Assembly Standing Committee on Budget

Good afternoon. We are calling the Assembly Committee on Budget to order. Today we're hearing 22 bills, including SB 101, which we adapted on June 15, which is the Budget Act. This, again is an informational hearing. Informational hearing. The Bill is on the floor for a floor vote tomorrow. There's going to be no action in Committee. We appreciate Ms. Erica Li from Department of Finance to provide an overview of the package and all the bills at once.

We will then go to our Legislative Analyst to see if he has any comments. Then, of course, go to the Dais for Member questions as well as any comments. We will have public comment. There is a phone number for any public who's not here. Call in numbers 877-692-8957. The access code is 1850-1100. There are any issues, you can call the Assembly Committee on Budget at 916-319-2099. Again, this budget is a culmination of over 61 hearings, including the one today.

This is very similar to the Bill that we passed on June 15, as well as similar to the May revision which the Governor proposed. It is $310,000,000,000 in expenditures, $225,000,000,000, almost $226,000,000,000 in General Fund expenditures and does not touch the Rainy Day Fund. We continue to have a very robust Reserve at $37.8 billion. Major priorities continue. We have an 8% COLA increase for K through 12 education, as well as our community colleges. We are moving toward healthcare for all as well as TK for all.

And again, some major additions are $5.1 billion for transit funding, with some flexibility for our operators to use them for operations. $2.83 billion in one time. Childcare funds, significant portion for rate increases. While this is not ongoing rate increases, this at least provides rate increases over the next two years with an opportunity to continue to keep fighting for that in the future.

Includes $2.7 billion in health reimbursement, rate increases and other investments annually through the managed care organization Tax that we plan to tax it's plan to pass. Also provides an additional year of homelessness funding for our HAP program, $1 billion. Also additional housing, affordable housing money. $50 million for CalHome, including $50 million for CalHome and 50 million for ADU financing. 500 million in ongoing funds.

And again, we're providing 82.5 million from Covered California penalties to lower copays and deductibles and really reflects a really good effort to maintain our key priorities. As I've stated throughout this entire year. This year, I know there was a lot of discussion about a deficit. What it really was was a misprojection around how much revenue we had. This is still the second largest budget in state history.

And just to have context, again, our General Fund, even just a few years ago in 2019, 2020, was $147,000,000,000 in 19-20. And again this year we're looking at $225,000,000,000. So again, a very significant growth, very significant increase. Again, we continue to maintain our focus on education, on making sure that we continue to support our human services programs like CalWORKS and CalFresh, as well as continuing to expand healthcare access for all.

And with a future MCO package to be passed with rate increases that will make access not just be in name alone in terms of insurance access, but access to care, hopefully with more providers there. Let me turn it over to our Vice Chair to see if he has any opening comments. And then we'll go to the Department of Finance, then LAO and then our budget team.

Thank you. Mr. Chair. Want to appreciate his work and the work of our staff and his staff in this chaotic process. I know that I've shared frustrations with the Chair in terms of just how up and down this process has been. I will say this. I don't think that this process should be replicated ever again. I think that we have a process in place that allows for more transparency and budget conference committees and everything ensuing that I think we need to be engaging more stakeholders.

I think we need to allow for more public input. So a lot of these things that I'll ask questions on is the first time we've ever discussed these issues. And I think That's an important point for the public to understand is that some of these ideas and proposals in this agreement were never heard in Subcommitee, were never heard in Committee, were never even heard in policy Committee. And so now they're airdropped in this agreement.

And so I look forward to hearing the questions, answers to those questions. There are sustainability issues. I think the Chair highlighted the size of this budget. And I think that's one of the big concerns. Can we sustain this size of a budget over time, especially with a number of cliffs in a number of areas? If you look at I'm looking at the Department of Finance's analysis of this, and we'll go into that as well in terms of deficits into the future.

So I think that there are a lot of outstanding questions and this framework assumes no recession. And so if we look at the projections moving forward, we're going to have very difficult decisions in the future. So I appreciate the chair's work. I appreciate the work of the Committee. I wish it wasn't as so chaotic and I wish there was more input from the public. And so I look forward to the answers to the questions I have.

Thank you very much. Appreciate your comments, Mr. Vice Chair, as well as your patience and the Committee's patience. I know today has been a little bit of a hectic day. Let me just kick it off to Ms. Erica Li from Department of Finance.

Good afternoon. Chair Ting. Vice. Chair Fong. Erica Li with the Department of Finance. And I am here today to provide an overview of the 2023 budget package, which consists of two budget Bill juniors and 20 accompanying Trailer bills. And I think I heard the chair say to go through all of the bills. Okay, so at a high level, I will touch on each of these bills for the 2023 24 fiscal year. The budget package authorizes expenditures of 226,000,000,000 General Fund and 310.8 billion total funds.

This package closes a shortfall of more than $30 billion, but does so while also maintaining the shared goals and priorities of both the Governor and the Legislature. It protects core investments in vital state programs that impact the lives of millions of Californians. It also sets aside a combined 37.8 billion in budget reserves, a strong insurance policy that recognizes the continued risks to our revenue outlook.

As Mr. Fong mentioned, these reserves place the state in a position to better weather potential declines in revenues without having to make deep cuts to vital state programs that serve millions of Californians. The total reserves include the rainy day Fund of 22.3 billion, the public school system stabilization account, or the public school rainy day Fund of 10.8 billion, the safety net Reserve 900 million, and the Special Fund for Economic Uncertainty, which is what I like to call the State's discretionary Reserve check. The checkbook 3.8 billion.

To close the shortfall, the budget includes $31.7 billion in budget solutions, which can be broadly categorized as Fund shifts. There's $9.3 billion in Fund shifts, some reductions, about 8 billion, some delays, also about $8 billion revenue and borrowing of $6.14 billion, and some triggers that come into effect should certain things occur there's $340,000,000.

Even with these necessary steps to close the shortfall the budget agreement, this package continues to protect core programs and services that reflect California's values in pre K to 12 and in higher education, in expanded health care, and in sustained safety net programs, while maintaining the state's initiatives to address the challenges of homelessness, housing availability, public safety and climate change. And with that, I'll begin with the first two budget Bill juniors, which amend previous budget bills.

The first is AB, SB 102, the budget Bill Junior that amends the 2023 budget Bill. This Bill includes climate investments in water and drought. 8.1 billion of investments are maintained over multiple years in programs and projects to bolster the capacity of communities and ecosystems to endure droughts and floods. There are ZEV investments, about 10 billion multiyear investments maintained to support the state's transition to zero emission vehicles and in flood and drought, an additional $437,000,000 for flood and drought activities over two years.

For transit, we have 4 billion General Fund included for two years, and another 1.1 billion for the Zero Emission Transit capital program in K 12 education. The budget Bill Junior also includes investments including $381,000,000 Prop . 98 General Fund and $136,000,000 non-prop 98 General Fund to be available to reduce family fees. It maintains 4 billion ongoing Prop 98 General Fund for the Expanded Learning Opportunities program. In higher education, there are increases for ongoing increases.

The Bill increases ongoing General Fund support for student housing projects at the UC system and the CSU, and shifts the approach for affordable student housing grants to local revenue bonds at the Community College for Health and Human Services. This Bill implements and authorizes funding for significant proposals, including, but not limited to, healthcare workforce investments, the Distressed Hospital Loan Program, the Small and Rural Hospital Relief Program, the Community Assistance Recovery and Empowerment Act or the Care Act.

The Cal Aim Providing Access and Transforming Health Program as well as Cal Aim Behavioral Health Payment Reform naloxone Distribution Project Public Health Workforce Covered California. It also includes language and funds for an IHSS collective bargaining study, funds for Summer EBT electronic benefits transfer, CalFresh funds, California Food Assistance Program or CFAP funds, funds for foster youth childcare, as mentioned at the top by Mr. Ting and the Health and Human Services Innovation Accelerator Initiative.

Additionally, this Bill appropriates $2 million General Fund to the Government Operations Agency to support various leadership initiatives, as well as provides funding for two capital projects that will support the transformation of San Quentin from a maximum security prison into a facility focused on improving public safety. It includes savings associated with prison closures and facility deactivations, and includes various reentry proposals, including additional funding for current reentry providers in recognition of increased costs associated with providing reentry services for the Judicial Council.

It includes funding to support court Administration of the Care Act, includes funding to support implementation of the Racial Justice Act. It also includes funds for the Local Government Sustainability Fund and the City of Fresno to support the City of Fresno infrastructure plan to invest in the downtown area. And finally, it extends the California Competes Cal Competes grant program for one year. Moving on to the second BBJ. ABSB 103 this budget Bill junior amends the 2021 and 2022 budget acts. This Bill authorizes $343,000,000 Prop.

98 General Fund and $20,000 nonprop 98 General Fund to be available over the 23-24 and 24-25 fiscal years to Fund any adjustments related to reimbursement for preschool providers subject to a ratified agreement and future legislation providing for appropriations related to the budget Bill. And it extends a timeline for the Superintendent of Public Instruction to enter into a contract to develop an Individualized Education Program, or IEP facilitation network.

It authorizes the Judicial Council to use existing funds to support a firearm relinquishment program for the removal of firearms from individuals who become prohibited from owning or possessing firearms pursuant to criminal court proceedings. And it provides authority for the Department of Corrections and Rehabilitation to increase rates for current reentry providers by 50% for 2324 and makes other changes to facilitate the continued operation of reentry beds. Moving on to the next trailer Bill. AB/SB. 114 the K-12 Trailer Bill.

This Bill provides several significant ongoing Prop 98 General Fund investments, including, but not limited to, a 3.4 billion discretionary increase to the Local Control Funding Formula. $300 million to support an equity multiplier add on for the Local Control Funding Formula to accelerate gains in closing. Opportunity and outcome gaps. And an $80 million increase to county offices of education to support county offices serving students in juvenile courts or county community alternative schools.

It also provides several significant onetime Prop 98 General Fund investments, including 250,000,000 for the second round of literacy coaches and reading specialist funding, and 1 million for the convening of a panel to create a list of approved screening instruments for local educational agencies to use to assess pupils for risk of reading difficulties beginning in the 25-26 school year.

It also makes new statutory changes and modifies the Administration of several existing programs, including the Expanded Learning Opportunities Program, the Statewide System of Support Program, and finally, the Bill reflects the additional 80 million Prop 98 General Fund provided for county juvenile court and county community schools. Moving on to AB/SB 115 education Prop. 28 Trailer Bill.

This Bill makes clarifying implementation amendments to the arts and music and school statute as passed by Proposition 28 in November of last year to, among other things, allow for the entitlement payments to be issued through the California Department of Education's principal apportionment program calculate funds for and issue funds to preschool programs and for other clarifying and technical corrections. Moving on to AB/SB 116. The childcare Trailer Bill.

This Bill authorizes $446,000,000 Prop 98 General Fund and $187,000,000 General Fund to be available to Fund any adjustments related to reimbursement for preschool providers subject to a ratified agreement and future legislation with the funds appropriated through this Bill and the budget Bill juniors the budget provides a total of approximately 2.8 billion Prop 98 and Nonprop. 98 General Fund for preschool and childcare providers over two years.

This Bill suspends the statutory COLA in fiscal years 2324 and 24 25 and declares legislative intent to make any adjustments in those years related to reimbursement for preschool and childcare providers. Subject to a ratified agreement and future trailer Bill Language. It extends current reimbursement flexibilities until September 30, 2023. The Bill authorizes the forgiveness of childcare and preschool family fee debt that accrued but remained uncollected and revises the family fee schedule for childcare and preschool programs.

Moving on to AB/SB 117 the Higher Education Trailer Bill among many things, this Bill provides 60 million onetime Prop. 98 General Fund for five years starting in 24 25 fiscal year to expand nursing programs and Bachelor of Science in nursing partnerships to grow, educate and maintain the next generation of registered nurses through the community college system subject to future legislation. Provides an add on to the Student Success Completion Grant of $5,250 per semester for specified current and former foster youth at the community colleges.

It clarifies service requirements for the Golden State Teacher Grant Program, expands the Middle Class Scholarship Program to provide debt free college for former foster youth at the UC and CSU for student housing. This Bill reflects a shift in approach from General Fund supported construction grants to local revenue bonds, support construction grants for the community colleges, and approved construction grants will be funded using UC, CSU and CCC bonds for three CSU projects, four CCC projects and three intersegmental projects.

And lastly, the Bill appropriates 1.71 billion one time General Fund over the next six years for the California Student Housing Revolving Loan Fund. Moving on to AB/SB 118 the Health Trailer Bill. This Bill removes the medical Doctor requirement as part of the eligibility criteria to serve as the Director of the Emergency Medical Services. It implements the budget agreement to fully Fund the healthcare access and implementation workforce investment.

It authorizes Calrex to engage in partnerships related to the procurement or manufacturing of Low cost generic pharmaceutical drugs, extends the Public Contract Code exemption currently authorized and updates reporting requirements. It conforms state law with new federal policy that permits Pharmacists to dispense certain reproductive health drugs. Sorry. The budget reflects a renewed MCO tax for 3 and 3 quarter years starting retroactively to April 1 of this year. Revenues will support the medical program, including increased providers reimbursement and additional healthcare related investments.

And finally, the Bill shifts individual responsibility mandate penalty collections from the General Fund to the Healthcare Affordability Reserve Fund, or HCARF, starting in 23-24 and ongoing, as well as authorizes a General Fund loan of 600 million from the Healthcare Affordability Reserve Fund in 23-24 and repayment in 25-26. Moving on to AB/SB 119, the managed care organization Bill. This Bill implements the Managed Care Organization provider tax. I just discussed the managed care organization provider rate language in the previous Bill.

Specifically, this Bill reflects a new MCO provider tax effective April 1 of this year through the end of December of 2026. The MCO tax is a mechanism to draw down additional federal Medicaid funds and must be approved by the federal government. Based on the proposal and the latest enrollment data, the tax results in $32.3 billion in total revenues, including $12.9 billion to Fund reimbursement of the MCO provider tax to medical managed care plans.

$8.3 billion in net General Fund Benefit to continue to support the medical program after accounting for the cost to Fund rate increases for targeted providers and services to at least 87.5% of Medicare and finally, $10.3 billion in net revenue in the Medical Provider Payment Reserve Fund to support additional investments in the medical program. Moving on to the next Bill. AB/SB 120, the Human Services trailer Bill.

This Bill amends the current penalty structure for counties that fail to reach an in Home Supportive Services collective bargaining agreement from 7% one time to 10% ongoing until an agreement is reached. It amends statutes to eliminate provider eligibility requirements that only apply to minor recipients and allows all minor children to have access to their provider of choice like all other IHSS recipients. It specifies the supplemental rates for foster youth and Supervised Independent Living Placements, or SILPs.

It implements a new supplement beginning July 1, 2025, or upon necessary automation, whichever is later. It reflects ongoing funding to provide a 3.6% increase to CalWORKS maximum aid payment levels beginning in October of this year. The Bill also requires automation and implementation of a pilot program to bring the minimum CalFresh benefit from $23 to $50.

It extends the sunset of the California Fruit and Vegetable Electronic Benefits Transfer Pilot Program from January 1, 2024 to January 1, 2027, and requires DSF to maximize participation in the summer EBT program in collaboration with Cde. The next Bill AB/SP 121 the Developmental Services Trailer Bill this Bill clarifies when Regional Centers should pay for medical services, when individuals and families experience prolonged delays in accessing similar generic services through health insurance.

It authorizes the Department of Developmental Services to improve consumer access to social, recreation and camping services by designating these services as participant directed services. It adjusts service provider rate reform implementation that focus on promoting stability and predictability for service providers, and it appropriates $10.8 million General Fund to support the Department of Developmental Services Coordinated Family Support Service pilot through 23 24. The next Bill is AB/SB 122. The Resources trailer Bill.

This Bill extends the California Water and Wastewater Array Payment Program supported by the Federal American Rescue Plan Act, or ARPA of 2021. It extends the end date of the eligible period of array forgiveness from June 2021 to December 2022. It authorizes the State Water Resources Control Board and the Regional Board to assess fees for recycled water permits to support required permitting staffing at the boards.

It updates the fee structure for dam applications to support required workload for the Department of Water Resources it streamlines regulatory requirements to allow for diversion of floodwater for underground storage subject to screening and other conditions, protective of public health and Fish and Wildlife. It authorizes the Department of Toxic Substances Control to pay per diem to Capini Members, and it provides necessary enforcement authority to the Secretary of the Environmental Protection to ensure that program goals are achieved. Moving on to AB/SB 123, the first energy trailer Bill.

This Bill authorizes the Department of Water Resources to reimburse utilities for additional energy imports above their resource adequacy requirements this summer in furtherance of statewide grid reliability. It shifts regulatory responsibilities associated with the electric vehicle supply equipment. Payment standards from the state Air Resources Board to the California Energy Commission.

It requires the California Public Utilities Commission to direct all funds in the residential, solar and storage programs included in the 22 Budget Act to support Low income populations, and it extends deadlines associated with the required framework for measuring carbon, intensity of construction materials and the comprehensive strategy for the state's building sector to achieve a 40% net reduction in greenhouse gas emissions. Moving on to AB/SB 124 the second Energy trailer, Bill.

This Bill provides clarification on the statutes governing the Demand Side Grid Support Program and Distributed Electricity Backup Assets Program at the California Energy Commission and the Electricity Supply Strategic Reliability Reserve Program at the Department of Water Resources. It extends the California Public Utilities Commission authority to convene the Diablo Canyon independent peer review panel if plan operations continue through 2030. It clarifies that the independent safety Committee for Diablo Canyon was established by the California PUC.

It makes edits to the extraordinary special session Bill SBX 12 most notably for the transportation fuels assessment requiring clarity on the work group composition. And it allows Ibank and the Department of Water Resources to access federal funding and utilize tax incentives provided in the Federal Inflation Reduction Act, or the Ira to finance projects that reduce greenhouse gas emissions. Moving on to AB/SB 125. The transportation trailer Bill.

This Bill establishes the Transit Transformation Task Force, made up of transit operators, Caltrans, local governments, and metropolitan and regional planning organizations, among others. The Task Force will develop recommendations to grow ridership and improve the transit experience, which will be presented to the Legislature. It establishes reporting and accountability requirements for transit agencies receiving 4 billion in transit and innercity rail and capital program, or TIRCP, funding, and 1.1 billion for transit Zev funding.

The information and plans received through these requirements will help guide the newly created Transit Transformation Task Force. It continues the current statutory relief provided to transit agencies that have seen ridership impacted by COVID-19. It pays Members of advisory committees to the CTC, the Transportation Committee Commission, who are not Members of the Commission, $100 daily per diem. It limits the amount of amount Caltrans can charge for indirect Administration costs to 10%.

And lastly, it provides reporting requirements for Caltrans that will summarize and quantify the outcomes of the Encampment Coordinator activities. Moving on to AB/SB 127 the General government trailer Bill. This Bill allows the Department of General Services to install emergency sleeping cabins or small homes in LA, Sacramento, San Jose and San Diego County to serve people experiencing homelessness. It specifies that the Department of General Services will perform all standard maintenance of a monument to California's native people on state capitol grounds.

It makes changes to AB 2135, which requires state agencies not under the direct authority of the Governor to adopt and implement specified information security standards. It creates an Enterprise Fund allowing the Department of Technology to receive revenues and pay expenses in support of the state's Middle Mile Broadband Initiative.

It authorizes the Department of Finance to issue budgetary loans from the Litigation Deposit Fund to the General Fund, establishes the Children's Data Protection Work Group, establishes the Racial Equity Commission in statute, and transfers the Youth Empowerment Commission under the Administration of the Office of Planning and Research. It makes various changes to the Made in California program requirements, aligns sunset dates with encumbrance and expenditure periods for various GoBiz programs.

It includes the Office of Planning and Research's Community Resilience Center program with the Advanced Payment Pilot Program, which explores possible improvements to the state's existing advanced payment practices for state funded local assistance grants, and this Bill makes additional technical and clarifying changes to existing law. The next Bill is AB/SB 128. The cannabis trailer Bill.

This Bill authorizes the Department of Cannabis Control, or DCC, to receive criminal history record information from the FBI for its applicants, licensees and Department employees by submitting to the Department of Justice fingerprints and related information. It exempts an owner who has previously submitted fingerprint images and related information required by the DOJ in connection with a valid state license from submitting the same information for a subsequent state license application, the intent being to minimize Duplicative fingerprinting of applicants for more than one license.

Moving on to AB/SB 129, the Housing and Homelessness Trailer Bill. This Bill creates a regional coordination framework for around five allocations of the Homeless Housing Assistance and Prevention Program, or HAPP, that hold cities, counties and continuums of care accountable by requiring a coordinated regional plan identifying each jurisdiction's role, outcome goals, and how local entities are using various state and federal funding sources to reduce homelessness. It makes technical changes to the excess sites. Local government grant program and the Infill infrastructure grant program.

And finally, it creates the Employee Housing Regulation Fund for the deposit of existing regulatory fees on employee housing. AB/SB 130 the Labor Trailer Bill The Labor omnibus trailer Bill includes. It removes the 2024 sunset date for the Domestic Worker Education and Outreach Program. It expands prevailing wage registration and fees to housing projects subject to prevailing wage requirements that are afforded streamlining through recently enacted legislation.

It also adjusts the release of Unemployment Insurance Trust Fund and unemployment disability compensation Fund to align with the release of the Governor's Budget in January. The next Bill is AB/SB 131, the Revenue and Taxation trailer Bill. This Bill includes several tax policy proposals, including it expands access to the new employment credit and increases the credit amount for semiconductor companies and certain green energy industries.

It requires that income derived from an incomplete gift non grantor trust be included in the grantor's gross income, closing a tax loophole that allows high net worth individuals to avoid state income taxation.

It clarifies existing law that personal income tax refunds issued as a result of the Foster Youth Credit will not be reduced by FTB for debt collection for other entities, and it also includes several amendments to certain FTB data sharing agreements to identify individuals who receive social service benefits who would also qualify for certain antipoverty programs. Moving on to the next Bill. AB/SB 132 the film tax credit Trailer Bill.

This Bill creates the Film Tax Credit 40 program, extending the current program at $330,000,000 per year from 2025-26 to 2029-30. It allows taxpayers receiving 4.0 credits to elect to receive the credit as a tax refund over a five-year period at a 90% value. It provides a 4% uplift to credit recipients that complete certain diversity reporting requirements.

It expands through increased fees on 40 credit awardees the Career Pathway Programs, which is aimed at providing training programs for individuals from underserved communities to become employed in the California film industry. It adds set safety requirements for productions that receive a tax credit under the Extended program. And finally, it makes technical fixes to the Soundstage program to ensure it functions as originally intended. Moving on to AB/SB 133 the Court's Trailer Bill this Bill authorizes Equal Access funding to be used for loan repayment assistance.

It eliminates the sunset dates for various civil filing fees that are set to expire on July 1. And it requires the Judicial Counsel to develop regulations that establish training requirements for legal counsel appointed to Racial Justice Act claims. And I believe this is the last trailer Bill. AB/SB 134. The public safety Trailer Bill. This Bill includes language that supports and expedites the transformation of San Quentin from a maximum security prison into a facility focused on improving public safety through rehabilitation and education.

It requires the Department of Corrections and Rehabilitation to provide an assessment of its system wide and institution specific capacity and housing needs based on its population projections to help inform prison enclosure. Right sizing decisions. It temporarily exempts the Commission on Peace Officer Standards and Training or POST through January 2027 from the Public Records Act to enable the Commission to focus on implementation of SB 2. Noteworthy the records POST will be temporarily exempt from providing are still available from local law enforcement entities. And that concludes my remarks. Thank you.

Thank you, Ms. Lee. Any comment from our Legislative Analyst?

Mr Chair, Gabe Petek, Legislative Analyst. I'm here with several of my colleagues and no prepared comments just available in case there are any questions.

Appreciate it. And no comments from the Committee. OK, I'm going to turn over to Mr. Fong and then we're going to take any other comments questions from the Committee.

Thank you, Mr. Chair. I'll just jump right into the broad framework. So I'm looking at I believe is the Department of Finance's multi year forecast for this final agreement. And it shows actually higher deficits going out than in the May revision. So I'm looking at a $17 billion deficit in 23-24, an $18 billion deficit in 24-25, a $16 billion deficit in 25-26, and then a $15 billion deficit in 26-27. So it's understanding the LAO's analysis in previous versions of the framework.

This framework has structural deficits on the future, understanding there's reserves even though the reserves won't cover all of that over time. So can you explain to me just what the plan is moving forward?

Yes, it is not unusual to have negative... have deficits in the multi-year. I think the one thing that we would look to is that there is one-time spending in the budget year as well as in the multi-year that we would obviously have to look at bringing down to bring those numbers up. So that. We wouldn't have a deficit in the budget year as we proceed forward.

But I think not speaking for the LAO, the concern that exists is that this framework assumes very rosy projections moving forward. So with those projections, we're still looking at a deficit. So if the LAO is correct and if the revenue projections are closer to what they project, then wouldn't these deficits be bigger?

So, just a couple of things. I think one thing is we are anticipating revenues to actually go back to what is sort of normal. That's our normal clip. And so we have seen huge revenues in the past and obviously we made a lot of one time investments which you're seeing us pull down as part of solutions in this budget. Again, we have more one time in the future to pull down to help bridge those gaps.

We also have built in our reserves over $37 billion in reserves. We're actually 600 million higher in this package than we were at the Mayor vision in regards to reserves. And we also have language in this agreement that allows the Department of Finance to pull back on some spending in the budget year. So we're trying to build in both budget resiliency and acknowledge that in the future we will be able to bring down those one time costs and of course, look at potential other cuts.

But again, we have built a structure where we do have reserves and we are trying to mitigate the deep cuts that we had to make in the past, for example, in the Great Recession.

So let me just ask, since I cited the LAO, let me just have the LAO respond. I certainly believe that the projections are risky. I think the multi year forecasts are very concerning. So I don't know if you share those concerns or if you want to update your analysis based on what is in this agreement.

Yeah. Mr. Vice Chair. Gabe Petek. What I can say about it. I don't know a lot about the details in the shifting of the numbers from the earlier versions we saw compared with what we have before us here at this point. That being said, just to comment a little bit on the revenue outlook, so as you correctly pointed out, our revenues are lower, our revenue estimates are lower than the administration's, particularly in the budget year.

I would note that throughout the multi year, actually, our revenues recover at a somewhat higher rate than the administrations, but then we also have higher estimates of baseline spending. So the out year budget problem is notable, in our opinion, and we would agree with what Ms. Li said, that there is a significant amount of one time spending, particularly in the budget year and the couple of years after that.

That, we think, would be a first place to look to address bringing down the expenditure level, to bring it closer to what we think revenues will be in those years. But of course, we've always said there's a lot of uncertainty around the revenues. Sure. Without saying.

And I think That's the concern is that there is uncertainty. And if recession occurs or if we have a continued slowdown, I think That's something that we're going to have to reevaluate moving forward. The big question, I guess one of the surprising things in this framework is this resurrection of the Industrial Welfare Commission. This proposal was never in any budget Subcommitee, was never any Budget Committee hearings, was not even heard in policy. So maybe to the Department of Finance. How did this proposal come into being? And what is the motivation or rush to put this in place? Is there anyone that can answer that question?

Mr Fong, Christian Griffith with Assembly Budget Committee. You are aware that the Industrial Welfare Commission has been part of the code since 1913 and was defunded in 2004 as part of a legislative action. But in that defunding, there was nothing to prohibit the Department of Industrial Relations from reconstituting it. They could transfer funds to do that at any time.

Sure.

So essentially what you see in the budget was we basically put some provisional language around what would happen for money for the Industrial Welfare Commission.

I guess That's the question. And maybe this Commission has not been in existence, hasn't been funded for a couple of decades. So how did it get resurrected?

Andrew March, Department of Finance So, as you note, the Industrial Welfare Commission was defunded in 2004. However, the Commission has existed since that time. Statute has not been changed, and the Labor Commissioner's office is able to enforce the existing wage orders. So this budget would provide some specified funding for the Industrial Welfare Commission to essentially restart examine some industry specific wage orders that meet certain criteria that are in the Budget Bill language.

You've explained to me what it is. No one has explained to me why it's being resurrected. The Legislature has enacted hundreds of labor and employment laws over the past 19 years, and it hasn't used this Commission. So why now? And actually, it was the Legislative Democrats who defunded this Commission. So why is it being resurrected and for the first time here, being hurt?

Mr. Fong I'll say that we did, in Subcommitee four, have conversations about the need to do more labor enforcement, and that being a priority that was discussed in a variety of ways, and I think this is consistent with that discussion.

All of a sudden, this Commission, after being defunct for 20 years, is now necessary. I'm just trying to understand there's $3 million for this. It came out of nowhere airdropped into this framework. It's not been heard in any Committee that I'm aware of. And maybe it was heard one time in sub four, but I'm just trying to understand the impetus, like why I understand it exists.

It hasn't been funded for 20 years, and in the middle of a deficit, I don't know why we're actually putting money into a defunct Commission. You would think you would have left it defunct and just use the existing authority within the Labor Commissioner.

Again, I would point to just the fact that it was brought up in Committee and so it was part of the overall discussion as part of the deal.

I don't think this necessarily passes the smell test, but I have serious concerns about this proposal, especially with not a lot of questions and not a lot of input from Members on both sides of the aisle about this proposal. I will ask one small thing in terms of there's a provision in this trailer Bill about EBT fraud and theft. I think in the BCP, the Administration was estimating $11.2 million in General Fund costs due to fraud.

There was some money to try to move these cards to be chipped, and then I think there was funds to reimburse counties for stolen money. And I think there was a number of arrests for folks that were stealing EBT benefits. Can someone give me an update in terms of what's happening and why the General Fund is reimbursing for theft if we can prevent it?

Tyler Woods, Department of Finance I don't have specific details on some of those scenarios you just laid out, but what the proposals are in this budget are related to some federal funds we can draw down to do some of that reimbursement. And there's actually between statute and a recent court ruling in the last two years requires the General Fund to reimburse for that fraud.

Okay. I just want to point out that this is fraud acknowledged by the Administration that benefits are being stolen and we are paying double. We're paying the benefits back, and now we're trying to recoup the fraud. So I think this is something that we need to really highlight. Jumping to the higher education trailer, Bill. Thank you for that. I believe there is funding for expanding nursing programs within the community colleges. It's $60 million per year starting in 24-25. My question is, is that ongoing and how will that funding be targeted in terms of which community colleges?

Sure, I can confirm part of that. It is $60,000,000 one time, Prop 98 General Fund for five years, starting in not budget year, but the budget year beyond. Mr. Ferguson can help with some details.

Chris Ferguson with finance. So that it's 60 million per year for five years. So a total of $300,000,000 one time to support these programs. I believe it is pursuant to pending legislation in terms of how those funds would be deployed.

Okay, so it's $60 million over five years.

It's $300 million over the five years. So $60 million.

$60 million a year. Okay, so one time.

Yeah, $300,000,000 one time, but it's limited term.

Got you. And then the Legislature will determine the criteria and the eligibility of that funding.

Yeah, That's correct. It's subject to pending legislation that would be reviewed and considered next year. We would add, though, that there is an existing nursing program in the California community colleges. So I don't know if that legislation will look at that existing program and maybe enhancements or to something else, but certainly it's pursuant to pending legislation.

Okay, thank you. Staying in the higher education space, but I believe this was an SB 103. There seems to be a General Fund shift of $500 million of UC CSU capital projects to debt. Can someone explain to me why that decision was made? It certainly puts the state on the hook for more debt service.

So the structure of what we put forward is that local community college districts, UC and the CSU would put forward revenue bonds to support the affordable student housing projects, with the state providing support for those projects to UC, CSU and the community colleges. Certainly we recognize that there's some risk there if the state were to choose not to Fund that in the future.

But we do believe that the state's multi year has these funds in there, and this is a way to enable a freeing up of resources for other particular or General purposes within the overall budget construct.

Mr. Fong, I would just add that is a pattern that it's not just in higher education, but is also general capital outlay where we were putting out General Fund to pay for projects. Still recognizing the importance of building those projects, but also recognizing the fact that we don't have the General Fund to upfront pay. So instead moving to bond structures.

Sure. I just wanted to make sure that we recognize that this near term potential budget solution has potential negative fiscal consequences for our higher education system in California. So I wanted to make sure that we acknowledge that. Certainly I have concerns about that.

I would say as part of the right, our agreement is that we're paying for the debt service. So we're not saddling the higher education students, higher education institutions for that.

So effectively, we're not calling it debt service, but we're certainly providing resources to support those projects at the universities so that they can maintain the affordable rents. Effectively, the resources we provide will enable the systems to maintain those affordable rents.

Sure. Thank you, Mr. I think, of course, that highlights also the General Fund risk into the future, too, looking at the multi year, if we're going to incur debt service into the future, I know other Members will ask about MCO tax. I just wanted to ask just high level, what reimbursement rates will be increased, when will they go into effect, and how long will this what is the spending period?

Andrew Duffy, Department of Finance thank you. Andrew Duffy, Department of Finance For the reimbursement rates, there are primary care, obstetric care, and also non specialty mental health, which go into effect January 1, 2024. Subsequent legislation that will be submitted to the Legislature as part of Governor's Budget next year will include additional investments. That term sheet has been shared with the Legislature. I'm happy to go into that if you would like.

In addition to the reimbursement rates, we also have $150,000,000 one time loan for the Distressed Hospitals program, $50 million in 23-24 for the Rural Seismic Hospital program, and then also starting in calendar year 2024, there are $75 million for the graduate medical education.

In terms of the General Fund, part of it, how much of the revenue will be used for the General Fund over the life of the MCO tax?

So over the period of the tax, $8.3 billion will be used to support the medical program. The funding stays with the MediCal program.

Okay, but do you dedicate it to the MediCal program or you're just saying that? Is there anything in there that says it's the dedicated medical program?

The savings is reflected in DHCS's budget.

Okay. And then in terms of the services and the providers chosen, how did you come up with that? I mean, there are certainly a lot of needs in the provider space, the optometrists and other providers. I'm just trying to understand, moving forward, there's been the talk of a stakeholder process and the collection of data. Has that been chosen out to the future, like the provider rate increases out into the future? Has that decision been made or is there actually a true stakeholder process moving forward?

So the investment support DHCS is comprehensive quality strategy focusing on specific investments in provider types such as children's, preventive care, maternal care, birth equity, and behavioral health integration. As previously mentioned, there have been certain provider types that are within Assembly Bill or Senate Bill 118 that will go live January 1, 2024, and the Administration will come forward to the Legislature as part of the 24-25 governance budget with subsequent investments.

So there's a five year allocation. Have those stakeholders been chosen? Have those providers been chosen? Or will there be input from other stakeholders to say, hey, we want to make an argument of how we could benefit from a rate increase?

The term sheet provided to the Legislature has categories of investments primary care, specialty care, community and outpatient procedure services.

So those providers not in that sheet don't get a rate increase.

The Administration will be coming forward as part of the 24-25 Governor's Budget with additional investment requests.

So it's pending pending or is it done?

It's pending.

Okay, you hesitated there, so I'm going to hold you to that. In terms of jumping to SB 120, this Bill removes the requirement that agricultural products purchased through the California Fruit and Vegetable EBT pilot program be California grown. Why was that requirement removed?

Hi, Nicole Vasquez with Assembly Budget it was told to us that the pilot operators currently receiving the funding, that this was unnecessarily restrictive for them, that communities that are not near farmers markets or places that have California grown food did not have access through the pilot that is intended to give them access to the Was.

So it came from the program. The program itself didn't get enough fruits and vegetables from California farmers.

It was the program operators and the nutrition advocates who requested that the pilot be extended and funded.

Right, but you removed the requirement that those products be from California. So why was that done? Is that from the providers?

That's from the providers and from the nutrition and food advocates who championed the proposal.

They wanted it removed.

They did. They absolutely did.

Okay. I'll give credit to the chair on this question. Will they still prioritize California products?

That was not specifically stated in the language. We removed the California grown notation and the definition in the language, which allows for the Department to work with the grantees to decide how to do the distribution.

Well, that might be a question I'll have for them when they testify before the Subcommitee again and why they removed it. Maybe they should prioritize California products, which I think the Legislature has been on record for that to happen to Developmental Services, SB 121. Maybe this to Department of Finance. Part of the Rate Study also negatively impacted some service providers. And I know that DDS and Regional Centers have been working with local providers that would see a reduction in the funding. So does this Bill guarantee that local service providers not lose funding? Is there a baseline that they'll get?

I can respond to that as well. Nicole Vasquez's, Assembly Budget yes, we did incorporate a baseline fix in the DD trailer Bill to allow for no provider to go below what they were prior to the implementation of the Rate study. So we did include that.

Perfect. Thank you very much. Jumping to SB 122, the public resources, does this Bill change the boundary area that would require mitigation to address the impacts to Joshua trees? And what are those new boundaries? Did Rebecca just leave? Can someone else answer? I know you don't like to, Mr. Bonham, welcome to the Budget Committee.

Good evening, Committee Members. Chuck Bonham, Director of the California Department of Fish and Wildlife. Mr. Fong, in response to your question. Yes, but Yes. If I can imagine the map in my head, a technical correction cleanup was made on the boundary, which previously was 58 running west through Bakersfield to five down to 99. And now the boundary runs 58 west to 99 and down. So you basically have an upside down triangle from 99 to five, which is above Tahoe Ranch, the west side of Bakersfield. That boundary change does not prohibit development, does not take away the opportunity for parties to opt into the In Lieu fee payment program. It just shifts the fee from the lower amount to the higher amount. let me finish, if I could. There are no trees in that triangle. And the habitat suitability maps indicate there are not trees in that triangle.

So that begs the question, if there are no trees in the triangle, why are they there?

To correct the boundaries using the roadways, which is the typical description form used in the Fish and Game Code. And there I'd also refer any questions on why the change was made to Assembly staff.

Sure. I'm just pointing out the fact that you've said that this leads someone to a higher mitigation fee, but you also acknowledge the fact that there is no trees, no Joshua trees in this region. So the fact that this area is drawn into this boundary makes no sense if there are no Joshua trees in that region.

So Assembly Member I would direct the technical cleanup question also to Assembly staff. And then I'd say I'm just super thankful we're here because this was a super contentious issue in Subcommitee with a competing policy Bill submitted in the Assembly which has now been reconciled for a great outcome for business certainty, development and conservation of iconic trees.

I think I asked you this question in that Subcommitee, but let me just understand what's happening now with this new trailer Bill. So, critical resource recovery operations which provide the essential materials used in public infrastructure, renewable energy, housing projects within and outside of the environmental justice communities are subject to the Surface Mining and Reclamation Act, known as SMARA.

And this requires an operator have a reclamation plan that requires restoration of the land to a future beneficial use by requiring mitigation for a species that the Department's own independent group of scientists say is not threatened. My concern is that these operators are unfairly subject to additional mitigation for Western Joshua Tree compared to other commercial operations who have no reclamation obligations. Did you want to sure.

Assembly Member Fong this is an innovative approach to balance the preservation of iconic trees across almost 5000 sq mi and for the first time ever create an in lieu opt in program for development. This is an example of California balancing all its values for those projects that already have legal entitlements. And I think you're referring to aggregate mining. There's a pathway for those projects to exist under their current law approvals as well as any expansions, but those are the added costs.

Assembly Member this is against the backdrop of a potential listing under the California Endangered Species Act of Western Joshua Tree, which I would argue would make it more challenging for development than the innovative solution that's been discussed across both chambers and with the Administration.

I won't let Mr. Ben, our sub chair, answer. I would offer that this Bill had a competing Assembly Bill. As the Director pointed out, this Bill was vetted very thoroughly and I feel confident that the questions that you're asking sort of pose it as a black or a white. Your first question being well, this is going to cause more cost. And if they list a species altogether as an endangered species, it will certainly cause more cost. This will cause more cost, but with much more flexibility.

And given that California is facing climate change, there is probably some places where the species is no longer going to be viable, but other places where we have to invest significant resources to make sure it stays viable. That this is an innovative and the kind of plan we need given climate change coming and the old either you do it or you don't do it sort of major classification side of it is in this situation it's not as healthy.

I appreciate the answer. I'm just saying to everyone here that this has never been done. The concerns I raised in Subcommitee was that what were we going to do for operations in already existing areas and under the backdrop as well that the department's own independent group of scientists say that this is not a threatened species. So I'm just outlining the concerns that there is going to be impacts to housing, business operations, renewable. I won't speak for my colleagues in Lancaster Palmdale.

They might have some other questions as well, but I just wanted to outline those concerns. Moving on, I'm short on time, so I just want to be very quick in terms of I ask this question all the time and Christian knows, but there is no additional funding for above ground storage. Just want to make sure that I understand that correctly.

Correct

It's not a Budget Committee hearing until I ask about water and the lack of investment by the Legislature and the Governor. In terms of the energy trailer bills, I'm trying to understand the ratepayer impact with DWR being the central energy procurer. What is the impact to the ratepayer.

This is Shy Forbes from Assembly Budget. That proposal is not in these budget trailer bills.

Which is not in this one. Okay, in any of then jumping to my next question in terms of this Commission to look at gas prices. Talking to energy experts right now, domestic production has declined precipitously. The amount of imports coming into the State of California is at capacity. So there's a delta that is not being replaced and so there is warnings that we're going to see a gasoline shortage in the summer. So does anything in this Trailer Bill address that and what is this new Commission going to do with that shortage?

Eamon Nalband Department of Finance So to the Member specific concern, I don't think any of the Trailer Bill changes addresses that particular concern. The overall Bill does vest CEC with new authorities to look at what refiners and the fuel market producers are doing. So being effective this past week, we would expect that CEC can go in and start requesting some of these data.

Well, I hope the CEC will look at the gas tax increase going up in next month. And I hope they will look at the fact that we're going to have a shortage, that every energy expert has warned us this summer. And when gas prices go up, I hope this Energy Commission will be honest with why gas prices going up and the imbalance of supply and demand.

The only other question I have in terms of public safety is my understanding that there's intent language for new prisons to be closed. I have concerns about that but has there been any communication with any local communities that are potentially impacted by or have any of those prisons been identified?

Jennifer Kim with the Assembly Budget Committee. There have been no prisons identified for that piece of the trailer Bill. What it requires is for the Department of Corrections to provide an assessment of its current capacity that's needed to meet its operations rehabilitation goals. And so we're waiting for that preliminary assessment That's due August 15 and then a final assessment in November to inform these discussions.

Okay, thank you so much. I appreciate the Chair and the Committee's indulgence for all the questions I had. Again, I'm concerned about the sustainability. I'm concerned about the multi year deficits. I'm concerned about the process, especially when there are proposals in here that I think Members of both sides of the aisle have not vetted. So I'm serious concerns. Thank you.

Thank you, Mr. Vice Chair. As I stated before, we know that the budget in the future faces a significant amount of uncertainty. It's also why we've set our budgets to significantly focused almost 80% of our additional spending, or ongoing spending is very much focused on one time spending that we even this year have started to spread out in the future. I imagine if times get tougher in the next year or two, we will continue to push some of those items out into the future.

Or look at debt service. Debt service allows, again, critical housing to be built at our universities, which is needed today, but allows us to pay for it over time. No different than how we would take out a mortgage for our homes. If we had to buy a home all cash, it'd be, for almost all of us, completely unattainable. But being able to finance it allows us to be able to buy our home today and really secure our future for tomorrow. So, let me see. I'm looking for other Members of the Dais. Mr. Alvarez.

Thank you very much, Mr. Chair. Thank you all for the response to the questions to now. I'm going to try to go through this. I made notes. See on SB 102. Item 21 in the analysis refers to the teacher residency grant program. But I also know there was the golden state grant program.

I'm curious whether either of these changes the requirements to serve in I don't remember what we're calling the schools, whether it was Low income or special needs or I think you probably understand what I'm referring to, but there was an attempt to eliminate the requirement to serve at high needs schools. I think That's the name was. Is that what is included in the language today or not?

Erin Gabel from the Assembly Budget Committee. So, changes to eligibility around the schools. No changes were made in the trailer Bill for either program. However, we did make an augmentation to the Golden State Teacher Program additional Idea funds so that we could recruit more special education teachers. And additionally, for the teacher Residency program, we added preschools as an eligible employer of those residents. And we also authorized a new Diverse Educators Administrative program. So it'll be an add on to the teacher residency program, specifically around school site administrators for diversifying that workforce.

So I was going to ask about that one. It was item 65 in the noted in the analysis, is the requirement for that program on the administrators also for high need schools?

Correct.

Thank you. Appreciate that. Item 34 is related to the LCAP reporting and requirements. This is now being instituted into not just the equity multiplier schools, but for all schools. Correct. It's when a school or a district subgroup isn't meeting standards. Does this language cover all schools or just the equity multiplier schools in terms.

Of the changes for the goals? For the goals, right. For the goals and for the actions, those were for all schools. There was a specific subset that was for the equity multiplier school. So I can get back to you with the specifics.

Okay, thank you. On the issue of the reading assessments, I know that bilingual educators in particular had some concerns. What is the language in the Bill today as it relates to children who are English Language learners and not being misclassified and making sure that we have experts from the bilingual community on the advisory panel or board that's going to be making recommendations on this.

So in the final package that we adopted, it looks very largely like we saw in the language for the May revision. We've been working with the Administration on insurances that there will be experts appointed by the State Board in order to serve on that panel in terms of addressing the concerns of our dual language acquisition community, English language learners, advocacy organizations.

And I know you have on that. I'd ask the Administration if you have a response to the commitment to ensuring that English Language Learners are assessed appropriately as part of this program and that we have experts that understand this issue, help us advice on this going forward.

Yeah, certainly we have a commitment to work with the State Board to make that happen, as well as a commitment to look at holistically at the language That's being moved forward. So if we need to make an adjustment in a future year, we certainly could. So we have that commitment. But as it stands, the language that we put forward at the May revision is largely what you see before you today, and that is the sort of crux of what Ms. Gabelwas saying.

Okay. Appreciate that response on item 60 in the analysis as relates to the arts music material discretionary block program, something very important for myself and I know for a lot of advocates. There was a recommendation by the Administration to, I think, cut that roughly in half. It looks like now $200 million less than the $3.5 billion previous commitment. First of all, is that correct?

Yes, that is correct. That's the reduction.

I know there were concerns by school districts on commitments that have been made. And I know the Lao's office had raised this by commitments that have been made to already expend those dollars. Do we believe that the 200 $1.0 million reduction will not jeopardize any of the materials or grant programs?

Yes. So the decision around that reduction, it was made a priority in the three party deal to try to mitigate reductions specifically to that block grant because of the concerns that we heard. We took that reduction in consideration with the increases that we will be seeing in the budget year for school districts for Proposition 28, specifically for arts funding that would not have been on their spreadsheets when they had adopted their multi year spending plan for the Arts and music block grant last year.

So we do believe with the almost $1 billion increase that schools will be seeing in the budget year of General Fund specifically for the arts, they will be able to accommodate the five year over the five year ability timeline to reduce what they would have obligated the 200 million for.

So you think Prop 28 will cover? I think That's what I'm understanding will cover the potential $200 million.

We believe that it will more than be able to make up for the fact that that reduction had to be made in order to accommodate the one time surplus reduction.

We're not concerned that then that violates Prop 28 Language, that it must not supplant, but supplement existing arts funding.

Yeah, That's correct. We don't believe that that violates the terms of Prop 28. That supplement, not supplant provision is a local provision around local spending. So to the extent that they have not utilized those resources, they would not have a cap that says spend more than this level. And we know that many districts throughout the state were planning to expand those roughly 3.4 billion over a multi year period.

Okay, thank you. I have a question on the next budget Bill, which is on childcare, just to be clear, the increase or the family fees that are being waived, is that for one year or is that multi year?

So there are layers to the family fee proposal that we've had over multiple budget acts. The Early Action package that we adopted earlier this year continued the waivers from the COVID era of all family fees until they wouldn't go back online until October 1 of 2023. What SB 116 does is that once those family fees from Early Action were to come back online, rather than them coming back online at a 10% of family income, they will come back online at only 1% of the family income. So there'll be a significant reduction to the burden on families inside the family fee system for all childcare programs and preschool programs.

Okay. Is there anything you'd like to add? You're excitedly walk up here to the microphone.

No, I think Ms. Gable covered it.

All right, thank you. Let me ask about on higher education item number 17 in that Bill. Los Angeles Community College District, small Business Entrepreneurship and Innovation Center in East Los Angeles. I don't remember seeing this proposal before. Is this new or was it there before and I just missed it?

It's been there since the May revision.

It's been there since the May revision. Okay. And how many individuals are going to be served by this program?

So I don't have a specific number for that particular program. What I can say though, is this was a request of the district that was certainly on a caucus list and a caucus ask as well.

Got it. Thank you. While I'm at that, are there any additional items in higher education or education that were not in the May revision that are now in this final or in this version of the budget from the administration's perspective?

Largely there are some certain increases that were agreed to as part of the three party deal that were reflected in the two party deal. I would know those range from COLAs on existing programs at UC and CSU, whether That's rapid rehousing, basic needs programs that they operate. So several of those programs.

There are also several individual campus investments that were put forward anywhere from $5,000,000 one time this year and 3 million ongoing for the Bunch Center at UCLA, I believe there was $15 million to support Cal State University, Dominguez Hills, that was included. So there are some various investments that came from the two party agreement that have rolled forward, but certainly all have been reflected.

The one that comes to mind that was slightly different from the May revision and the two-party agreement is the firefighting research that was provided. Funding that was provided to the University of California was 5,000,000 one time in the two party agreement. That's been increased to 7,000,001 time in the three party agreement.

So Dominguez, Hill, UCLA, those were reflective of an agreement with the Legislature, not requests from the Administration.

That's correct. There are several that came from the May revision. There are also several that came out of the two party agreement.

Thank you. Appreciate that. Can somebody speak to the enhanced LPS Act data and reporting and what that would mean on the ground for the issue of LPS? I know this is an important issue, sort of related to Care Court, but not exactly Care Court, so I'd like to hear what we think that this is going to help us achieve.

Leonard Ramos, Department of Finance. Apologies for the delay. So the LPS language is intended to be able to address gaps in reporting that we had previously identified. It was part of the Mayor revised proposals. If you have specific questions we might.

Be able to address that I just like to understand. So what do you believe the data and the reporting will help us do better accomplish, as it relates to these programs?

The goal of being able to address or gather this information is to be able to collect the data at a statewide level and be able to analyze that and be able to report on a statewide level.

Would future investments in programs be aligned to that data? Is that the intent at this time?

There's no intent to build in additional dollars. However, we'll be monitoring the data and proceed as needed.

Okay, thank you. I have questions on the transit Bill. I guess it's 125. Specifically, the Transit Transformation Task Force is being given the responsibility of putting together a report on improving and growing transit ridership, and it's got a requirement to bring a report back to the Legislature October 31. But there are significant investments being made in what I hear from everyone on one time investments for transit, particularly in the Bay Area. October 31 is after next year's budget deliberations.

What is the thinking behind this deadline of October 31, and how will that information help us move forward with future transit funding if it comes after budget discussions?

Thank you. Steve Wells of the Department of Finance. As part of the overall policy of the funding That's been provided, the $5.1 billion that is allowable to be flexible to address the current fiscal situation, there's sort of multiple hits to this. In the first year, we're looking to get information from in order to use the first year money.

We're looking to get information from the regional transit providers that will provide us basically how are you going to use this money to stay afloat, and what are some of your potential plans? Are you going to use this money to support operations, or is this money going are you okay on operations? And to what degree you can declare then that you don't have an operational need?

In the second year, the information requirement bumps up a little further in order to get this funding, and that requires updates to their plans, and it requires everyone to provide data and information regardless of whether they have declared a need for operations or not. All of this information is then going to be used by the task force to basically deliberate on a whole wide range of options that need to be considered as we move forward and as all the transit operators then develop long term plans.

And so the hope is to have the task force be able to supply information to the Legislature That 's in time for then implementing these long term plans. We struggled. It would be nice to be able to have something sooner. But at the same time, we needed to have the time for the task force to work with all the regional entities, all the advocates, everyone who has a say in this and to make sure that we come up. With a plan That's forward thinking.

And that helps make sure that as we move forward, we have more than just plans for capital, but we also have plans for operations to support that capital.

Thank you. I appreciate the response. I've learned in your response then that not all of the 5.0 correct me because I might have misunderstood. Not all the $5.1 billion that are being quoted as being used for the transit agencies that have this fiscal cliff that they're facing will be going out in the current year. This is a two year allocation and the second year allocation is based on the information they provide during this next year.

Correct. There's a progression in the information That's being supplied. We consider there's a short term plan and then there's another short term plan That's an update of the first one that will then have a few more requirements on it. And then there's a long term plan That's required. And the long term plan kind of syncs with the culmination of the opportunities that are going to be provided by.

Having the task force and this specific report or process will be made public. Okay, appreciate that.

And I just want to clarify this. So it's, again, two buckets, right? $2 billion this year, $2 billion next year. And That's TIRCP money, which is capital money. Part of that. That money will be going out by population. So it's by population, not ridership, but population. There will be an allowance of some flexibility for operating, but they have to come back and tell us why they're using it for operating. The $1.1 billion, I believe, is over.

It's a four year period that was originally set aside for clean buses and clean transit, and that will be allowed to be flexed instead of doing it as a grant program. It's going out by formula, but the formula will be used by ridership. So not population by ridership. But again, we've agreed to continuously appropriate that over a four year period. Is that correct?

Yes. That was very good. The 1.1 billion is going out through a mix of population and ridership. Got sort of the traditional Sta formula, but all the other stuff was ridership.

Thank you, That's very helpful. But just to clarify, is it all transit agencies or is it just specific transit agencies?

It will be going to the regional transportation agencies that then under sort of the current situation or the way all of the funding that flows to the regions that then those regional transit agencies statewide within, but statewide.

Statewide, correct.

And the TRCP will flow to them through the population formula. And the 1.1 billion ZEV funds will flow through the standard state transit assistance formula.

Thank you. Appreciate it. I think I'm down to my last couple of questions. I just read about emergency sleeping cabins. This is something That's new to me. It's from another Subcommitee, I assume. 1200 emergency sleeping cabins, potentially by the Department of General Services. Can you tell me more about this proposal and just when we expect these and where we expect these cabins to be?

Natalie Griswold, Department of Finance. So this trailer Bill Language allows the Department of General Services to install emergency sleeping cabins or small homes in specific local jurisdictions that have partnered with the state. This is the City of San Jose, the City of Sacramento, the City of Los Angeles, and San Diego. County.

So you have existing agreements with these entities, agencies to do these programs?

Yes. So the Department of General Services is currently negotiating agreements with these local governments to complete these small homes. Essentially, the Department of General Services will build the homes, and then they will transfer ownership and operation to the local governments.

Thank you. I'd ask you to get me the information of the locations in San Diego, County, please.

Yes, I can follow up with your staff. Thank you.

Appreciate it. I believe that was it for me. I think the only other General question that I have is related to the concerns on the long term viability of a budget structured this way. I've asked this before. I just want to confirm we're not utilizing any of the safety net reserves for this budget.

That's correct.

We are doing loans from other funds, though, in this budget.

That's correct. The General Fund is being lent money.

Then the funds to build the housing for the universities and the colleges, those are 0% interest loans, is what we're putting out as a product. That's what I read in our analysis.

Mark Martin with the Assembly Budget Committee. There are two student housing programs. One is the grant program, and then one is the revolving loan Fund program. So that revolving loan Fund program is 0% interest loans.

And That's what, according to analysis, That's what the UC, CSU, and community colleges will be using to build housing.

Well, they'll be using both. Yeah, they received there was some grant funding last year, there's some funding this year That's all being converted to UC CSU community college bonds. And then the revolving loan Fund is at the state Treasurer's office, and that will be distributing 0% interest loans for future projects for all three segments.

Got someone rushing up here. Maybe last comment, if it's helpful.

Of the two programs, there's roughly 2.2 billion in the affordable student housing program that was converted to local bonds, with the state providing support to the segments to support those projects. And then there's roughly 1.7 billion over the multi year that would support the student housing revolving loan Fund that would provide the 0% interest loans to the segments to complete projects.

Thank you very much. Thank you all for your work.

Appreciate it. Thank you, Mr. Alvarez. We're going to go to Ms Assemblymember Rivas and then Assembly Member Carrillo.

Thank you, Mr. Chair. I just wanted to make a brief comment in support of the film tax credit that is proposed in one of these trailer. Know this film tax credit, I believe, is a good investment for job creation and retention. Especially in the Los Angeles region. The Los Angeles County delegation Members, we all voted in support of this within our delegation and sent the message that this is something That's very important for the LA region. We want to keep the jobs in our area.

And I'm very excited that the proposed tax credit, besides being extended, helps with runaway. Know states like Georgia, New York, Texas and New Mexico are creating very competitive programs that are challenging California. And most people from this industry, this is the home of the film industry in the world and they want to stay in California. They have their families here. They want to work in California and we want them to stay here. And I appreciate the commitment to diversity, increasing diversity within this program.

And I want to thank our budget sub board chair and a Los Angeles Member, Wendy Carrillo, and other LA Members that really contributed and made sure that this was a priority for our LA delegation. So thank you.

Ms. Carrillo .

Thank you, Mr. Chair. And first, let me just say a big thank you to all of our Budget Committee staff for all of their incredibly hard work and dedication in ensuring that we have a robust budget that is a reflection of the continuous and ongoing conversations and negotiations. But we have been through through hours and hours and hours and hours and hours of hearings commencing in January up until now.

And it takes a lot of work and dedication and commitment to this particular type of work to ensure that we are being as responsible as we possibly can with our California State budget and ensuring that communities at the end of the day, are seen elevated. And really, there's a commitment from the Legislature and the Administration to deliver for the people of California. There's so many things to comment on. I think the biggest crisis that we're facing is housing and homelessness. It's a continued conversation.

There has to be a way in which we continue to merge different subcommittees that have different jurisdictions upon the issues related to our unhoused communities across California. Not only on the importance of creating and building more housing and what that looks like and ensuring that the counties and continuums of care have resources.

But also with my colleague, Assembly Member Arambula, with issues related to mental health and additional resources on health care, our colleague, Assembly Member Bonta, issues related to enforcement and what that looks like for individuals who need support and additional resources as well. And so we have all spoken about the necessity to have cross sub budget conversations on this issue because sometimes the conversations happen in silo.

So I think That's an incredibly important step that we're all taking and having Subcommitee hearings jointly on various different issues that we cross upon. So thank you for everyone's commitment on that. I do want to echo the sentiments of our Los Angeles County delegation chair, Assembly Member Rivas and the importance of the California Film Tax Credit program. So this is the 4.0 program.

We have done a lot of work in ensuring that the new standards, so there are set safety supervision standards, especially after what happened on the set of the production rust, that there are refundability components to ensure that more of the Member companies are able to have access to these funds.

We are moving forward with a $330,000,000 program that ensures that California is competitive, that we continue to lead in this industry, that we have the assurance that these very good union jobs stay in California, specifically impacting Los Angeles County and the City of Los Angeles. The revenue and economic input that the film television tax credit program provides to the State of California is unmatched. It is billions of dollars in economic input that we receive from having this very important program in the state.

The diversity components continue to be highlighted across various different conversations. I'm very proud of the negotiations that we have moved forward to ensure that as the program continues to be successful and move forward, that below the line and above the line workforce plan are part of the conversation. We did a really robust program with the new Sound Stages program that we allocated two years ago that ensured that we are moving forward with diversity and workforce plans.

I'm proud and very supportive of the measure that we have before us now, which starts all productions at 96% of the allocation, which allows for all productions to be able to receive an additional 2% below the line. 2% above the line to reach a 100% level of credit allocation with an annual report by the California Film Commission that will let us know which of the productions were able to achieve that goal. Because everyone says they want to be a part of the solution.

We're going to be able to have some accountability and transparency measures to ensure that That's the reality and the goal that we all hope to achieve. And lastly, ensuring that we have one additional position with the California Film Commission that would allow for an expert on equity, diversity and inclusion to be a part of the conversations, as the Commission also creates new regulations and standards for all productions to be able to achieve the workforce development plans. This is a bold step for California.

It's an important piece for LA County. And as New York, Georgia, New Mexico, Texas, and various other states want to take production away from California and these jobs, it is incumbent upon the Legislature to ensure that we remind ourselves that the program started to stop runaway production.

It started in an effort to ensure that an industry that was born in California continues to thrive and stay in the state, and that these jobs and these productions stay here, as well as ensuring that we are creating additional opportunities for workforce development. So I'm very happy that the percentage that the productions are putting into the Career Pathways programs is increasing.

And there's an opportunity to ensure that these programs for workforce development that are highly successful at West LA College have an opportunity to grow at East LA College, at LA Southwest College, Admission College, and other parts across the State of California that have an interest in creating a workforce for the entertainment industry for, again, below and above the line and what that could potentially look like for the future.

We have worked really hard to ensure that we have addressed the issues, both presented by the Motion Picture Association as well as the Entertainment Union Coalition and the Legislature, to get to a good place and to get to what would be a very successful 4.0 program. So thank you to all the advocates involved and really appreciative of all of the Members that engaged in positive conversations about ensuring that this program stays robust and continues to thrive across our state. Thank you.

Thank you, Ms. Carrillo. We're going to go to our Majority Leader, Ms. Reyes.

Thank you, Mr. Chair. It's clear that when we look at our budget, it should reflect our values. And there are a number of sections that I'm very proud of that I get to talk to my colleagues about, that I get to talk to the community about, I get to talk to stakeholders about. But I want to begin with the California film Tax. My colleagues from Los Angeles have talked about this, but in fact, all of California benefits from this.

I know it's a direct benefit to my Los Angeles colleagues and to their communities, but the rest of us, I think, are beneficiaries of that part. Also, one of the sections that I'm very pleased with has to do with our childhood, early childhood education, specifically our childcare workers. For too long they've been having to work with no COLA increase, having to give of their own time, of their own money to make sure that our children are taken care of.

And for a long time we've been telling them, just wait, just wait. We're going to try to take care of this. And we didn't. And it's been so long since we have given these COLA increases. And I am so pleased. Although it isn't a complete deal yet and although it's considered a down payment, I'm just really proud of the work that has been done in negotiating. And I want to thank subchair Kevin Mccarty for his work specifically in that area and making that a priority.

I didn't know you were here, Mr. McCarty. Making that an absolute priority for our children, to make sure that our childcare workers do receive that recognition, not just in words, but in pay the family fees, also the waiver. And I appreciate that we've been able to work with the funding we receive from the Feds to be able to waive these family fees and now to extend it through the end of September and now we're including it out of our General Fund as well.

Very grateful for all of that. And I echo the sentiments of my colleagues thanking all the budget staff for your hard work and the fact that you make yourselves available when we need to call and say, what does this really mean? And should we be asking more questions? And you all have been so helpful to us, to my staff, who I know asks whole lot of questions so that when I get here, I hardly have to ask anything. All I have to say is thank you.

Thank you all for putting together Mr. Chair, Mr. Vice Chair, for your hard work in working with this, and to the Governor, to the Administration for putting in the effort. But may I say also, most especially to our speaker, Anthony Rendon, to the Pro Tem, Toni Atkins, also for their leadership in guiding us through all of this. Thank you.

Thank you. Looking back to the Committee. Any more questions? Comments? Okay, let's open up for public comment. Public comment. You can line up physically. You get 1 minute each.

Good evening. Justin Garrett, California State Association of Counties first, on homelessness, we are pleased to see many elements of the at Home Plan we've been advocating for reflected in AB/SB 129, specifically as a required regional collaboration. A comprehensive plan development and defined roles and responsibilities will help local governments make progress.

We are, however, disappointed to not see an ongoing funding commitment, as this will hinder our collective efforts to address homelessness on IHSS. CSAC is in strong opposition to the IHS collective bargaining penalty in AB/SB 120. This was included in the final budget agreement without being discussed at any budget hearings, with no public input and no consultation with counties. It will unfairly punish all counties, including those counties that have done the right things and invested hundreds of millions in wage increases over the recent years.

And so we oppose the ongoing 10% penalty. Finally for Behavioral Health, we appreciate the funding for Care Act implementation. I would still note that we don't believe it adequately funds behavioral Health and County Council costs, and we appreciate the removal of the repayment provision for the Behavioral Health Payment Reform, but are disappointed to see the state General Fund amount be decreased. Thank you.

Mr. Chair Members, Brendan Twohig on behalf of Ed Voice. We're in strong support of the Budget Trailer Bill language in both AB 114 and SB 114 requiring universal screening for reading difficulties and risk of Dyslexia in grades kindergarten, first and second. We believe it will improve literacy rates and opportunity for California's children for a separate client, the California Air Pollution Control Officers Association.

We appreciate the investments in the AB 617 Community Air Protection Program as well as the Farmer program, both very cost effective programs at getting both air pollution and greenhouse gas reductions, and we appreciate it. Thank you

Mr. Chair, Members of the Committee, Marc Aprea, here on behalf of ChargePoint, want to thank the Assembly, the Senate and the Administration for the provisions in AB/SB 123 specifically relating to the Budget Trailer Bill language, making California consistent with the National Electric Vehicle Infrastructure Program, in particularly the payment methodology. This will greatly enhance EV charger infrastructure reliability and reduce its cost. We encourage your aye vote on SB/AB 123. Thank you.

Good evening, Chair and Members, Adrian Mohammed with the Union of the United Domestic Workers of America, AFSME 3930, representing over 170,000 home care and childcare providers across the state, very quickly want to speak in support of AB/SB 102 as well as 116 and 120 relating to childcare and human services, respectively.

We appreciate that 102 reflects a commitment to both of our provider communities, including the 1.4 billion to supplement reimbursement rates for all subsidized childcare providers, as well as the 1.5 million to DSS to produce an analysis on transitioning IHSS collective bargaining from the county level to either a statewide level or potentially a regional approach.

We'll also highlight quickly that 116 contains several provisions aimed at stabilizing the childcare space, including the relief for family fees and the extension to hold harmless provisions of the development of an alternative Jesus alternative methodology for childcare reimbursement rates. Finally, going back to 120, we really appreciate extending the Career Pathways program as well as the 10% penalty. I know it was noted. Thank you.

Thanks. Chair and Members, Marvin Pineda, on behalf of the California Primary Care Association, The MCO Tax is providing a generational opportunity to Fund the medical program. We request that it must be clear that community health centers are part of this funding proposal. Considering the community health centers serve one third of the medical population, a majority of which are patients of color, we urge the Administration and the Legislature to make clear the community health centers are funded in the MCO Tax moving forward. Thank you.

Good evening, chair. Members of the Committee ... with the Electronic Frontier Foundation. We ask that the Legislature stay the course on broadband infrastructure funding as set out by SB 156. As passed in 2021, without any deferrals or cuts. SB 156 set forth an array of local efforts by businesses, local government, coops tribes, and nonprofits to deliver fast, reliable, and accessible connectivity to every Californian.

Any delay or cut would derail the years of planning these entities from across the state have made based on the premise and promise of these funds. Further, federal Bead dollars cannot be used as a substitute to the promised state funds. In fact, if California were to substitute state dollars with federal dollars, the NTIA would be fully within their right to withhold federal funding from California altogether, as announced about three or 4 hours ago, That's about $1.8 billion. $1.86 billion.

We have a once in a lifetime opportunity to bridge the to bridge the digital divide, create unprecedented economic development opportunities, and address systemic harms for generations to come. But only if we stay the course on broadband infrastructure funding. Thank you.

Thank you, Mr. Chairman remembers Matt Sutton with the California Restaurant Association. I'm here to oppose the provisions of AB 103 that deal with the Industrial Welfare Commission. The Industrial Welfare Commission has not been funded for 19 years and has not been up and running. This is far too important and they have far too much authority over the regulation of wages and workplace standards for all employers in your districts. And we think it deserves greater scrutiny and greater discussion. It appeared Saturday, and we would ask you to reject that.

Thank you, Mr. Chair, Members of the Committee, Randy Pollack on behalf of the International Franchise Association, and my comments are very similar to Mr. Sutton's where we are very concerned about how this language was dropped in about the IWC, the vast expansion of this. We think that there needs to be more transparency of it, and I would just say in answer to Vice Chairman's question, I think maybe this provision was put in to target a certain part of the franchise industry. Thank you.

Good evening, Mr. Chair and Members of the Committee. Matthew Allen with Western Growers Association. We would simply align our comments with those made by Mr. Sutton from the Restaurant Association similar concerns regarding the IWC language.

Good evening, Chair and Members Dani Kando-Kaiser on behalf of Amelia, a nonprofit provider of prison telecommunications and education services. While we were disappointed to see funding for the proposed pilot program as proposed by Senator Becker in AB/SB 134, we urged the Legislature and the Administration to consider funding of this pilot program to provide free communication and education services to 10% of California's incarcerated population.

As a reminder, this has the potential for significant cost savings for the State of California in three ways through reducing recidivism, by adopting significantly less expensive and more modern technologies, and by reducing service costs. As a reminder, California pays a $1.50 for a 1 hour phone call. The same phone call would cost $0.06 under the proposed services. In addition, the proposed pilot program would help the California Department of Corrections and Rehabilitation to align with the upcoming changes in Federal Communication Commission rules and regulations.

So, at a time that we're looking to save the state a lot of money, we believe a $3 million investment in this pilot is wise and urgently needed allocation. Thank you.

Good evening, Matt Lege. On behalf of SEIU California, we'd like to thank the Legislature and Governor for a couple of items. So first, we appreciate that AB 102 reflects the commitment to our provider communities, childcare provider communities with 1.4 billion for supplemental reimbursement rates for subsidized childcare providers and 1.5 million for the DSS to produce an analysis of transitioning from IHSS collective bargaining to a statewide or regional approach.

Also like to highlight AB 116 contains several provisions aimed at stabilizing the childcare space, including relief for family fees, the extension of the Hold harmless, and development of an alternative methodology for childcare reimbursement rates using recommendations from the JLMC between the state and CCPU. We also like to highlight the investments in the MCO Tax, which is really a generational opportunity to invest in the workforce that needs it desperately. And then finally, we also applaud the Legislature and Governor for taking a cautious approach and cautious and narrowed approach to reviving the Industrial Welfare Commission to lift millions of workers out of poverty. Thank you.

Good evening, Linda Nguy with Western Center on Law and Poverty, Related to Health. We support the larger and accelerated MCO Tax. Although disappointed, the triggers for continuous Medi Cal coverage for young children and share of cost reform triggers remain. We also appreciate funding for Covered California Affordability assistance, Healthcare Workforce and asset test cleanup language, but would have liked to see the comprehensive perinatal services program benefit extended on the human services side along with grace in child poverty.

We appreciate making permanent Cowworks grant increase, initiating the CalFresh Minimum Pilot program, funding Ssisp grant increase, maximizing the new Federal Summer EBT program, and not drawing down from the Safety Net Fund. However, we are disappointed that the Legislature's proposal to implement the first phase of reimagined Cowworks was not included. Despite UC San Francisco's new report that shows economic shocks are a key driver of homelessness that can be mitigated by reforming sanctions. We look forward to continuing to work with the Administration on this issue. Thank you.

Thank you, Mr. Chair and Members, Nick Louizos, on behalf of the California Association of Health Plans, representing the entities that are paying the managed care organization tax. Happy to say we're here in support of the MCO tax package and the associated investments in primary care, specialty care and graduate medical education.

Want to thank the Administration for working with us on a tax model that is as affordable as possible for our consumers, the Governor for the commitment to investing the revenue in Medi Cal, and of course, the Legislature for pushing for an accelerated timeframe for making those investments in Medi Cal. These are significant investments that are going to help with access in the program. So thank you very much.

Mark Farouk, on behalf of the California Hospital Association in support of the MCO Techs. We are pleased to see that revenue from the reinstatement of the MCO will be directly dedicated to enhancing the Medi Cal program and providing care to patients across the state. We look forward to working with stakeholders to ensure the investment and benefits in the healthcare system and patients comes along for years to come.

Additionally, we like to thank the work of this Committee and the Administration to dedicate additional monies for the Distressed Hospital Loan Program, as well as the 50 million dedicated to support the Small and Rural Hospital Relief Program for seismic assessment and construction. Thank you.

Good evening, chair and Members. Raquel Yoffie with the California Alternative Payment Program Association. We'd like to thank the Legislature for the multi year investment in childcare. Increasing rates remains our top priority as we are aligned with the ECE Coalition. We're extremely grateful for the family fee waiver holds harmless and single voucher type through September 30. We are also appreciative of the permanent waiver of family fees starting in October. We thank you for streamlining eligibility for families trying to access subsidized childcare.

Further, we applaud the actions supporting stable reimbursement for license exempt care and valuing their contributions to keeping parents supported and working. Finally, we are grateful for onetime funding provided for communitybased Alternative Payment Programs that is so needed to better support working with families. Thank you.

Good evening, chair and Committee, Dr. LaWanda Wesley with Childcare Resource Center. And I did everything my colleague Raquel says. As you know, many of the workers are black and brown women who do the work. So we applaud the Women's Caucus you chair team for all your work. Assembly Member Reyes, Senator Limon for all of the support and we still ask that you sort of keep the pressure up with the Governor as we go through negotiations because we know that we need permanent wage increases. And so as those negotiations take place, we just need your support and thank you very much for supporting our early care and education package. Thank you.

Good evening, Chair and Members, Michael Jarret on behalf of the Community Alliance with Family Farmers in support of the budget Bill and the budget Bill juniors, we would like to thank you for your protection of the investments at CDFA for the community food hubs, the urban agriculture and the beginning farm worker training. These are critical programs. We also really appreciate your investment of $5 million for the California Underserved Small Producer Program. This will provide critical flood relief for small and underserved farmers.

So thank you and have a good evening. Good evening. Chair Members, Dan Gluesenkamp with the California Institute for Biodiversity want to thank you and especially your hardworking staff for all you've been able to do and hopefully all you can do for intertidal biodiversity and coastal resilience. Our coasts really need it and penny spent today will save US dollars in the future. So really appreciate it. Thank you. Good evening, Mr. Chair and Members.

Adam Quinonez on behalf of the Association of California Water Agencies, also want to thank the Legislature and Administration for all of the work on SB 102 and AB 102 to continue to invest in water resilient projects throughout the state. In particular really appreciate the restoration of funding for multi benefit projects in the Sacramento San Joaquin Delta that will really help improve environmental conditions. Thank you.

Any other speakers in the public in the room seeing none? Operator, are you there?

Apologies, I said that on mute. Ladies and gentlemen, if you wish to make a public comment, please press one, then zero. We'll be going to line 68. Please go ahead.

Good evening, Chairman, Members, Tiffany Phan, first on behalf of General Motors, want to express our support for the inclusion of the Clean Transportation Program Trailer Bill. It's currently contained in AB 126 Rayes and to be amended into AB Two for one Rayes. Also on behalf of Sony Pictures Entertainment, want to express our support for AB 132, the film and television tax credit. Thank you.

Next, we go into line 70. Please go ahead.

Good evening. This is Katie Van Dines with Health Access, California. We are extremely grateful for the Legislature and Administration, including the proposed investments and cover California cost sharing of the 82.5 million in 2024 and double that in subsequent years, along with the safeguarding of future individual mandate penalty revenue within the Healthcare Affordability Reserve. This will help hundreds of thousands Low and middle income enrollees afford to seek care when they need it. Thank you.

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Good evening, Brooks, on behalf of a couple of clients. First, on behalf of the California Association of Public Hospitals and Health Systems, we want to thank the Legislature, the Governor and all of the staff for all of the time spent on the managed care organization tax this year. We are supportive of the proposal. The funding is a critical down payment to begin to tackle decades of insufficient funding and rising costs, emergency and patient services.

We also provide extensive primary, specialty and behavioral health care, much of which occurs in the more than 100 public federally qualified health centers. Next, on behalf of the urban counties of California and the rural county representative of California, we are opposed to the IHSS 10% penalty that was included in the Human Services Trailer Bill. This proposal was never discussed in any public hearings and we have several concerns about how this impacts not just social services programs, but health and mental health, too. Thank you.

Next, we'll go to line 101. Please go ahead. 101, your line is open. Hi. Yes, my name is Eli Zigas. I represent Spur and I'm just calling in support of the California Fruit and Vegetable EBT Pilot extension. This is a program That's going to help people address the hunger cliff while also supporting public health and California agriculture. I also really want to thank the Legislature for their support of the California Nutrition Incentive Program, a very similar program focused primarily on farmers markets.

Next, we will go to line 100. Please go ahead.

And lastly, the California CalFresh Minimum Benefit, providing that all of these are key and crucial to helping people at this time of intense hunger and increasing food prices. So thank you and look forward to that passing.

Chair and Members, Kathy Mossberg, representing Durham, California, a co sponsor of the CalFresh Fruit and Vegetable Pilot expansion extension, want to thank the Legislature for including this funding in the final budget package. As we hit a federal food cliff, any additional dollars we can get to Low income Californians to better help them get through this incredibly difficult critical time would be much appreciated.

To that end, want to thank the Legislature and the Administration for also including the CalFresh Minimum Benefit Pilot and the California Water Pilot expansion extension. Again, thank you for these investments for long term Californians to allow them to stay out of severe poverty. Thanks for your time this evening.

Thank you. Mr. Chair and Members, Michael Pimtel, Executive Director of the California Transit Association, joining you today to show thanks and appreciation for the Legislature and the Administration reaching an agreement on a robust investment package for public transit supporting transit capital and operations. I also do want to show our appreciation for the extension of the statutory relief measures through fiscal year 2526 will serve as a foundation for longer term reforms as the budget moves forward.

Next, we will go to line 90. Please go ahead.

We want to engage with you on implementation of the funding and also intend to engage with you to further inform the accountability requirements applied to transit agencies. And again, just thank you for your engagement with us in good faith on this effort. So thank you. Next, we will go into line 79. Please go ahead.

This is Mary Morton on behalf of the California Children's Hospital Association in support of the provisions in AB 1118 and SB 118 related to the California Children Services Whole Child Model program.

We want to thank the Administration for working with us to narrow that program to only expand the whole child model into counties joining the county organized health system model and including numerous provisions to strengthen the whole child model, improve oversight, and ensure all eligible children continue to receive the best possible care, regardless of the counties they live in. Thank you.

Next we will go to line 104. Please go ahead.

Hi. This is gabby Davidson, California Association of Food Banks. Thank you, chair and Committee Members, for the critically needed investments in our food banks and anti hunger program to protect Californians from the CalFresh benefits clipped with the end of the emergency allotment.

In particular, we thank you for investments towards Cal food EBT, theft protection, the commitment to increasing CalFresh minimum benefits from inadequate $23 per month, up to $50 per month, increases to SSP for SSI recipients, investments in school meals for all, and for budget investments to allow Californians to fully maximize the potential of summer EBT. And lastly, we look forward to continuing to work towards protecting California recipients from cruel and ineffective federal Abot time limit rules next year. Thank you.

Next we'll go to line 106. Please go ahead.

Good evening, care Members. Laura Lane. First, on behalf of the California Association of Port Authorities, or Kappa, just want to thank you for your continued support of California's ports. We appreciate you're maintaining many investments in our ports, specifically the Port and freight infrastructure program, investment in zero emissions, drainage, trucks and infrastructure, and other critical funding. Recognize that there are budget constraints in this year's budget. However, we continue to request reinstatement of the $400 million for Zev funding or zero emission vehicle funding at our ports.

California ports have made incredible commitments to reach zero emissions and specifically as it relates to cargo handling vehicles. This is an investment in the future and we urge you to consider reinstating this funding. Appreciate your continued support of the efforts to ensure that our ports continue their strength and resiliency in California supply chain. And then secondly, on behalf of Glide, just appreciate the funding provided in AB 102 for the Glide modernization project. Thanks so much.

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Good evening, Mr. Chair and Members. Mandy Lee, on behalf of Flow EV charging and EV box, wanted to express our support for the EVs payment standards provision contained in ABSB 123, as well as support for AB 126 regarding the reauthorization of the Clean Transportation Program, which will provide an important and sustainable source of funding for zero emission infrastructure.

Also, on behalf of the Port of Long Beach, we really appreciate the sustained funding for the goods movement sector contained in the Budget Trailer Bill Junior ABSB 102, and really appreciate the hard work of the Committee and the Governor and Legislature. Thank you.

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Lori Depole Co, State Director of Decoding Dyslexia, California DDCA and over 50 other organizations are calling in support of K through two screening for reading difficulties, including risk of Dyslexia as outlined in AB 1114. Thank you.

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Good evening. My name is Kelly Mikashi. I am an elected trustee from Pleasanton Unified School District, just like my fellow colleagues just spoke advocating for SB 691 to help support struggling readers, grades K through two. Just a reminder, many of the states already have these screeners and it will help save money to help identify students in need if this is approved. Thank you very much.

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Thank you. Mr. Chair, Members of the Committee, Brandon Marchy with the California Medical Association, we'd like to thank you, the Administration and the Assembly at large, for your resolve and commitment to securing this once in a generation investment in our Medi Cal program. The coalition of stakeholders came together to structure an MCO proposal that would maximize access to care for patients, not just today, but well into the future.

Next we'll go to line 112. Please go ahead.

The proposed MCO plan will increase access for the millions of Californians that are in most need of care. Additionally, the proposal will provide much needed funding to boost our physician workforce through the creation of residency programs and physicians. We wholeheartedly support the MCO proposal which would deliver on California's promise of health care for all and achieve justice and equity and access to care for Medi Cal patients. We respectfully request your support of the measure. Thank you for your hard work.

Good evening, chair Members. Janice O'Malley with the American Federation of State and County Municipal Employees. First off, there's much to be grateful for despite bad economic times and so appreciate Committee staff and the Legislature and your work and efforts to try to weather the storm.

But just wanted to specifically uplift ABSB 120 and align my comments with my colleague Adrian Mohammed from the United Domestic Workers related to childcare and in home support services, but specifically in support of the fiscal penalty to ensure that counties come to the table and negotiate in good faith. Also wanted to highlight ABSB 117. Appreciate your efforts to support the nursing workforce by thinking outside the box to create a pipeline to continue the recruitment of nurses in the state.

And lastly, just wanted to appreciate the significant investment in the Medi Cal program to provide the much needed funding to emergency ground transportation by including EMS and the reimbursement rates for the FCO tax, which we hope will help support the retention and recruitment of the EMS workforce. We've also expressed our gratitude in previous budget hearings on other items that I won't repeat to save on time. But again, just really appreciate all your work on this budget. Thank you.

Next we'll go to line 113. Please go ahead.

Next we will go to line 89. Please go ahead.

Good evening, Mr. Chair and Committee. This is Nick Cruz with the California Labor Federation.

Good evening, Chair Members, Matt Kloppenstein on behalf of SMUD and the Center for Sustainable Energy in support of reauthorizing the Ad 118 fees via Ad 126. It's really critical to reauthorize those fees and we really thank you for including that in the budget.

Next we'll go to line 102. Please go ahead. 102, your line is open.

I just wanted to express our thanks and gratitude for the film tax credit, which includes a historic set of safety requirements, and also wanted to express gratitude for the funding for healthcare for striking workers and the funding for a grant program for public prosecutors to enforce labor law. We also want to echo SCIU support for the restatement of the Industrial Welfare Commission. Thank you. Good evening.

Is that me?

Yes, that is you, ma'am.

All right. Good evening Chair Ting and Committee Members. This is Liz Guillen with Public Advocates. Thank you for responding to our equity and access concerns in the local Control Accountability plan. In focusing goals, actions, metrics and spending to close performance gaps by student groups, Public Advocates expresses great appreciation for the equity multiplier. While not all of the Equity Coalition recommendations were included. We are heartened to see improved Fund distribution to schools with greater concentrations of Low performing disadvantaged students.

Thanks for clarifying that support be provided to community partners to ensure meaningful collaboration and implementation of the Community Engagement Initiative. We're heartened to see preservation of the Golden State pathways and the national Board certification. Grants. Advocates do remain concerned about ongoing funding to county offices of education for court schools, but we're grateful for increased accountability mechanisms and transparency around court and community schools. We look forward to future opportunities to engage with you when considering alternative education accountability.

Many thanks to you and the Administration for all your hard work. Thank you.

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This is Kathy Garmazi speaking on behalf of the Entertainment Union Coalition to thank the Legislature and the Administration for all the hard work and for the inclusion of the film tax Credit in this year's budget. The credit, as has been said, keeps tens of thousands of jobs in California. It also contains diversity provisions that are new and that reflect the values of our state.

And most importantly, it also contains a safety production pilot program, the first of its kind in the country, that yet again reaffirms California's leadership and workplace safety. Thank you.

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Hi, good evening. My name is Benissa Nunes Constant and I'm a senior VP of Government Relations at Ultimate Health Services. We're the largest federally qualified health veteran California, serving half a million medical patients in Los Angeles and Orange County every year. I'm calling to register a deep concern on the MCO Tax investment. Because community health centers, including federally qualified health centers like ourselves, were not explicitly included in the MCO tax deal.

We worked side by side with the coalition for months to achieve increased equitable access to desperately needed medical dollars, especially as safety net hospitals are closing across California and important access expansions, including Calam and Medikal for all, are being implemented. Community health centers, who are the primary care providers for the vast majority of Latinos and vulnerable communities in need across the state, should receive a portion of these much needed dollars without question.

So we respectfully request the Administration and Legislature explicitly include community health centers in the language to make sure we are funded in the MCO Tax. Thank you. Without contingency.

Thank you. Next, we go to line 115. Please go ahead.

Thank you. Mr. Chair and Members, Tiffany Mock with CFT, a union of educators and classified professionals. We want to thank the Legislature, their staff for all the hard work on the budget and many of the items that have already been mentioned. We just wanted to uplift thanking everyone for the 8.22% COLA, once again for all educational segments, which we believe will go a long way to address the staffing crisis that we face.

And finally, we support the clarifying language regarding charter school appeals that affirms current law and clarifies the definition of what abusive discretion means and provide more time to work out a policy for non classroom based charter models. Thank you so much and thank you again.

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Good evening. Melanie Lucas with the California State Parent Teacher Association. We are in strong support of proposed Bill language requiring universal screening for reading difficulties and risk of Dyslexia in grades Kinder through second. Thank you so much.

Next, we'll go to line 119 please go ahead. Good evening, Chair and Committee Daniel Sanchez with California Advocacy on behalf of Children's Hospital. Thank Assembly Member period for the Children's Hospital of Los Angeles investment. Thank you.

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My name is Lindsay Nofeld on behalf of Reading for Berkeley, a grassroots organization working to improve reading success for K through 12 students. We support the Budget Trailer Bill, proposed language to require universal screening for reading difficulties and risk of Dyslexia in grades K through two. Thank you.

Next we go to line 116. Please go ahead.

Yes, thank you to the Committee. Thank you very much for this time. This is Heather Zachson, the legal Director of Learning Rights Law Center. We represent hundreds of children every year who face difficulties with learning in school due to disabilities like Dyslexia, and we're expressing our strong support for the Trailer Bill proposed language requiring universal screening for reading difficulties for K through 12 students.

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Hello, this is Rachel Levy calling on behalf of the Mount Diablo Unified School District Community Advisory Committee. We are in support of the Budget Trailer Bill, proposed language to require universal screening for reading difficulties and risk of Dyslexia in grades K through two. Thank you.

Next we go to line 122. Please go ahead. Hello. This is Steve Maher, board President of Pleasant Unified School District. We support the Budget Trailer Bill proposed language to require universal screen for reading difficulties and at risk of Dyslexia in grades K two. As an Assembly. Bill 11, four. All students deserve the opportunity to read. Thank you. Next, we'll go to line 123. Please go ahead.

Thank you. Good evening, Chair Ting and Members. This is Carmen Nicole Cox on behalf of Aclucal Action. And I want to express my gratitude, actually, to the community based organizations that were the original co sponsors of Senate Bill Two, the Kenneth Ross Jr. Police Decertification Act of 2021. For all of their work, for lifting their voices and sharing their trauma caused by law enforcement officers who engaged in serious misconduct, including racial and gender motivated harassment and assault, physical abuse, wrongful, detention and more.

When SB Two was enacted, the community was clear that the status quo was unacceptable because the state was not holding law enforcement officers accountable for the harm and terror inflicted on communities of color. SB two created a fair, impartial and transparent mechanism to hold officers accountable and protect the civil rights of Californians. Recently, the Protect SB Two Coalition worked diplomatically and be a grassroots effort to protect the SB Two and keep it intact.

The goal was to ensure that there was not language in the Trailer Bill codifying posts, allowing them to withhold records of police officer misconduct. I will acknowledge that the language imprint in SB One, 34 is improved from the draft language originally introduced. Still, the Protect SB Two Coalition knows that more work needs right away, or else the goals of SB Two will not be achieved. Thank you, sir.

Next we go to line 124. Please go ahead. Hello, my name is Caleb Logan with the nonprofit qualified legal services provider Elder Law and Advocacy. I'm calling to urge the Legislature's approval of the Pace Restitution Fund submitted by Assembly Member Lucy. Thank you. Good evening. Next we'll go to line 127. Please go ahead.

Hello, this is Rachel Heard. I'm the board President of the San Ramon Valley Unified School District Board of Education. I am calling in strong support of the universal screening requirement for reading difficulties, including Dyslexia and grades kindergarten through second. Thank you so much.

Thank you and good evening. This is Todd Collins from the California Reading Coalition. I'm also a school board Member in Palo Alto Unified. Along with many other organizations and families across the state. The Reading Coalition strongly supports the Budget Trailer Bill language requiring universal screening for reading difficulties and risk of Dyslexia. This is a critical step in providing the foundation all children need to read and then succeed in school and in life.

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Thank you for supporting it. Next we'll go to line 131. Please go ahead. Good evening, chair and Members. This is Derek Polka with the Los Angeles Regional Food Bank calling in strong support of the critically needed investments in our food banks and anti hunger programs to protect Californians from the CalFresh Benefits cliff. With the end of emergency allotments. Just wanted to highlight the investments in food banks and in school meals and specifically the CalFresh Minimum investments. Thank you again for all the considerations and thank you for your time.

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Good evening, this is Baby KASU calling on behalf of Fulcrum. Full and complete reading is a universal mandate. I'm calling to support the Budget Trailer Bill proposed language to require universal screening for reading difficulties and risk of Dyslexia in grades Kindred through seconds. Thank you.

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Good evening, Chairman Tingen. Members, this is Andrew Shane from Grace unchilded Poverty, California. More than anything, we want to thank you and the Committee for making clear from the get go that we were going to reject the austerity mistakes of the Great Recession and protect our anti poverty programs. I'll align with the comments from the ECE coalition, Western Center on Poverty and the California Association of Food Bank. And just very quickly on Cal Works.

I'm so deeply grateful to you, Chairman Ting and Dr. Arambula for your leadership on reimagined Cal Works. We made tremendous progress on this this year and we really appreciate how hard this is fought for. I know that there were comments in the Senate hearing about the lack of time and the recent federal changes.

We stand ready to provide all of the evidence base, including from the recent UCSF report on homelessness that shows that reforming sanctions making the program family centered is a critical way not just to end stigma and to fulfill that program, but as part of our fight against homelessness. Thank you so much. Next, we go to line 135. Please go ahead.

Good evening. My name is Mary Conselmo and I'm representing as President of Northern California branch of the International Dyslexia Association. I'm also the parent of a Dyslexic wonderful person and a teacher. And I am calling to strongly support the proposed language requiring universal screening for reading challenges and the risk of Dyslexia in grades K to two and appreciate your support. Thank you.

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My name is Cherie Doreen from Equitable aid advocates. I am a parent of a child with Dyslexia and an advocate for Dyslexic children. We support that budget trailer bill's proposed language to require universal screening for reading difficulties and risk of Dyslexia in grades K through second. Reading is a civil right and an important foundation to all areas of education. Thank you.

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Hi. My name is Amy Beck. I am a pediatrician and a public school parent in San Francisco and I'm calling on behalf of San Francisco Parent Coalition. We represent over 5000 public school parents and we are in strong support of universal screening for Dyslexia and reading difficulties among children ages kindergarten to second grade. The wait to fail model is not working. We need early screening and early intervention. Thank you.

There's currently no one else in the queue, Mr. Chair.

Thank you, operator, any more public comment in the hearing room seeing none. We will adjourn the Assembly Committee on Budget. Thank you.