the floor till next week, but we're taking our votes in the committee today.

But I also want to alert that we do have public comments still, and I think for a variety of reasons, I've already been informed by various folks that they have obligations at noon that they are not able to whatever. So we'll have to end by noon. So just alerting. But anyway, Senator Becker, Grove, Ochoa Bogh.

Thank you. First, just a couple quick comments. I'm glad that we'll be doing the that we're moving forward on student housing. Just one thing I also brought up in our committee. Just make sure we're continuing to look at public private partnerships to Fund these. I was on the foundation board for 15 years at UC Merced, and we completed the 2020 project to double size the campus.

It was the 1.2 billion, the largest public private partnership in the country for social infrastructure, completed on time and on budget and considered a great success. So I want to make sure that we continue to look at those as we Fund going forward. 143 people have already mentioned it shouldn't take two years to do this study. In my mind, I don't know why it would take us two years to do that. Senator Min, I did want to bring up on the MoUs Senator Min brought up.

These are substantial MoUs. We're talking, I believe, in our budget briefing, I believe they said $4 billion actually increases. You said $2 billion. I'm not sure what it is over that period, but to be given so little time to review the MoUs is definitely of concern. And I just wanted to clarify on 151 in particular. I've always been very supportive of these workers. I mean, these are very difficult conditions and visit a number of prisons and seen the conditions that they're working on and the need. But I just want to clarify. You said on the said this is the first time we've contributed directly to a 401K.

Yes, we did ask this question to CalHR. Our understanding is that there was a period in the early 90s where excluded employees, some excluded employees did get temporary contributions from the state to 401K plans, but we are not aware of any collective bargaining agreements that included this type of provision in the past.

And so this is just to clarify, this is 501 time and then 1%. So if people make it on average 110K, this would be like $1,100 a year then contribution. Yeah, I mean, that is, as you say, this is a significant change to our policy. So I'm very concerned about the precedent.

I know no one here gets 401K contributions, but concerning the precedent, I can't help also notice that the dollar amount that that would change would make is basically about equal to what I'll be asking for in reducing the markup on prison canteen. Right now, we mark up prison canteen items an average 65%, some as high as 200%.

And just to reduce that markup down to 10% would save $26 million for families that are already struggling, often going into debt, to make sure loved ones have basic sanitary and health products like toothpaste. So a bit of a rhetorical question, but I assume the Administration will be supporting that measure if it gets to the governor's desk, because we're talking about really the same amount there just for that sort of small piece of this.

Senator Becker, could I just make a comment? Following up on the LAO's 401K contribution to savings. I think that how CalHR looks at this and how the Administration looks at this, is it's another compensation tool and it is something that does not create liability for the state, but is it a creative way to be considered at the table. So I just wanted to put that out there, understand your concerns, but it is something that we look at as another compensation tool, another tool in the toolkit, so to speak. Right?

And again, it's not for these workers particularly, but it's not a tool that we've used before, so it's a new tool that we're putting into the toolkit, which seems like it'll be used many times in the future if we put it in here. So those are my concerns. I'm going to continue to review. And as you said, as we said, we just got this very recently.

So I may support those today, but reserve the right to not support in the future as we go forward and as I get a chance to dive into this, because that's a significant change in our compensation policy, as you said. And that's really the main concern I have. Thank you.

Senator Grove.

Thank you, Madam Chair. I may have a couple of questions, but I just want to make some comments because my colleagues did ask questions. I do agree bargaining Unit six with my colleague from Los Angeles, where I sit on rules with her, that if somebody's on a PIP or a suspension program and I realize that's not under your purview, it would be under the bargaining unit's purview, I don't think those bonuses should go to those individuals.

I don't agree with the investigative state, because I think that once you have a full investigation, if someone's found guilty, then that's another story. But under investigation, there's a lot of false accusations as well. But I think if you're on a PIP or suspension, we should address the bonus thing. But I understand under the bargain unit Six, why they got the bonus program. And the reason why is because they were separate out of negotiation. It's only a two year term, should be longer.

They are contributing more to the retirement program. It's going to be an employer contribution as well as an individual contribution, correct me if I'm wrong. But that is also one of the categories, like firefighters, but instead of a season of firefighting, this is an everyday single job, and you can't leave. If your colleague that's supposed to replace you doesn't come in, you just can't leave the prison. You have to stay. It's a mandatory requirement that they can't abandon that post.

I don't know the exact term that they use, but I don't care what you got going on at home. I don't care what your plans were. If the people don't show up, you can't abandon your post at a prison. And so I think that was a creative way for the IOU, or the creative way for the negotiation to be able to compensate those people for doing the work that they do inside the prison system. So those are my comments on that.

I want to follow up on a little bit on the community college clawback. I don't agree with that. I mean, we addressed that issue last year and I believe this year in the June budget that we all were mortified that students were sleeping in their cars, that students didn't have a place to live, and now we're clawing back the money for affordable housing on campuses and around that area. So I have a problem with that.

When you go to Childcare and you address the childcare system just like the eggs that were brought up earlier, we passed legislation in this building or legislation was passed to increase the cost of eggs because of what they called humanity on chickens. And there's more square footage there's farmer jumps pulled out, all this stuff. You think we have a problem with eggs.

You wait to see what happens with pork in the next three to six months, it's going to be atrocious and the cost of pork products are going to go up exponentially in this state because of the legislation that was passed to protect pigs and giving them 24 square feet that you can't even manage as a farmer. It's policies that we pass that create the increased costs that our constituents are dealing with. The same with childcare.

You unionize childcare cost goes up three times and now you have poor families and even not poor families that are struggling to pay childcare. My daughter has an average everyday job with two kids and they pay $1,600 a month for childcare. It's absurd. It's over a house payment and then we use taxpayer dollars to subsidize it. But again, instead of addressing the root cause and providing more childcare providers, we try to put a band aid on things and it just increases the cost.

So I want to say that one other thing I wanted to say and if you wanted to reply or comment on it, that's fine. Is, oh, again, the student thing, which I already did, the student I was worried about the CCC and the community college clawback. So if you could address that issue. I mean, are we still going to focus on housing for students with this claw back? It's going to make them pay it back sooner. Do they have the resources to do that?

Madam Chair, Madam Chair, Senator Grove is asking about the question that we had a long discussion about earlier in the hearing and there is no clawback left and I would be happy to brief her off mic about how this works. That was resolved and we discussed it before you were here.

Thank you and I apologize for being late and missed that conversation. So I will get that information from the former chair of Natural Resources and I will conclude my remarks. Madam Chair. Thank you.

Certainly, Senator Grove, don't worry, we would not cut you off, but I think since it was resolved. But if there's another question on another item, you are free to ask. Okay, great. You're welcome. All right. So we'll now go to Senator Ochoa Bogh, followed by Senator Roth.

Thank you, Madam Chair. So I want to echo my colleagues comments with regards to my colleague from Bakersfield with regards to the cost of living in General in California and the wages, whether they're humane or inhumane. I completely agree with many of the concerns that my colleagues have addressed from LA.

But the bottom line is, and this is one of the things that I've observed these past two and a half years and I speak constantly just coming in from the outside is that our wages are not going to matter if we continue to pass policy that increases the cost of living.

And by that I mean policies that impact energy that eventually, as my colleague from Beaver has mentioned in the past just energy itself and how that impacts the production of food in the state of California or impacts the transportation or fabrication of materials to build homes in the state of California because that has a ripple effect into everything else.

And when we advocate for policies on minimum wage or any other wages for any other industry in the state of California, it's still not addressing the root of the problem, which is the fact that we're passing policy that increases the cost of living, of producing things, of everything that we consume in the state of California. So that continued. And so we have to start addressing, and I often say the root of the problem of the issues in the state of California.

Because even if we come with the intent of increasing the wages for people to accommodate the cost of living increases, guess who gets left behind? Those on fixed incomes, as here are the seniors, people that are entry level wage workers, people with disabilities. So here's everybody that has the ear of the advocacy groups where they get the lifeboats, get ready to get on the lifeboats. But we still leave several segments behind and it doesn't fix the problem.

And that's concerning to me because not everyone has advocacy groups and they hear many of the legislatures in order to address the issues that actually cost the state of California an increase in living. So I just wanted to put that on there and just plant a seed that we're looking at it the way wrong bit by bit. We're only addressing a Band Aid. We're not addressing the root all with good intents.

I've never questioned the intent of many of the policies that we pass, for whatever the reasons may be. Many of them are at goodwill. But the extent to which we're expecting a lot of these issues to be resolved in a short period of time and what they cost to implement, guess what? Whether we subsidize it through the government or through passing the Bill or the buck to the consumers.

We're not going to fix the issues at hand and so we're being just pigeonhole on how we fix the issues, but we have to look at it holistically from an umbrella higher look as to why we're in the pickle that we're in. Having said that, I would like to refer to AB 143 file item number eight and I do have some prepared comments on that.

While I support some of the provisions of the provisions in the General Government trailer Bill, and I don't support a couple, I think the fact that it includes conforming state law to federal law allowing military service Members and spouses to work under a professional license issued by another state while in California military orders is commendable. There are other concerns that I saw within this Bill.

But to the General point that said, I would like to just take a moment to talk about the single subject rule which can be found in California's Constitution that states, "A statute shall embrace but one subject which shall be expressed in its title. If a statute embraces a subject not expressed in its title, only the part not expressed is void.

In order to satisfy the single subject rule, items in a Bill must be reasonably germane to a common theme, purpose or subject and must not be excessively general in nature." While the Legislature has applied this rule liberally over the years, traditions, rules and process are important in the Senate, and I want Members of the public to be aware that bills with titles like General Government, which address a broad array of subjects, may not meet the single subject rule standard if challenged.

The reason I share that with you today is because one of the things that I appreciated my first two years was serving under the guidance and I said collaboration of Senator Nielsen, who is very much on process, and being that we are kind word or kind way of saying it: We're in a very disproportionate representative Legislature. It's important to have and know the processes. Unless we start speaking to them, new Members won't know what the processes were.

I was not aware of the processes as how they should be done. And it was someone with much more experience and background that actually would enlighten me as to what was and how it should be done. And so I just wanted to make sure that we had it on record so the public could be aware, so that we could have it on record so that my new colleagues in the Legislature could be aware of the processes as we move forward as passing on the baton of knowledge in the Legislature. Thank you, Madam Chair.

Thank you, Senator Ochoa Bogh. Allow me to turn now to Senator Roth.

Thank you, Madam Chair. I'll make this quick. You know, as a I guess I'll call myself a former labor attorney with a fair amount of labor contract negotiation experience. I have to tell you that in the eleven years that I'm now completing, ever since I got here, I've been bothered by this MoU process and the legislature's role in that process.

We're not at the table, we're not briefed as to progress or the issues, and up, at some point, pop these MoUs and we're asked to approve them, sometimes with accurate and complete data, sometimes I guess, perhaps not. Yet, we're asked to take a vote sometimes on short notice, and then we take the heat in the press.

I just read an editorial in my local newspaper yesterday or today suggesting to me what I should be doing on these MoUs and sometimes I pay attention to those editorials and sometimes I don't. But I guess my question is this given the fact that at least some of my colleagues and I joined them feel a little jammed this year on some of these MoUs, I assume that the MoUs, or at least some of the existing MoUs can be extended by the Governor despite and the parties despite the expiration date until we are prepared to vote.

If we push this vote off until January of 2024 in order to get better data, in order to validate the compensation study or studies and to have a more thorough analysis by the LAO and a more thorough discussion by all of us, why not? And did the Administration consider doing so in this case, given the short time that we've had to deal with any of this stuff?

Yes. And I would just revisit my comment that the Administration has been in conversations and discussions with the unions all that had MoUs up this year and it really is a two way street. The bargaining unit has to agree, there's a lot of negotiation that goes on back and forth and the timing of it is kind of what it is.

We do try to push understanding the budget process when we are at the table, reminding our partners that there are certain dates that need to be met. And so your point about deferring this to later? Generally, I would say that most of our state MoUs have evergreen clauses so they would continue on beyond their effective expiration date. But there are some items in MoUs that for example, state health, some bargaining units don't have automatic increases when state health costs go up. And so those bargaining units might want, they may have a preference and they may have more incentive to come in sooner, as an example.

If this were a two party agreement and that's all it were, then I wouldn't care. But the problem is it may be a two party agreement, but it requires the Legislature to approve, unfortunately. And that should require all parties to make sure that we have the accurate data fully validated and a full opportunity to discuss. So I'm not suggesting that we do that this year and I won't be around that many more.

But one of these days, some Legislature is going to say, you came to us too late, so you better extend your MoUs and we're going to take it up next year because I gather there's no requirement that we have a vote on these MoUs right now because we get to decide our agenda, correct?

That's correct.

Okay, well, message hopefully message received on the 9th and 10th floor. I'll be prepared to vote for them this year, but I think folks need to be more considerate of our schedule and our timeline and the other issues that we need to deal with at this point in time in the legislative cycle.

Agree. And again, we do try to stress that at.

Thank you, Madam Chair.

You're welcome, Senator. I'm so sorry. Senator Niello.

It happens, and I take that with the greatest degree of compliment. Jim's been a good friend of mine for many years. I just want to echo comments that have been made through this process, particularly Senator Ochoa Bogh and Senator Roth at the end. I find this a frustrating process. I've said that before. And the goat herder issue, and in particular, that Bill, is a perfect example of why we should not be taking up strictly policy issues in the context of the budget.

And that Bill is a perfect example of the multi subject rule violation. There's four separate policy issues in that Bill. And I heard some frustration, which I share, about the blunt statement being jammed by the Administration. And as Senator Roth indicated, at some point, perhaps a Legislature just won't let that happen. I look forward to that day.

There are a couple of bills that I will be supporting that might seem somewhat in Congress, but I just point out that Ralph Waldo Emerson said, "A foolish consistency is the hobgoblin of little minds." And I don't want to be a little mind when I cast support on a couple of issues. But by and large, I think the process needs a lot of work. And so for that reason, I'll be opposing the vast majority of these proposals.

You thank you, Members, for your questions and discussion. We are going to go to public comment now. Public comment, I appreciate that. Or rather public who wants to comment. I appreciate that. There are many of you. However, I am going to need to take a vote on these bills before noon because of these other obligations. So I would ask that you be as brief as possible so that we can hear from as many as possible. Appreciate it. Thanks. Go ahead. And I will cut folks off if they aren't brief.

I'll try to set a good example. Danica Rodarmel on behalf of the Transformative In-Prison Workgroup, representing 85 community based organizations, providing rehabilitative program in CDCR. Commenting on the Unit Six MoU, I just want to note that the amount agreed upon in that agreement would be 16 times the amount that we spend on rehabilitative programming in the prison system and five times the amount that we spend on food, clothing, education, cognitive behavioral therapy, and rehabilitation in the correctional system. So we cannot be claiming to move our correctional system in a direction where we're still vastly overspending on security and underinvesting in rehabilitation. Thank you.

Good morning. Cristina Salazar, Californians Together. I just want to say thank you for the updated definition of long term English learner, because with the updated language, it'll be a better reflection of who your students are. Thank you.

Hi, good morning. Matt Easley representing the California Correctional Peace Officers Association. And I'd just like to thank the Governor's Administration and Department of Finance for the reasonable deal that I believe we got. And one thing I'd particularly like to point out is perhaps the single most important provision in the Bill is the mental health and wellness incentive.

We definitely appreciate that because there aren't many professions in the state of California that experience the same level of stress and the required constant maintenance of a high level of awareness at all times, day in and day out. The job takes a heavy toll on our Members. And sadly, this year alone, in 2023, we've had eight Members that have committed suicide so far, and the year is not up yet. And unfortunately, this is not a unique year. So we definitely appreciate that and getting a deal that recognizes the difficulties that our Members struggle with. Thank you.

Leticia Garcia, on behalf of the Riverside County Superintendent of Schools, on two issues on AB 140 early education; We just want to thank all the parties involved for the two year extension on the reimbursable rates. We perceive this as the lifeline for many of our providers to stay open and no longer see more providers of early education close.

And then in relation to AB 142 on Cal Kids, we appreciate the creation of a pilot program in order to increase data sharing between scholarship and two LEAs, including Riverside County Office of Education, to improve outreach and participation rates in the college savings account. So, thank you.

Madam Chair and Members. Paul Yoder, on behalf of the city and county of San Francisco and Mayor London Breed. I just want to say thank you in the 143s for the inclusion of the redevelopment language for Hunters Point. That's going to get 10,000 units built quickly, we hope, and most of it's going to be affordable. It's not just going to help San Francisco, it's going to help the entire Bay Area and the entire state. Thank you.

Good morning, Chair and Members. It's Raquel Yaffe. On behalf of Thriving Families California, formerly known as CAPPA. We would like to express our gratitude to the Legislature for designating funding in SB 104 Fund the agreements and the newly ratified CCPU agreement, while also funding our community agencies to continue enrolling, supporting and lifting up families.

This budget package reflects the need to continue making families whole and stable, with meaningful access to childcare, while providing much needed stipends and supplemental pay to providers who are the backbone of a healthy and stable economy. Thank you.

Good afternoon, Madam Chair. Morning, Madam Chair. Louis Mirante, on behalf of the Bay Area Council, the Casino Coalition, and much of the ADU industry, to express our opposition to reverting the $50 million for ADU construction that's in the current budget and proposed to be eliminated under SB Four and AB 104. 1st want to thank you for championing that money in the first place and for all that you've done on affordable housing policy.

But this is some of the most effective money the state spends on affordable housing money. I'm sorry. On affordable housing policy. The $100 million that CalHFA has already encumbered have gone to 2400 ADUs, 40% of which are located in economically disadvantaged communities. 60% of the money has gone directly to Low income families, and the rest of it has gone to middle income families. This program has been a huge success, and I urge the Legislature to continue it. Thank you.

Hi. Good morning. Chair Skinner and committee Members. Daniel Schoorl on behalf of SEIU Local 1000 on AB 148. We are encouraged by this tentative agreement and would just like to highlight how this agreement protects thousands of state workers through compensation, wage equity adjustments and healthcare premium stipends. We urge you to support AB 148. And thank you.

Good morning, Rebekah Kalleen, on behalf of the Community College Facility Coalition, we want to thank you very much for your work on the affordable student housing solution. We do support what is contained in AB 142 that will allow critical projects to move forward. It will help meet student basic needs and it will help to address the state's critical affordability crisis here for housing. So we do appreciate that. We look forward to crafting the details of that state issued lease revenue bond. And thank you again for your support.

Good morning, Nina Buthee. I'm the Executive Director of Every Child California. We are a statewide nonprofit that supports subsidized early care and education programs. My comments today are related to AB 140, the Early Care and Education Trailer Bill, just with great appreciation for the Legislature and the Administration for really prioritizing early care and education needs, and through the CCPU bargaining agreement, including all childcare programs.

As part of that, we are a very under resourced early system, and so these investments are very much needed. I would, however, urge the re examination of the contract rate percentage for the cost plus rates, as this is below the current standard for adjustments. And unfortunately, the funding will not be sufficient in order to process the payments in a timely and accurate manner. So really encourage the reexamination of that percentage. Thank you.

And again, if I could get it as brief as possible, because I'm going to have to close off to begin the vote process. Go ahead.

Thank you, Madam Chair Keith Dunn, on behalf of The Goat Coalition supporting the administration's efforts on 143 to make sure that they're allowed to continue to be a service of fighting fire and climate change in the state of California. We appreciate the dialogue that's taken place and look forward to participating in the process to get a wage order determination in the next couple of years. Thank you.

Good morning, chair Members. I'm Juliet Terry with the Childcare Resource Center. We would like to thank the Administration for the accomplishments made through the negotiations made with the Childcare Providers United Union. As made evident in AB 140. CCRC supports the majority of features of AB 140. However, we must oppose the administrative percentages proposed by AB 140 for support programs.

Distributing these monthly Stipends 10% is insufficient for these programs to distribute these funds and they should be based on the current contracting amount terms of 17 and a half percent for alternative payment programs and 15% for centers. We sincerely ask for your support in making these necessary amendments to maintain these current levels of support to effectively provide these administrative changes and payments.

Thank you. Good morning. Kristin Roscoe. On behalf of the California Association of Marriage and Family Therapists. We greatly appreciate this morning's discussion regarding the inclusion of marriage and family therapists and psychiatric facilities. And we look forward to working with DHCS this autumn as they work to implement AB 137 and therefore, we remove our opposition unless amended position. Thank you.

Thank you. Madam chairman and Members, Matt Cremins here on behalf of the International Union of Operating Engineers. Proud to be here today in strong support of AB 148 in our MoU. Thank you.

Kimberly Rosenberger with SEIU. Keeping it brief on a broad swatch of workers. We're really appreciative of the work on AB 104, 140 and 148, which uplift workers in IHSS childcare CCPU. Of course, we really appreciate the Administration, but also the Legislature, and I'd be remiss if I didn't mention the staff that worked tirelessly to get the language perfect, as well as the work in bridging the gap for our state workers. So thank you.

Good morning, Chair and Members. Janice O'Malley with AskMe California. Just wanted to also echo what Kim Rosenberger had just mentioned about creating a pathway to paying providers for the actual cost of care. And thank you to the Legislature and the Administration on working closely with our childcare providers on that. Also wanted to highlight we represent Bargaining Unit 19. These are the healthcare and social service workers at CDCR and the Department of State Hospitals. The Ta is a result of many months of collective bargaining.

The workforce has changed a lot since COVID and the vacancy rates have doubled since 2018. We've asked for modest COLA increases in the SSAs, just for background. These are provided to our psychologists and occupational therapists, clinical social workers, physicians assistants. These positions are really difficult to recruit for and to retain. And so we really appreciate the administration's work at the table to ensure that they're adequately compensated. Thank you. Thank you.

Good afternoon. Andrew Martinez, Community College League of California. We are deeply appreciative of the changes in AB 442 when it comes to affordable housing at community colleges, and want to appreciate the Administration and the legislature's work on that. Thank you so much.

Thank you. All right. I'm not going to be able to turn to the phone lines today, and I apologize for that, but I do have to begin the vote process. Anyone who is intending to call us and weigh in by virtue of the public comment can send the Budget Committee a letter. You can send us in writing your comments. And as I mentioned, these bills will not be voted on the floor until next week.

So I encourage anyone who did not yet have the opportunity to weigh in to this discussion to please send us...We have to do five okay, apologies. We will have five minutes of public comment on the phone lines. So moderator key up very quickly, please. And we will have five minutes and five minutes only.

Thank you. And please press 10 at this time. Again, it's 10. And we'll go first to line 26. We'll go to line 28. Your line is open. Please don't press the numbers. Again, you're already in queue when I announce your number. Line 21.

Line 21. Your line is open.

Thank you very much. Good morning, Madam Chair and members. Pamela Gibbs, representing the Los Angeles County Office of Education. We appreciate the committee staff and administration for the clarifying amendments to the 2023 Budget Act relating to the Diverse Education Leaders Pipeline Initiative in AB 141. Specifically, the amendments ensure that the program builds capacity and partnerships to meet the needs of administrator candidates with a focus on improving student outcomes among pupils.

These partnerships are between local education agencies, nonprofit educational service providers, and institutes of higher learning. These provisions are key to the implementation of the bill and builds on the progress of administration and legislature have made over the years to strengthen the educator workforce. Thank you very much for your support and ongoing advocacy.

Next, we have line 25.

Good afternoon. This is Jennifer Baker representing the California Association for Bilingual Education. I'd like to associate my comments with Californians Together as representative that testified earlier in support of the change in definition for the long term english learners in AB 141. Thank you.

Line 41.

Good afternoon. Samantha Seng with NextGen California calling in regards to AB 142 pertaining to the Golden State Teacher grant program modification. We, along with other higher education advocates, submitted a letter with serious concerns with any language that would allow out of state online postsecondary institutions to access the Golden State Teacher Grant program and the precedent this would set for financial aid access in California and threaten the state's reputation as a leader in protecting students and student borrowers. We respectfully request that you can reconsider all the provisions that would allow these specific institutions access to the Golden State Teacher Program in AB 142. Thank you.

Line 11.

Hi, Chair and members, thank you so much for all your work. This is Tiffany Mok on behalf of CFT, and I want to thank members for the inclusion of AB 141 extension for substitutes to 60 days and also for the ability for our part time community college faculty to purchase health insurance through CalPERS or CalSTRS that's included in AB 142. Thank you so much.

Thank you. Next we have line 34. Please go ahead, 34. You may be on mute. Next we'll have line 48.

Daniel Savino, Association of Regional Center Agencies in support of AB 138 related to developmental services. We have submitted a letter as well detailing specific elements of the bill we support, particularly standardization of certain processes which the regional centers have already been working on. We very much appreciate your time and urge support of this Bill.

Next, we have line 49.

Good morning. Karina Lego with the Childcare Law Center speaking on behalf of AB 140. We are in support and we thank all the work on this bill. Additionally, the policies inside of this bill are vital to support both providers and families. Additionally, we support sufficient resources to ensure timely payments and the rollout for these vital improvements. Thank you.

Thank you. Line 51.

Good morning. Tyler Rinde, on behalf of the California Alliance of Child and Family Services, we are supportive of the language in AB 137 on psychiatric residential treatment program.

California is in desperate need of programs that can treat youth for mental health crisis with space and treatments designed for their needs. Additionally, we'd like to express appreciation to the administration and legislature for working with us on cleanup language to the adoption facilitator prohibition in AB 138, which will target it to unscrupulous adoption facilitators while not impacting other key adoption service providers. Thank you.

Line 47.

Good morning, Jen Chase from the University of California calling in support of AB 143. This bill provides an extension for expiring physician postgraduate training licenses. We appreciate the work of the legislature and the administration. This will ensure that UC medical trainees continue to provide clinical care to our patients while the medical board processes a backlog of applications. Thank you.

Line 42.

Good morning, Chair Skinner and committee members. My name is Steven Alari and I'm a proud Member of SEIU Local 1000. I'm calling today in support of the tenant agreement included in AB 148. This contract is much needed investment in our civil service workforce and I strongly urge you to approve it when it reaches the center floor. Thank you for your time.

Moderator, this next caller will be the last comment.

Okay, we've got line 46. Please go ahead.

Yes. Hi. My name is Sarina Lynn with Educational Enrichment Systems. I'm calling in strong support of AB 140. I just want to call out that the women of color that are serving California's youngest and most vulnerable learners through the California state subsidized system of care is really important and those professional women deserve professional wages. Also, quality care is expensive and the reason that care is so expensive is quality ratios.

One to four ratio is a good ratio and what it should be, and the existence of transitional kindergarten has made it very difficult for providers to transition and the hold harmless is crucial to make sure we get more infants to toddlers. Thank you so much.

Thank you. Again, for those who are on the line who we weren't able to get to, please submit anything in writing your concerns or comments or supports, oppositions, what have you, to our budget committee, and we'll be able to share it to our members.

And now, usually I make comments on various parts of these kinds of bills, but because we need to vote, I'll say just in addition to my hat, as Chair of Budget, I'm also Chair of the Legislative Women's Caucus, and I am very happy about the childcare bill before us. And I would note that we will be the first state in the nation to provide to establish a retirement fund for childcare workers.

And given that one of the reasons that we have a shortage of childcare, which of course the shortage alone makes it more expensive is because the workers themselves, if they can't afford to live on wages, then they quit being a childcare worker. And so we need more childcare workers. So I want to just say I'm really pleased with that, and I'll refrain from any other comments. And we will now go to acting on the bills. And the first bill is AB 104, the budget act of 2023. Okay, so we have a motion by Senator Laird. We will have roll call, please.

AB 104. The motion is do pass. Senator Skinner? Aye. Skinner aye. Niello? No. Niello no. Becker? Aye. Becker aye. Caballaro? Aye. Caballaro aye. Dahle? No. Dahle no. Durazo? Aye. Durazo aye. Eggman? Aye. Eggman aye. Grove? No. Grove no. Laird? Aye. Laird aye. McGuire? Aye. McGuire aye. Menjivar? Aye. Menjivar aye. Min? Aye. Min aye. Newman? Aye. Newman aye. Ochoa Bogh? No. Ochoa Bogh no. Padilla? Aye. Padilla aye. Roth? Aye. Roth aye. Seyarto? No. Seyarto no. Smallwood-Cuevas? Aye. Smallwood-Cuevas aye.

Alright, I believe that is 13 to 5. Did I get that correct? Okay.

Madam Chair, move item number 2 AB 135.

AB 135 roll call, please.

AB 135. The motion is do pass. Senator Skinner? Aye. Skinner aye. Niello? No. Niello no. Becker? Aye. Becker aye. Caballaro? Aye. Caballaro aye. Dahle? No. Dahle no. Durazo? Aye. Durazo aye. Eggman? Aye. Eggman aye. Grove? No. Grove no. Laird? Aye. Laird aye. McGuire? Aye. McGuire aye. Menjivar? Aye. Menjivar aye. Min? Aye. Min aye. Newman? Aye. Newman aye. Ochoa Bogh? No. Ochoa Bogh no. Padilla? Aye. Padilla aye. Roth? Aye. Roth aye. Seyarto? No. Seyarto no. Smallwood-Cuevas? Aye. Smallwood-Cuevas aye.

13-5. The bill passes.

Madam Chair, I move item number three AB 137.

Let's have a roll call then on AB 137.

AB 137. The motion is do pass. Senator Skinner? Aye. Skinner aye. Niello? No. Niello no. Becker? Aye. Becker aye. Caballaro? Aye. Caballaro aye. Dahle? No. Dahle no. Durazo? Aye. Durazo aye. Eggman? Aye. Eggman aye. Grove? No. Grove no. Laird? Aye. Laird aye. McGuire? Aye. McGuire aye. Menjivar? Aye. Menjivar aye. Min? Aye. Min aye. Newman? Aye. Newman aye. Ochoa Bogh? No. Ochoa Bogh no. Padilla? Aye. Padilla aye. Roth? Aye. Roth aye. Seyarto? No. Seyarto no. Smallwood-Cuevas? Aye. Smallwood-Cuevas aye.

I believe we have a 13-5 vote once again. Alright, that bill passes 13-5.

Madam Chair, move item number four AB 138.

I said it earlier on AB 138. We'll have a roll call.

AB 138. The motion is do pass. Senator Skinner? Aye. Skinner aye. Niello? Aye. Niello aye. Becker? Aye. Becker aye. Caballaro? Aye. Caballaro aye. Dahle? Aye. Dahle aye. Durazo? Aye. Durazo aye. Eggman? Aye. Eggman aye. Grove? Aye. Grove aye. Laird? Aye. Laird aye. McGuire? Aye. McGuire aye. Menjivar? Aye. Menjivar aye. Min? Aye. Min aye. Newman? Aye. Newman aye. Ochoa Bogh? Aye. Ochoa Bogh aye. Padilla? Aye. Padilla aye. Roth? Aye. Roth aye. Seyarto? Aye. Seyarto aye. Smallwood-Cuevas? Aye. Smallwood-Cuevas aye.

So that votes 18-0.

Madam Chair, move item number 5 AB 140.

Alright, we have a motion on AB 140. Can we have roll call please?

AB 140. The motion is do pass. Senator Skinner? Aye. Skinner aye. Niello? No. Niello no. Becker? Aye. Becker aye. Caballaro? Aye. Caballaro aye. Dahle? Durazo? Aye. Durazo aye. Eggman? Aye. Eggman aye. Grove? No. Grove no. Laird? Aye. Laird aye. McGuire? Aye. McGuire aye. Menjivar? Aye. Menjivar aye. Min? Aye. Min aye. Newman? Aye. Newman aye. Ochoa Bogh? Not voting. Ochoa Bogh not voting. Padilla? Aye. Padilla aye. Roth? Aye. Roth aye. Seyarto? No. Seyarto no. Smallwood-Cuevas? Aye. Smallwood-Cuevas aye.

That bill is 13-3. We'll now move to AB 141, motion by Senator Laird. Roll call please.

AB 141. The motion is do pass. Senator Skinner? Aye. Skinner aye. Niello? Aye. Niello aye. Becker? Aye. Becker aye. Caballaro? Aye. Caballaro aye. Dahle? Aye. Dahle aye. Durazo? Aye. Durazo aye. Eggman? Aye. Eggman aye. Grove? Laird? Aye. Laird aye. McGuire? Aye. McGuire aye. Menjivar? Aye. Menjivar aye. Min? Aye. Min aye. Newman? Aye. Newman aye. Ochoa Bogh? Aye. Ochoa Bogh aye. Padilla? Aye. Padilla aye. Roth? Aye. Roth aye. Seyarto? Aye. Seyarto aye. Smallwood-Cuevas? Aye. Smallwood-Cuevas aye. Grove aye.

So that bill has 18 votes. We will now go to AB 142, motion by Senator Laird. We'll have roll call.

AB 142. The motion is do pass. Senator Skinner? Aye. Skinner aye. Niello? Aye. Niello aye. Becker? Aye. Becker aye. Caballaro? Aye. Caballaro aye. Dahle? Durazo? Aye. Durazo aye. Eggman? Aye. Eggman aye. Grove? Laird? Aye. Laird aye. McGuire? Aye. McGuire aye. Menjivar? Aye. Menjivar aye. Min? Aye. Min aye. Newman? Aye. Newman aye. Ochoa Bogh? Aye. Ochoa Bogh aye. Padilla? Aye. Padilla aye. Roth? Aye. Roth aye. Seyarto? Smallwood-Cuevas? Aye. Smallwood-Cuevas aye.

Can you tell me that one? The vote on that one? Yes. All right. So that vote was 16-0 bills out. We now have AB 143. Do we have a motion? Alright, Senator Roth moves AB 143. Let's have a roll call.

AB 143.

Madam Chair, there's a question over here.

I have a question. In terms of the vote, is there a way to separate out an item within 143?

No.

That's the problem with multiple subjects.

Alright. Anyway, we've answered the question. We have before us AB 143 in its entirety. We will have the roll call, please

AB 143. The motion is do pass. Senator Skinner? Aye. Skinner? Aye. Niello. Not voting. Becker? Aye. Becker aye. Caballaro? Aye. Caballaro aye. Dahle? Aye. Dahle aye. Durazo? No. Durazo no. Eggman? No. Eggman no. Grove? Aye. Grove aye. Laird? Aye. Laird aye. McGuire? Aye. McGuire aye. Menjivar? No. Menjivar no. Min? Aye. Min aye. Newman? Aye. Newman aye. Ochoa Bogh? Aye. Ochoa Bogh aye. Padilla? Roth? Aye. Roth aye. Seyarto? Smallwood-Cuevas?

I think it was 11. 11-3.

I'll move item number 9 AB 148.

Alright, 11-3. AB 143 is out. We'll now take a roll call on AB 148. Senator Laird's moved.

AB 148. The motion is do pass. Senator Skinner? Aye. Skinner aye. Niello? No. Niello no. Becker? Aye. Becker aye. Caballaro? Aye. Caballaro aye. Dahle? No. Dahle no. Durazo? Aye. Durazo aye. Eggman? Aye. Eggman aye. Grove? Laird? Aye. Laird aye. McGuire? Aye. McGuire aye. Menjivar? Aye. Menjivar aye. Min? Aye. Min aye. Newman? Aye. Newman aye. Ochoa Bogh? Not voting Padilla? Aye. Padilla aye. Roth? Aye. Roth aye. Seyarto? No. Seyarto no. Smallwood-Cuevas? Aye. Smallwood-Cuevas aye.

Alright. That bill, 148, has 13 ayes, 3 no's. We will now move to item 10 AB 151.

So move.

Senator Laird's moved.

AB 151. The motion is do pass. Senator Skinner? Aye. Skinner aye. Niello? Not voting. Becker? Aye. Becker aye. Caballaro? Not voting. Dahle? Durazo? Aye. Durazo aye. Eggman? No. Eggman no. Grove? Laird? Aye. Laird aye. McGuire? Aye. McGuire aye. Menjivar? No. Menjivar no. Min? Aye. Min aye. Newman? Aye. Newman aye. Ochoa Bogh? Not voting. Ochoa Bogh not voting. Padilla? Not voting. Roth? Aye. Roth aye. Seyarto? Smallwood-Cuevas? Not voting.

That bill was 10 ayes two no's. Is that correct? Okay. 10 ayes. 2 no's. That was AB 151. Bill passes. So now we will go to AB 152. Do we have a motion? Great. We will have Senator Min's motion. Let's have a roll call in AB 152.

AB 152. The motion is do pass. Senator Skinner? Aye. Skinner aye. Niello? Aye. Niello aye. Becker? Aye. Becker aye. Caballaro? Aye. Caballaro aye. Dahle? Aye. Dahle aye. Durazo? Aye. Durazo aye. Eggman? Aye. Eggman aye. Grove? Aye. Grove aye. Laird? Aye. Laird aye. McGuire? Aye. McGuire aye. Menjivar? Aye. Menjivar aye. Min? Aye. Min aye. Newman? Aye. Newman aye. Ochoa Bogh? Aye. Ochoa Bogh aye. Padilla? Aye. Padilla aye. Roth? Aye. Roth aye. Seyarto? Aye. Seyarto aye. Smallwood-Cuevas? Aye. Smallwood-Cuevas aye.

Alright. That bill passes with 18 ayes. Is that correct? 18 ayes. So AB 152 passes. That concludes the work of the budget committee for today. I appreciate staff and all the work you've done.

Also, of course, our Department of Finance and other staff in the Administration and the public for their input. And with that, we will conclude this hearing today.