Assembly Standing Committee on Budget

Good morning, everyone. Welcome to this hearing of the Assembly Budget Committee. We are here today to consider the 2025 Budget Act. This legislative budget package will be amended into AB101 and SB101, which we will consider on the Assembly floor this coming Friday.

For today's hearing, Committee staff have provided documents which outline the proposed legislative budget agreement that we will discuss today. I will offer some brief introductory comments followed by comments from our Vice Chair, and then we will invite our budget Subcommitee chairs to comment on their respective areas of the budget.

We will then hear from Erica Lee at the Department of Finance and have an opportunity for Members to provide questions and comments before we vote on adopting the Subcommitee actions. Our Legislative Analyst Gabe Petek and his team are here for questions, as are Christian Griffith and the Assembly Budget Committee staff.

After the vote, we will provide an opportunity for public comments. To conclude the hearing with apologies, I need to depart at 11am today for funeral. So if we are not finished by that time, I will hand the gavel over to another Member of the Committee. But before we go any further, let's establish a quorum.

Madam Secretary, can you please call the roll?

[Roll Call]

Thank you very much, Madam Secretary. After 67 hearings, we are here today to consider our legislative proposal for the 2025 Budget Act. As we did last year, I believe it's important to remind ourselves how we have arrived at this moment.

While it may seem like several lifetimes ago, when Governor Newsom unveiled his initial budget proposal in early January, the Department of Finance was projecting a small surplus. President Biden was still in office, and the Palisades and Altadena were still standing. Since that time, our state has faced unprecedented threats and challenges.

Devastating wildfires in Los Angeles, chaos and uncertainty from President Trump's ever changing tariffs and incoherent economic policy. Politically motivated threats to withhold federal funding from California, and an ongoing effort in Congress to massively defund healthcare and safety net programs. And now a direct federal assault on our state.

And just a month ago, we learned in the Governor's May revision proposal that we would need to bridge a $12 billion deficit and prepare for rapidly increasing out year challenges. But our subcommittees have met this challenge with a twofold approach that is rooted in compassion and and fiscal responsibility.

Our Legislative budget offers alternatives to the governor's proposals that better protect key healthcare and safety net programs that are essential to our most vulnerable communities. It includes smart, targeted investments in critical housing, education, wildfire, resilience and public safety programs and advances landmark policies that will fast track housing construction and improve affordability.

And at the same time, the legislative budget also puts our state on a stronger path to fiscal responsibility. It reflects tough choices that have required us to tighten our belts and it takes meaningful steps to address our structural deficit. And it does so in a manner that preserves flexibility in the face of tremendous uncertainty and threats.

Our budget proposal builds in delays to some of the most consequential cuts to allow for more time for the Legislature to consider better alternatives and potential unintended consequences. And it provides time for us to thoughtfully consider how we might best respond to the devastating cuts and currently being debated in Washington, D.C.

but let me be clear, this has been a painful and at times agonizing process. The legislative budget is the result of hard conversations and impossible choices. Given the magnitude of the challenges and the depth of the uncertainty, it was not easy to craft this agreement.

And we understand that there is more work ahead for our partners and the Administration. As we continue the three party negotiations, I hope that we can work together to identify more ways to address our structural deficit.

We want to work with you on thoughtful solutions that will protect our most vulnerable while also making progress on our out year challenges. And as we move forward with negotiations, the Assembly will be guided by our twin goals of compassion and fiscal responsibility. We cannot balance the budget on the backs of our most vulnerable.

We cannot ignore the real challenges facing middle class and working families. But we also refuse to ignore the real fiscal challenges facing our state.

We hope that the solutions presented in our legislative budget can help to guide that conversation and that together we can craft a budget that meets the needs of our diverse communities in this unprecedented moment. With that, I will invite our Vice Chair to make any opening remarks.

Thank you Mr. Chair and colleagues. It's, yeah, it's budget day once again and it's great to be with all of you. And I just want to acknowledge the budget staff on the Republican side, budget staff on the Democratic side. How much work has gone into this budget and the chair said it absolutely right.

It was not a great year to be the Chair of budget. A lot of hard work has gone into this. But I just want to say that as we think about this budget.

I know I've said this quote once again, but one of our former colleagues on her wall had a statement that says, doing the most amount of good for the most amount of people.

And what Satan doesn't have in there is party affiliation or geographical regions, but simply doing the most amount of good for the most amount of people.

And as we go through this budget and the continued negotiations with the Administration, I just encourage all of us to keep that in mind that there's regions that are represented by one party or the other, but each one of those constituents has their needs and those needs deserve to be met.

And we have to do the best we can to make sure that all of California's needs are met. Whether it's wildfire funding or whether it's issues with wolves, whether it's IHSS, all of these things, our special needs, our special interest communities, we focus on those things.

And I just, if we go into the budget cycle with that in mind, just doing the most amount of good for the most amount of people, I truly believe we'll be on the right foot and on the right track. So, Mr. Chair, back to you.

Thank you very much, Mr. Vice Chair, for those opening remarks. And let me also thank the hardworking Republican Budget Committee staff and our incredibly hardworking Democratic Budget Committee staff. And a special shout out to Christine Mashiroa here who is celebrating her birthday and all she wanted for her birthday was a budget hearing.

So we want to wish a happy birthday to Christine. With that, we are now going to have an opportunity to hear some introductory comments from each of our budget Subcommitee chairs.

And I want to just take a moment and really extend a profound sense of gratitude to each of them who have grappled mightily with some of the impossible choices that this budget has presented, have presided over many hearings, listened to hours of public comment, worked with stakeholders and Members of the caucus to try to very, very thoughtfully work through the challenges in front of us.

And so I just want to thank them on a deep personal level for all of the hard work. So we will go in order and start with Budget Subcommitee 1, Assemblymember Addis.

Well, thank you, Chair, and thank you, Vice Chair, both of you for your remarks. What we have before us in health care is the product of 10 healthcare focused public hearings totaling dozens of hours, input from hundreds of Californians and excruciatingly honest conversations about how we care for the most vulnerable with the dollars we have.

We often say, show me your budget and I'll know your values. And this budget proposal demonstrates that every Californian is truly valued. We will put our dollars behind you.

As chair of the Health Budget Subcommitee I will say I've grappled with many difficult decisions, but the truth is that I'm incredibly proud to work under a speaker and a chair and with a budget team and Subcommitee and staff who to a person, ask themselves every day how we can do better for each Californian.

And to a person, when we face hard decisions, we do that from a place of care while taking seriously the very real fiscal situation in front of us.

And so I want to say that I'm truly appreciative of the health and budget teams, but also for all of you in the audience and all in our healthcare ecosystem, including providers and advocates and patients themselves, who know best what is needed in health care.

And as you've heard me say at multiple hearings, it's my belief that the most dangerous threat to healthcare in California is our Federal Government that has enacted erratic and destructive economic policies and fixated on hurting people by stripping them of health care and is now sowing social unrest and using our own troops against us, creating a new level of fear.

And for the very people who seek our care. And the inhumane decisions in D.C. really, truly are the root of harm here at home.

But while the Federal Government reneges on its promise to protect Americans here in California and this Budget Committee is doing everything we can to serve and protect our communities, I'll just give you an example that yesterday our Committee received a letter from one of the organizations saying thank you for this legislative budget proposal that delays and narrows a number of the most harmful proposals in the may revise related to Medi Cal coverage and thereby will protect millions of patients if passed.

The truth is, in health care, this budget may not be perfect. It probably isn't perfect, but it is centered on transparency, on fiscal responsibility, and on preservation of services for most in need.

It's a budget proposal that preserves funding for dental care, preserves funding for women's health, family planning and abortion care coverage, preserves direct access to hospice care, preserves long term care coverage, preserves programs for senior care, preserves health care for those with disabilities, preserves health care for undocumented people.

And it's a budget proposal that says one distinct thing, that this Legislature is committed to healthcare. That commitment is real. And so in this grave time of uncertainty, we do stand strong with the people of California. And Mr. Chair, when the time is appropriate, I'd like to make a motion to adopt the Subcommitee actions.

Thank you very much. Assemblymember Addis, thank you for your comments. Thank you for your extraordinary leadership. And thank you also to all of the Members of Budget Subcommitee 1. I know that that was a very tough assignment this year and we're grateful for the thought that all of you have put into that. With that, we will turn to Budget Subcommitee Two. Dr. Jackson

Jackson, thank you very much. Mr. Chair. I want to thank you for your thoughtful leadership as we guide this through yet another uncertain budget time. Also want to thank the speaker in continuing to provide one of the most transparent processes for through the budget process.

I also want to thank the tireless staff on both the Democrat and Republican side who have been incredible in ensuring that all information is being considered and voices are being heard. Of course, the wonderful LAO and of course the advocates who have truly been partners in this budget process.

It takes a lot of people looking at the budget to ensure that all programs are being considered, ramifications are being considered, and alternatives of how to make programs work better are being considered. And so as we go through the gone through the process, and most importantly, they've stayed throughout the whole sub 2 hearing process.

And anyone who's been in sub 2 knows that you need to be well hydrated, well rested, and because it's going to be a long marathon when it comes to budget sub 2, our North Star is continuing to make sure that our population are stable in good times and in bad times.

Bad things happen when a population becomes unstable. And so we have been laser focused on making sure that people have the essentials that they need to be able to be on a path to thrive.

But not only that, but we must also make sure that we just don't get distracted by the chaos and the uncertainty and the crisis at hand. We must still move forward to be the California we need to be for the people of California.

So also making sure that we're utilizing the budget process to set a strong foundation for the future so that we know that we are setting up the next generation for success.

With that, we have been able to do great work in ensuring that those who utilize IHSS are able to have the hours with the people that they trust.

We made sure that we did not allow key housing programs within the social safety net to lapse because before these programs existed, we did not truly have a social safety net. People were able to be on our social safety net, but yet still fall into homelessness. That is not a safety net.

And so we want we made sure that we are preserving key housing programs to prevent our seniors, our CalWORKS participants, our IDD communities from falling into homelessness, setting us up for the future, making sure that we did not renege on our inspirational dream to reform the CalWORKS system.

And even though the Federal Government took away our waiver to be able to transform CalWORKS, while you can't keep California down, we made some revisions and reforms anyway and we did everything that we can to make sure that our safety net is not just a survival program, but a thriving program.

Making sure that we continue to provide the necessary funding for our food banks to continue to meet the demands, the high demands, historic demands of those who are facing food insecurity and making sure that we help to stabilize our foster care homes, to making sure they have assistance with their insurance, making sure that we CalFresh participants still have additional resources to gain fruits and vegetables and also making sure that we hold fast on the Assembly dedication and determination that there will not be any year that goes by when we don't make progress on child care.

We have got to continue to move forward on childcare because our society simply does not work without a strong child care system. And so we are teeing up additional childcare slots.

So I want to thank the Members of the budget sub 2 want to thank again staff and certainly with the leadership and the compassionate leadership of our chair. So with that, at the appropriate time, I would like to second the motion.

Thank you very much, Dr. Jackson, for those thoughtful comments and your exceptionally capable leadership of Budget Subcommitee 2. A difficult assignment. And thank you also to the Members of Budget Subcommitee 2. With that, let's go to Budget Subcommitee 3. Where is Chair Alvarez?

Thank you, Mr. Chair, Vice Chair, and to our colleagues for being here this morning. I, I want to start the comments by sort of sharing what our mission statement is in our Subcommitee, which is on education finance. And that's to ensure that we protect and we continue our commitment to public education at the highest degree possible.

That has been the, the theme, the thread through every single one of our hearings. Every single one of our 14 hearings that we had, we have before us 266 actions that the Subcommitee reviewed, some, you know, at great length for quite some time and some a little more, more brief.

But nonetheless, we reviewed every single one, discussed every single one. And so I want to ensure our colleagues, especially from the Subcommitee and all of our colleagues in the public, that the input that was received through the public testimony and the questions that were asked our Committee are reflective of what we have before us today.

The instability is really something that is causing a lot of concern for all of the budget in this year, as you've heard from my colleagues.

And despite that, we've tried to create some stability because in times of uncertainty as unfortunately is being created by a lot of our federal actions, we must maintain our focus on being stable so that our educators can have the resources that they need in order to be able to provide the education to our kids.

And that's what this budget is about. So I want to share a little bit about some of the data first, and then I want to share some specifics about what is in this budget that I think is worthy of highlighting and that demonstrates that commitment to our students here in California and to our families.

First, we prepare for the instability that is unfortunately upon us now, and that will likely continue. So rather than spend all every single dollar, the budget is dedicating up to $1.3 billion of what we call settle up money, which is for planned appropriations into the future based on whether that funding occurs or does not occur.

Half of that funding, 650 million, will be saved in a rainy day Fund or as we know, the public school stabilization account. That's different than was in the May revision. There was no rainy day funds available there. We lower the deferrals.

Deferrals are essentially requirements of schools and colleges to provide services to students without actually funding it and with a promise to pay in the future. And that's a huge commitment to ask for. So we've reduced that significantly so that there's less borrowing and schools can continue to operate better with better financial planning.

Financial flexibility is really important to our schools. And so we ensure that we provide this year almost $19,000 in funding per student at the TK through 12 level.

And it makes good on the commitment to increase the Local Control Funding Formula, which is our own school districts and every one of our communities gets to determine how that funding gets used. Increase that by 2.1 billion. It also creates a half a billion or $500 million student support and discretionary block grant.

Again, schools have been asking for flexibility to use that for different purposes. Every school district is different. They all have different needs. And this block grant allows them to use it according to their needs.

We fully Fund the final year of Universal TK and this was particularly important because 84% of our local education groups and throughout the state agencies throughout the state offer full day TK kindergarten, which means that all of our students, all of our kids have access to a learning environment. We increase expanded learning opportunities program.

These are the after school programs that is important so that our families also have options for their kids after schools. Teacher recruitment and retention has been a problem in the State of California. This budget does something pretty substantial as Large, as I've seen in some time, which is a new teacher recruitment incentive grant program.

$600 million of Proposition 98 funding to support stipends for student teachers and Golden State Teacher Grant program, which many of you are familiar with, and teacher residency programs. We also create a $200 million block grant for evidence based English Language arts. We need to make sure our students are learning to read at grade level.

And this funding is dedicated specifically for that. There's $20 million. As you know, the issue of mental health is really in our schools pretty, pretty heavily. And the state made some investments a few years ago.

But this funding here allows to make sure that the programs that have initiated our school districts are able to be maintained and continue so that our kids can have access to the mental health services on school campuses as intended by the funding from a few years ago. And that's what the $20 million in this program goes towards.

Streamlining is important in government. This budget includes all major career technical education program applications and reporting and evaluation through the Department of Education and the Community College Chancellor's Office. We streamline those for efficiencies to maintain the individual program standards and Administration. And then finally In K through 12, I like to highlight the preschool center slots.

So in addition to TK Preschool, 2800 new preschool slots so that we can make sure that every low income three year old has access to universal preschool.

On the higher education side, now transitioning to higher education, we rejected the May revision proposals to reduce the operational funding by 3% cut to UC and CSU and then that gets restored by one year and then provide ongoing funding after that to again provide more certainty to our CSUs and our UCs, which so many of you, by the way, one of the highest letters with the most number of signatures was on this issue alone.

So reflective of what this body was asking for. We provide enrollment targets for UC and CSU for more students. One program that I want to highlight that I think speaks to how we listened to the public testimony is the Calbridge Program, which supports California students from community college all the way through a PhD program in STEM education.

And it will help diversify the UC and CSU faculty. The program has supported more than 300 students already who have completed their PhD program. 70% of them get accepted on their first try to the PhD program. And it's reflective of our student population in terms of ethnicity.

With 61% of students in the program being from first in their family to, to be a college student to now being a Doctor. I think it's a highlight of one of the programs that we ensure we Fund in this budget.

We also want accountability and we have heard about the CSU campuses that are losing enrollment, something that is real in our state. We are asking them to produce turnaround plans that focus on increasing student demand and reducing campus cost. Through efficiencies and other creative ideas, we address the growing demand of community colleges.

One of the highlights is more students are going to community colleges in the last few years years and going forward we need to make sure that we Fund those slots for those students and so we do so by funding previously growth that had not been funded and ongoing growth as well.

We also provide increased support for several student focused programs like the Rising Scholars Program which focuses on incarcerated and formerly incarcerated students.

Dream More Resource Liaisons Financial Aid Outreach so make sure that more students are applying for financial aid and on that front, the most number of students with Cal Grants almost half a million students in 25-26 will be eligible for Cal Grants this year.

So all in all, while those are all some good highlights, it was a difficult budget with some difficult choices. I too want to ask thank the colleagues on the Subcommitee for their participation, for their engagement, for the questions they asked, and for all the comments that we received from the public.

I hope that in what you see in our actions is reflective of what the public has been asking for us in this Budget Subcommitee. And with that said again, 14 hearings on this issue, 266 actions at the right time. Look forward to supporting this. And again thank you Mr. Chair.

Thank you very much Mr. Alvarez and thank you for your thoughtful, committed leadership in this area. And also thank you to the Members of State Subcommitee 3. With that we will go to Subcommitee 4, Assemblymember Bennett.

Thank you very much Mr. Chair. The first thing I'd like to do is thank you and the speaker for the your long commitment to greater transparency in terms of this budget process that started with your and the Speaker's leadership early.

But with a budget that is as difficult as this, that greater transparency is essential for public public trust and it really is a privilege to be part of this new commitment to that. So thank you. I also want to thank my fellow sub chairs.

I think many people would say we didn't know for sure what we were getting into when we took these sub chair jobs and stuff, but I really have been impressed with how much my colleagues, my fellow sub chairs have been able to clarify the impacts of the decisions we're making today.

And same goes to the Members of the sub four Committee But I particularly would like to call out two people that I think the people of California owe a lot to, and that is the two staff Members that staff Budget sub four, Shy Forbes, who's out in the audience, and our birthday woman, Christine Miyashiro.

And they just are incredible in terms of both the perspective that they have, the knowledge that they have about the budget and the related impacts as we go forward.

So I genuinely want to say thank you to both of you for making this job a doable job when you consider all the issues that we have to deal with. You know, budget sub 4 relates to climate, transportation, natural resources and energy.

And we need to reflect the priorities and values of the Members of the California Assembly as we move forward with this. I would be remiss to not point out that a big part of budget sub 4 is dealing with all of the California agencies that deal with disasters. CAL FIRE, Office of Emergency Services, etc.

And in timely given this presentation. But yesterday the Chairman of the Federal Reserve Board of the United States announced his concern that within 15 years there will be pockets of the country where you will not be able to get mortgages because you won't be able to get home insurance because of either the rising hurricane threats on the East Coast in Florida specifically and the rising wildfire threats in the west and California specifically being identified.

We are very aware that we're in that transition where we've passed a tipping point in terms of fire. And if you can't get mortgages, then property values drop. And when property values drop, property taxes drop. And the whole funding system for governments in state particularly like California would be at jeopardy.

So we're painfully aware that we need to work with all of these agencies and all of us have to really buckle up our chin straps and go after this real challenge of trying to make sure disasters don't sink the economy of California. The other two highlights I'd like to point out about budget sub 4.

There was an attempt to try to shift $1.5 billion from the greenhouse gas funds to Fund CAL FIRE. We think CAL FIRE is very important to the State of California.

And many of us expressed a desire to make sure CAL FIRE stays part of the General Fund budget where we think it because it is an essential part of California's services to our citizens.

We were, we've taken a more balanced approach to the governor's request to transfer 1.5 billion and we've limited that to $500 million would be coming out of the GGRF Fund. And we think that's more balanced moving forward.

We haven't finalized the GGRF budget at this point in time, but we are committed to trying to make sure that the $1 billion that we had previously committed to the transit agencies and that they were making decisions on, that those previous commitments will be honored.

We are also authorizing $750 million of loans specifically to the Bay Area transit agencies to help them with their what we hope are their temporary shortfalls as they try to come up with new revenue sources and new operation plans to try to close their operating shortfalls.

Members of the Committee, myself included, also expressed concerns about the backfills of the Proposition for money that was out there trying to make sure we maintain the public's trust that when they voted for Proposition 4 they were getting new funding efforts.

We've been able to cut that Backfill that was $316 million in the Governor's Budget down to $176 million as we're moving forward into the three party negotiations. So this budget has taken important steps, but we recognize that it's not featured finished yet.

We still have both ggrf and Proposition 4 to work the details out with our colleagues in the Senate and the Executive branch as we move forward. We know we have to make some tough choices to accommodate the $500 million in GGRF that is out there.

And again, I appreciate all the colleagues, the staff, our Republican colleagues that came to the Committee meetings and offered their insights also. Thank you very much, Mr. Chairman.

Thank you very much. Assemblymember Bennett, thank you for so ably leading the Committee. We're very grateful that you're able to, we're able to leverage your wisdom and experience in confronting these difficult issues. And thank you also to the Members of the Subcommitee and the staff for their capable service.

With that, we will go to Subcommitee Number 5 and Assemblymember Quirk Silva.

Good morning and thank you, Mr. Chair. And good morning to all of those who are here with us in the Committee. We know that you are very engaged and we appreciate that.

And again, the transparency, one of the things that we really asked and took steps one was to invite people, not only from the membership, Republican and Democrat, whether they were on the Committee or not, to come join us for hearings. And we indeed had several Members come join us as we move forward with our hearings.

But since the release of the Governor's proposed budget In January, Subcommitee 5 has held 10 hearings covering a wide scope of state operations, with additional hearings through Subcommitee 7 that touched on overlapping issues under our jurisdiction. I want to thank Assembly Members Ward, Ortega, Haney and Walis for their participation and input throughout these proceedings.

I also want to thank the Legislative Office and the Department of Finance for their input and work in this budget process. And I mean that we don't always agree, but throughout our hearings we have had pointed questions and we appreciated the response.

Lastly, I'd like to especially thank our staff, Republican consultant Brent Finkel, our Committee staff Guy Strahl, Bernie Orozco, Genevieve McCloy, Genevieve Morales and Christian Griffith for their diligence working as consultants in this huge Committee that covers all state Administration.

As I said, sub 5 covers a broad policy landscape including housing, homelessness, taxation, veterans, technology, elections, labor, arts, cannabis, cannabis regulation and much more. As many of you who watched our committees heard we were going to focus on what the State of California individuals have told us, which is a top priority, which is housing and homelessness.

And we know this remains at top concerns for Californians. And I'm proud that the legislators budget plan restores funding where the Administration proposed. None. Zero. Big fat zero. And why that's important is because every poll shows us the Californians are using more than half of their income for rents and mortgages.

So we are very pleased to see that we have new investments which include 500 million for the Low Income Housing Tax Credit, 120 million for the Multifamily Housing Program, and 500 million for the Homeless Housing Assistance and Prevention Program, which indeed our cities and counties have said makes a huge difference for them in addressing not only housing but homelessness.

In addition to these funding priorities, we also adopt two trailer bills with changes to CEQA and infill housing, which we know has been a theme of the Housing Committee this year, which is related to permitting and streamlining. In essence, we got to move. We've got to build on our tax policy.

The Legislature budget amends the governor's proposal to exempt wildfire settlements from taxable income by expanding to include settlements from recent fires. This change ensures that we treat all survivors fairly no matter which disaster they endured.

So whether from paradise or Chico all the way down to Los Angeles and further, we know that this was important to our partners and their showing up in interest made a difference. In addition, we have trailer Bill that does an elective tax military retirement exemption.

And this is really important because we have been told that many of our retiring military veterans don't remain in California because of our tax policy. So we're very happy to see a step and we want to see our veterans stay here in California.

We also worked and heard hundreds of testimony from those who work from the state, from individuals who came to our Committee to talk about the return to work or return, pardon me to office presentation. And we worked in that area. But we reject the proposal to assume 766 million in salary and wages savings from the General Fund.

And we want that collective bargaining to be where it should be with the workers. And we feel that that's the conversation that should remain where it should remain, which is at the bargaining table.

There were many other areas that were a focus wins for labor that we know one is a budget 121,000,001 time funding for the garment worker center pilot project. In recent news, the garment workers came up just this week as we had Ayes raiding some of these garment districts in Los Angeles.

So I'm just going to take a moment to expand on that. What are garment workers doing when they go to work? I'll let you think about that. But what they are doing, in fact is working many times very long hours to make the clothes that we all wear right here in California, not overseas, but here in California. And to send ICE in to raid.

And to lock up these hard working California's that our economy counts on from construction to our agriculture fields is unacceptable. And I'm proud that in this budget we have $12 million for this garment worker center project. I will keep it short. There were many big issues that we continue to work on from Cannabis Enforcement, cannabis.

We know that there's a lot of good work that has been done. We're proud of the work and as we move forward we'll continue to work on some of the most basic issues to California which is housing, labor, our workers and lifting up California as they lift us up every single day.

Thank you very much Assemblymember and thank you for your in particular for your passion for housing which has really helped to shape this budget. So we appreciate everything you have done and thank you to all of the Members of Subcommitee 5. With that let's go to Chairman Ramos.

Thank you Chairman. First I want to thank Subcommitee colleagues Assemblymember Schultz and Vice Chair Assemblymember Lackey for the Public Safety Budget Committee but also want to recognize budget staff Bernie and Jennifer and Lindsey for always making those cupcakes for staff that's there.

Also Budget Chair Christian Griffith and Jason Sissney for all of their hard work in getting us to this point in the road ahead of us. I also want to thank all of the Members of the public that came to comment on our Subcommitee hearings that dive dove into issues as Prop 36 victims rights programs.

We also had a hearing on OES and the response to the fires in LA as well as joined with the Women's Caucus to address issues in women's prisons in the State of California. I just want to highlight a few areas that came out of the hearings that made it into the budget that's being presented.

Highlight some key priorities that include $30 million for judicial workload and collaborative courts to support ongoing efforts for Prop 36. And there's other money in the budget for Prop 36, but I'm highlighting some of those that we work specifically on as well as a 20 $1.0 million area for the right grant for rehabilitative programs in CDCR.

We we also were joined by Members of the Women's Caucus in one of our hearings where we heard about sexual abuse in women's prisons. And we included funding to support the work of the Sisters warriors to continue their efforts to address sexual abuse for the next three years.

And also but certainly not least we continue to work together in a bipartisan fashion to include backfilling for Voca programs in the State of California. We have $100 million to support survivors of crime by backfilling the Voca program, the grant program that's there.

We knew from the beginning we would have to make tough decisions and we would do what we can to protect California's people and values in our communities. I look forward to working in our Subcommitee and supporting the the ongoing efforts of the chair, Mr.

Gabriel, but also the speaker as we continue the path forward, knowing that there has to be agreement. These are budget items that are being presented to the Governor, and we stand ready to support our leadership in making sure that these things come to reality. Thank you so much.

Thank you very much, Assemblymember Ramos, for your very capable leadership. With that, let's turn to Chair. Assemblymember Hart, Subcommitee 7.

Thank you, Mr. Chair. I want to thank our speaker for appointing me as chair of the Assembly Budget Subcommitee on Accountability and Transparency and for his and our Budget chair's strong support for this critical oversight work. Christian Griffith's outstanding work and support of our efforts were essential to our success, and I'm really grateful for his counsel.

This year, the Budget Oversight and Transparency Subcommitee held four hearings focused on three critical issues. The impacts of federal funding on California's fiscal situation and the service reductions at the Federal Government that impact our work, our housing challenges and the state's Reserve policies.

These hearings underscore the serious risks posed by the federal funding reductions and the importance of ensuring that California is prepared to respond should these cuts materialize. Following the summer recess, we plan to convene four additional hearings before the end of the year.

One of the key areas we intend to examine further is the Department of Finance's efficiency contract. I've spoken directly with the Department and conveyed our interest in being constructive partners in identifying opportunities to responsibly reduce operating costs, particularly within Medi Cal and the state corrections systems.

We all want to ensure that every available taxpayer dollar can be stretched as far as possible to help provide direct services to Californians. The extreme uncertainty we face from the Federal Government will require all of us to continuously work together to constantly adapt to the changing economic circumstances.

This work will unfortunately continue beyond the adoption of this current budget as we continue to track developments in the federal budget that could affect California's fiscal health. Thank you, Mr. Chair.

Thank you very much, Mr. Hart, for all the work you've done, and we look forward to the work ahead. With that, we're now going to ask Erica Lee from the Department of Finance to make comments.

Good morning, Chair Gabriel, Vice Chair Flora, Members of the Committee, Erica Lee, with the Department of Finance and appreciate the opportunity to be before this Committee to comment on the Legislature's proposed budget. While we're still in the process of really getting down into the details, I do want to just present some observations.

The Legislature's budget incorporates a number of the proposals included in both the governor's included in the governor's May revision to control for some of the growth in spending. However, some of these proposals are modified as mentioned, deferred and or delayed.

In addition, there are a number of governor's proposals that are rejected and while the there are new proposals, they don't compare in terms of the number of savings. There are also additional investments of over 2 billion above the May revision.

So as a result, the Legislature's budget does not achieve the same amount of budget savings as the May revision. With all that said, we look forward to working with the Legislature as was mentioned, to form a three party deal and a budget act in the coming weeks to address some of these points.

And I just want to make note that as we mentioned in both the Governor's Budget and the May revision, a key goal is to build budget resiliency in the budget as well as in the out years.

And also wanted to point out the importance of what both the chair and the Vice Chair said about balancing compassion with fiscal responsibility and also doing the most for the most. And I would just add with the finite amount of dollars that we have here. So happy to take any questions from the Committee.

Thank you very very much. With that we will now turn to our very capable Legislative Analyst.

Thank you Mr. Chair, Mr. Vice Chair and Members, thank you for inviting us to be at the hearing today. I'm here with my colleagues. We're available for questions and if it's all right, I had a couple of reflections on the package as we understand it at this time.

The first is to just kind of begin with a recognition that this is the third consecutive year in which the Legislature has granted grappled with solving a deficit problem.

But in some ways I would say this year's problem is more challenging than in the prior years, not least because in those prior years the budget plan included large one time and temporary allocations that could be pulled back to help solve the deficits of those years.

And largely those types of options are not available this time around, necessitating that the state and the Legislature examine some of the core services provided by state government. And this is inherently a difficult thing to do because of the human impacts that some of these choices can have.

But it's also necessary because as we look at the General Fund, these programs, core safety net programs plus education, make up a significant majority of overall spending out of the General Fund. And the costs of those programs on an ongoing basis are exceeding the projected growth rate of our revenues.

So that is why this is so challenging and we recognize that from our office. Overall, as we look at the package, similar to the May revision, it does solve a lot of the problem through the use of some internal borrowing and program reductions.

Overall, as we've talked about here today, the legislative package seems to use a bit more internal borrowing and make a bit fewer program reductions. But this allows for the Legislature to make some select augmentations in certain policy areas that many of the Subcommitee chairs have mentioned.

And finally, I did want to note that the legislative package does enact a plan that would end with a certain somewhat smaller discretionary special Fund for economic uncertainty at the end of the year.

But I think, you know, it's very important to note that the plan does maintain the roughly 11 billion in the budget stabilization account, the state's rainy day Fund.

And this is very important given the high level of economic uncertainty that the state faces and also in light of the changes in federal funding that are being contemplated in in Congress. So I'll stop there and as I said, we're happy to try to assist with questions if you have them for us.

Thank you very much. With that, let's now open it up to questions and comments from Members of the Committee. Assemblymember Wilson.

Thank you. Chair Gabriel and I just wanted to make some comments as Chairman Chair of Transportation. And I wanted to begin by thanking leadership both in the Assembly and Senate for recognizing the urgent need for operating support for public transit in the Bay Area.

The extension of the 750 million loan to San Francisco Area Bay Area Rapid Transit District, San Francisco Municipal Transportation Agency, the Peninsula Corridor Joint Powers Board and Alameda Contra Costa Transit District is a critical lifeline. BART was one of the few transit systems in the country that generated more than half of its revenues from fares.

Before the pandemic, BART averaged more than 408,000 trips per day. Today, even on its busiest day, ridership has dropped to about 179,000 daily trips. The Bay Area Legislative Caucus is actively working on a regional funding measure to support BART, County, Caltran and other local transit agencies.

But even with that effort underway, these agencies face projected operating deficits in the hundreds of millions, deficits that will rise well before any regional funding takes effect. This loan will help ensure BART can continue to deliver 1 million rides each week to Bay Area residents supporting our economy, reducing congestion and promoting sustainable transportation.

I also want to express appreciation for the restoration of 1.07 billion in Greenhouse Gas Reduction Funds Dollars for transit through 2028. This funding fulfills the state's promise to invest in transit capital, zero emission buses and essential operations.

As we continue to make major state investments in public transit, it is equally important that we hold agencies accountable for improving services and operating more efficiently and I look forward to the forthcoming recommendations from the CALSTA Transit Transformation Task Force later this year.

These recommendations will help guide performance metrics and support our collective goal, a more reliable, equitable and effective public transit system for all Californians.

I'm also support very supportive of the 1 time 17.6 million appropriation from the state highway account and 92 positions to plan and design a seamless transportation network that supports The Los Angeles 2028 Olympics and Paralympics Games. It's important that we show the world that California is capable of providing a world class transportation system.

Finally, the Office of Inspector General for the High Speed Rail Authority plays a crucial role in ensuring proper oversight and accountability for the high speed rail project. They provide valuable information to the Legislature which helps guide our decisions and supports necessary transparency for the public.

I appreciate the additional funds allocated to continue the establishment of this office and the provisions for aligning classification and compensation with other state agencies. These measures are essential for the overall strategy to complete the high speed rail project. Thank you Mr. Chair.

Thank you very much, Assemblymember. Assemblymember Patel.

Thank you Mr. Chair and many thanks to the speaker, our Budget Chair and Committee Chairs and all of our staff who work tirelessly to craft this deliberate budget that reflects the needs of our communities while maintaining fiscal responsibility.

Thanks to our leadership's commitment to increasing Member access to the budget process, I was able to attend several Subcommitee hearings where I was able to ask questions, provide input, and I also heard thoughtful advocacy from the public.

Knowing all of that, I want to acknowledge that the delays and internal borrowing within this budget have helped us minimize the harmful cuts as we work with our Attorney General to restore federal funding and that has been withdrawn from our communities, the Communities with Americans federal cuts that are cutting funding to our Americans here in California.

While not perfect, the budget presented today prioritizes preserving support to those most in need and aims to stabilize California's economy and future. Amid all of this federal uncertainty, the budget reflects the core needs of Californians safe communities, strong public schools, access to health care and responsible fiscal stewardship.

And I acknowledge also that difficult decisions were made and will continue to be made as we face all of this uncertainty. But I remain encouraged that we are protecting essential services and laying the groundwork for future opportunities. And I thank the budget team for hearing our needs to do that.

We often hear that budget statements are a reflection of our priorities and our values. And this budget definitely puts Californians first, resisting all those cuts to healthcare, public education and housing. And I just want to thank again this remarkable leadership team, budget staff and my colleagues for ensuring that we put Californians first. Thank you.

Thank you very much, Dr. Patel. It's a pleasure to have you on the Committee. Other Questions Comments Assembly Member Schiavo.

Also want to thank the Budget Chair and all of the Budget chairs I was proud to serve on and proud to serve on the Budget Health Subcommitee where there's were proposed a lot of cuts and there was a lot of work and a lot of, you know, public outrage, organizing voices that really helped us push back on that and so really happy to see that we've restored cuts to IHSS and a number of things that were really under threat.

I also want to especially thank the chair for his leadership around Voca funding being restored. This was a top priority of mine and something that a whole coalition of folks were really fighting for considering what had been cut from the federal funding.

And so really, really critical to make sure that our most vulnerable victims of crime, trafficking, abuse really have support. And you know, when they make a call, someone is there to answer that call and give the support that they need. So grateful for that. I know. You know, we all are waiting to see what's next.

There's still work to be done. But you know, grateful that I think the goal that so many of us, we're working towards to protect the most vulnerable, to make sure that we do the least harm, is really a value that comes through in this budget. Thank you.

Thank you very much. Assemblymember. I know that Assemblymember Lackey had wanted to offer a comment.

Yes, thank you. Excuse me. In spite of multiple concerns that I have for this particular proposed budget, I wanted to express also as expressed by my colleague from Santa Clarita, the demonstrated humanity from this Committee to restore the proposed IHS funding cuts that were being strongly considered and proposed.

They made no sense to me and they were very hurtful and so thankful to see that we took that position.

Thank you very much. Other Comments Questions Assemblymember Patterson. Great.

Thank you. I wasn't quite ready getting my notes together, but I don't want to miss my opportunity, so just wanted to thank the chair and the Vice Chair, also the Subcommitee chairs. All the Members of budget know this has been a. It's my third year on budget. It's been a great, great time. I've served on several committees.

I've enjoyed being on the Budget Committee. As a Republican, I feel like it's one place where you can find some common ground on some big ticket items. And I've done that pretty much every year. We've been able to do that. This year, I've had the privilege of serving on the health Subcommitee, which I've absolutely loved.

It was great serving with our chair, Ms. Addis. And although I'm not sure I quite agree much with her perspective on the Federal Government, we did find quite a bit of alignment on, in my view, some of the draconian cuts proposed by Governor Newsom.

One of the fundamental purposes of government is providing public safety and a safety net. The governor's proposed budget absolutely devastated families that have an individual with disabilities from ihss. I mean, the list is very long. The Medi Cal asset limit was a big one. Cuts to the 988 suicide and behavioral health crisis service Fund.

Cuts to health centers and rural health clinics also in addition to that. And I wasn't on this sub this year, but I think it's still five.

But the one that dealt with housing, once again, you know, housing programs were zeroed out, and I'm just unbelievable with the goal of, at 1.0 building 3.5 million houses, which was reduced to 2.5 million homes. And.

And now I don't see any policy objectives, actually, or policy goals to meet the objectives that the Governor himself laid out. Instead, he zeroed out those funds. And I'm glad that once again, the Legislature has decided to put back some of the most successful housing programs that local governments use.

In fact, I was driving into Sacramento today from the confines of Placer County, and I was driving down the street and noticed many homeless individuals. And I just thought to myself, you know, what exactly is the state doing to get these individuals help? And, you know, housing was not one of them.

But I feel like the Legislature is putting its foot down again and hopefully going to restore those fundings at the end of the day, you know, I do believe that the budget is short in a lot of ways. I know that there are tough decisions that need to be made.

I still think Proposition 35 and the funding around that and the borrowing of funds, you know, really, especially with the expansion of the Medi Cal population, to be taking money out of the Healthcare system is really going to impact the access to care at the end of the day.

And the voters did obviously speak about what their opinion was. They passed Proposition 35. And I felt like, you know, the funding that is going into that is disappointing. Obviously public safety and Proposition 36, I mean, go on for that for a very long time.

But I know there were some tough decisions that, you know, the committees had to make and obviously negotiations with the governor's office will be ongoing.

But I do think, despite some shortcomings that I still have significant concerns with, I do commend the Legislature for coming up with, by the way, this is an endorsement on most things in the budget, but I do commend the Legislature with coming up with a more practical budget for the State of California. So thank you.

Thank you. Let's go. Assemblymember Tangipa.

Thank you and thank you for being here again. First, I wanted to say thank you to this legislative body. Looking at and prioritizing the budget is a reflection of our priorities.

And I know that there are a lot of Members here that have really taken this to heart, whether it's IHSS disability individuals, a lot of the veteran families as well that need support. And I think that that really reflects some of my big concerns.

And it seems like a sentiment that has been shared is essentially in the General direction that we're going. Statement that I often use is that we've got an infinite number of problems but a finite amount of resources. And earlier this year I asked a question on is this sustainable?

And what I would ask right now again is looking at this budget and the Governor's Budget, do you believe that this is sustainable for the future and for future projections?

Erica Lee with the Department of Finance. The governor's May revision drew a line in the sand in regards to acknowledgement of cost increases to our programs that we needed to address, as well as reductions in revenues.

At the same time, so, so understanding that we were getting less money than we forecast and that some of our programs were becoming more expensive, we proposed solutions. I would say that this two party plan, the Legislature's proposal, goes in that direction.

It does indeed recommend some of the proposals, as I mentioned in our May revision, modify some of those, as was mentioned here, to give the Legislature some more time to consider and to kind of look at how to make our decisions going forward.

I think that's important, acknowledging that these things may have to happen and looking at some other solutions as well. So I would say that this budget does move towards that direction. It doesn't quite make the, you know, the same amount of cuts and savings as was included in the May revision.

But we continue and as I said, we look forward to having discussions with Legislature as we move forward towards July 1st to address some of the concerns that we have in regards to sustainability. But I do believe that this two party plan moves in the direction that we wanted in the mayor vision.

Thank you and I appreciate that. And one of the things that I had heard earlier today as well is that this where we're trending where we're moving to significantly different than some of the budget years prior to because that was a lot of one time funding that you could be cut.

This is we're going now into mandatory funding. Would you say it's a concern of yours that we're using 40% of the rainy day Fund just to make sure that we could roughly balance this budget?

The decision to withdraw from the rainy day Fund was part of the 2024 Budget act because it acknowledged again that there was a large deficit.

And as my colleague from Legislative Analyst Office mentioned the this is the third consecutive deficit budget and so alone the 12 billion may not seem like a lot, although it is still a lot of the proportion of our General Fund.

It follows two successive years of over 30 and then over 50 billion in deficits that we had to address.

And you're predicting deficits all the way until 2021?

Well, currently our operational the out years for operational balance is negative and that is something that we have been trying to address again not just through solutions that impact the budget year, but solutions that roll forward in the budget year the years beyond that in what we call the multi year, so three to four years out.

So we are attempting to address that and some of the solutions and measures we take that impact budget year will roll over and we'll have savings in subsequent years. So that is the goal.

But I would say that to address sort of more broadly your question, we are looking at more difficult solutions because a lot of the one time funds that we had we pulled back. We are shrinking some of the solutions we delayed, sorry, shrinking some of our costs and delaying some of those costs over the past few years.

And we are trying to the goal of the May revision, I believe the goal of this, the Legislature's budget plan is to really safeguard the core programs and to reduce some of the I don't want to call them discretionary because of course people rely on these, but some of the more discretionary to maintain core programs so that our health and safety net is still strong.

Which it just brings me to my largest concern is if we're using 40% of the rainy day Fund this year with predictive ongoing budget deficits for the next year, you know, that's more than likely it's going to increase next year mainly because we'll have less in the rainy day Fund.

And it seems like what's being predicted is a larger deficit next year and then ongoing. And so, you know, I just wanted to make sure that I'm sharing those concerns to understand like where do we have the proper hard conversation?

And again I, I truly thank this legislative body for saying that we choose military families and we choose a lot of the disabled families and prioritizing those Californians. One of the areas and topics that we talked about earlier in this year too was a large part about medical and the spending that we're seeing on that area.

And one of the areas I don't agree with with ours is that in the governor's proposed there was a $100 premium for individuals that illegal immigrants on Medi Cal this proposal reduces that down to $30 per month.

One of the main concerns that I think, I feel and I think a lot of others do is that families in my district, they're paying hundreds of dollars each month for health insurance premiums. All of us are doing the same thing. Money we all know that they're already struggling to come up with.

Even government workers are paying hundreds of dollars for health care coverage. CalHR has a benefits calculator and I found that A family of three pays about $488 on their basic plan.

So naturally I'm trying to understand the justification for charging undocumented immigrants just $30 a month for full scope Medi Cal and a program that comes at an incredibly high cost to taxpayers. What's the rationale here?

And mainly, you know, does this help solve some of the issues that we are exponentially seeing on the health healthcare cost here in the state?

Christian Griffith with the Assembly budget. Medi Cal is a means tested program. For low income individuals. So by definition to be qualified for this program those individuals have to have extremely low incomes. So that is the reason why premium.

Levels can't be commensurate with private insurance for like a, for a family that in a work who has a full time job. Because it is essentially commiserate with Medi Cal population which does not have a copay outside of this, the UIS population. Is proposed in this budget.

No, no, I completely understand what Medi Cal is. I mean my, my mother makes $24,000 a year on dependency income after losing my father last year. So I know exactly who it goes towards and who it goes towards helping. But that's not what I'm asking.

What I'm asking is that is it sustainable with some of the ongoing issues that we're going. Basically, I'll make it easier. The governor's proposal of $100 a month, our proposal of $30 a month, which one of those proposals can actually maintain. So that way we keep the services in place. We.

It comes to a funding aspect because it seems like we're on a fast train to not having enough funds for future programs.

As noted, Our proposal was $100 premium per month per individual. And you know, that would save roughly about 2 billion by 292829. And the proposal in front of you now, the 30, $30 premium would I believe, save about 675 million by 2029. So about a third or so of that.

And so, I mean, again, I think this is just the one way in which to curb costs of several solutions. I defer to legislative staff for the specific and why 30 was chosen.

I would just say that, you know, all in all together, there were several proposals that were to to contribute to reducing the cost of the medi Cal growth.

Well, and I appreciate that clarity just to understand Too, you know, $100 under the governor's proposal, it's at least predictive that $2 billion in saving and under ours, 600 million or roughly around that.

And so just again, to see where can we maintain what we can do to make sure that we are prioritizing some of the most disadvantaged in communities that do need help.

And again, this budget is built on two principles, compassion and responsibility. And this is, I think the balance in which the $30 is trying to achieve is to try to come to a with a level to save money that makes sense compassionately in the context of the program.

Yes.

Yeah. I was just going to add, I think that in this kind of a discussion, it's all about the trade offs involved. And so in this case, reducing the premium is a benefit to the population that the Legislature has previously expanded to include in the program.

And you know, on the other hand, it produces somewhat less revenue and less savings for the budget. So that's the trade off that's being balanced here in some sense. It's a value judgment made by the Legislature as a whole. I don't know if my colleague Jason.

Yeah, Jason Concenturos, LAO. I just also wanted to note that when you're considering sort of weighing the trade offs of something like a premium, there really are kind of two savings effects.

One is there's revenue generated from the premium, but also it can result in people leaving the program because they, for whatever reason, they can't afford to pay the premium or they're not willing to pay the premium.

And of those two effects, that disenrollment effect tends to be where a lot of the potential savings are, but they're also very uncertain. And even charging $1 premium likely would have some effect on enrollment.

But this is sort of the trade off that we understand the Legislature really grappled with is Given that these are lower income people, is $100 the right amount and these are sort of the trade offs that weighed.

And I completely understand that as I had stated earlier, there are an infinite number of problems with a finite amount of resources and it's about trying to maintain, keep the things in place that we can do.

But compassion also does come with a cost and with the dollars that we have in this state with an ongoing already three year deficit with future projections, when it comes to additional deficits in the future, we have to come also with a sense of responsibility on trying to understand I can't rack up hundreds of thousands of dollars in debt and just expect to kick, keep kicking the can down the road before we truly do have to have the hard conversation.

And to me I believe the hard conversation is going to come when the Rainy Day Fund is less than $2 billion if we're on a trajection of 40% of it's used this year.

But I truly do really appreciate a lot of the analysis, a lot of the statements that are being stated to us as a legislative body giving us the information of just the understanding of how do we balance compassion care and taking care of Californians, but also how do we fiscally responsibly manage this state as well.

So that way the future generations, my generation can really make sure that we can do the same thing in the future. And I just want to make sure that those are just some of the concerns that I have.

And again, truly appreciate all of you truly appreciate this legislative body as well, prioritizing a lot of the California needs and look forward to working together in the future.

Can I just add a a piece of information in regards to the reserves that both the governor's mayor vision as well as the two party plan leaves a Reserve of roughly around 13 billion for the Legislature's plan, about 15.7 billion for the May revision.

And so understanding your point about having a sizable Reserve, that is what is left after the withdrawal. But also I would just point out that both the Legislature and the Governor have noted the importance of making changes to Proposition 2, which would increase our ability to put more funding into the Rainy Day Fund going forward. So noted.

And I think it is something that this body has noted as well as being important. So just wanted to say that, clarify that.

Thank you very much. Let's now go to Assemblymember Solache, Assemblymember Lee and then Assemblymember Rogers.

Thank you Mr. Chair. You know, it's been 67 months on the job for me as a new, as a freshman, I thank the opportunity to serve on this Budget Committee, a Committee that's imperatively important for our communities. Important that, you know, it's been overwhelming last seven months.

I think we all know what 2020 has been, and it continues to be. This budget is definitely another challenge that the State of California has. And I'm proud of our Assembly Members. Our Members are in these committees.

I can't tell you how proud I am of our Subcommitee chairs, along with our chair, of having this open process back. I feel included as a new Member of this process. But before I continue, I want to, without a doubt, thank the advocates.

You know, it's not too long ago that most of us, or many of us were on the other side of the fence advocating for any other interest. You know, I come from student government, the student voice of higher ed.

So seeing today that we push back against the cuts of higher ed, I am beyond proud to be on this side of the fence, saying, yes, let's do that. Of course. I think the best words today so far from the team here is compassion and responsibility.

And I really want to applaud that sentiment, because as much as we have to act with compassion, there is responsibility in this process. And for me, being on step one, health, I was a little shocked that I was appointed to that Committee. My team really knows.

But our chair did an amazing job along with our Committee Members, to really listen to community advocates. And these are real stories. These are not just, you know, it's not a simple tagline, zero, in my district, these are families. These are community Members that we represent every day.

And for me, you know, an example of, like the PACE program, right.

Not only did I hear from advocates, I live that process right when my mom passed away five years ago and my father has been on his own and just Organically joined the PACE program, you know, and telling me stories about how it has made it, you know, zero, I went to eat breakfast today and I oatmeal like the mom, like they want your mommies to make me.

You know, those are the stories, those are the how these programs have an impact. So definitely there's a lot of compassion in these families, these individuals. And don't forget that there's also that humanity in all of us.

Right at the end of the day when we all go home and we look ourselves in the mirror in the morning, we have to remember that we represent community Members that depend on us. So things like other Members have highlighted the HSS programs and all these things that we've been able to protect our military families.

Everyone matters in this process. I still remember my parents and community Members I proudly represent, which happened to be immigrants and undocumented when people use wrong terms. So I would appreciate my colleagues who use the word undocumented because that's the appropriate thing to add our humanity to each other and be respectful.

And there's worse things that people have been called. And I just want us to remember that words matter. And I really hope that, that as we continue having these conversations that remember we're talking to people, people that when we express words, matters to all of us. So just remember that we are in that space.

And I just want to say that, you know, examples of the higher ed again, as the example, it's the values of our state. Values of who as Californians. And I'm proud to be Californian. Do we have challenges? Absolutely. But it's how we deal with them that matters.

And I'm proud to sit along with my colleagues on both sides of the aisle to ensure that we are the voices that for California. So thank you. And my last thank you is to all the amazing staff. I. I always tell my team that I'm as strong as a Member because my team rocks. Right.

So you want to see a great team in the Capitol, you go to 5110. That's my office. And my team just is the best team that we have in the capital. Of course, a reflection to all of you who work.

When I learned there's hundreds of people that work in the finance Department, my hat's off to all of you because it's hard work.

Disagree.

Who was that? I was thinking the same thing. I think you have to go to the eighth floor to 8110. Right?

Right. Well, you have him in my team, so. But with that, we all have amazing teams. And I want to just obviously amplify how he staff is and our team Members. Right. Actually, I don't even call them my staff. I call them my team Members because that's who they are.

They're Members of my team and we collectively make things happen. I was going to say a different word, but we make things happen. Right. With that again, do you want to thank the process, Mr. Chair? It's been been a great experience.

You know, I look forward to continue supporting this process with, again, not only compassion, but with responsibility. And these are hard decisions to make. But, you know, coming here, bringing 21 years of local government and having those experiences has helped being part of this process and just engage with community.

So thank you all and let's continue advocating for the values of California. Gracias.

Thank you very much, Assemblymember. I want to thank you for reminding us all about the need to think and act with humanity when we address our fellow Californians. It's a really important point and I want to thank you for uplifting that.

And I also want to thank you for helping us to recognize that all of us sitting on this dial dais, Democrat and Republican, are very fortunate for the team Members that support us every day. So thank you to all of the staff, Democrat and Republican, who have been part of this process and who serve us more broadly.

With that, let's go to Assemblymember Lee.

Thank you, Mr. Chair. Just for the record, I think all of our teams are especially great just for that record. But I want to give a special thanks to the budget staff and to all the budget chairs, sub chairs, and also to our Budget Chair who has employed a lot of creativity and ingenuity this budget process.

But I just want to comment very briefly about the long term crisis we're in. We do face a structural deficit problem where we are in our third now deficit budget, but we will continue to persist in this problem. And there is a real social problem because of this, because we have vast wealth inequality in this state.

I represent the Wealthiest County and the wealthiest state and the wealthiest nation in the history of the planet of the Earth. And yet in California we have more billionaires than anywhere else in the country except for or except for another place in the world in China.

And we have more people that sleep in their cars and tents in the street than anywhere else in the country. We have a vast wealth gap that must be closed. We must have hard and difficult conversations about taxation policy which is not yet really present in this budget, but must be present in future conversations.

Because even back in the last great recession when I was still a kid, Governor Jerry Brown realized that to bridge the great divide and make sure that most vulnerable our society had services, he proposed taxing millionaires and that passed resoundingly in the state.

I can tell you now that with wealth inequality being as bad as it is today, those policies would still be very, very popular today.

The persistent question we have today is that there are still tax loopholes and tax breaks for very, very wealthy people and multinational corporations that make billions of dollars in revenue every single year, and yet they still get tax breaks and they are not appropriately taxed.

We must continue to have hard conversations, yes, but we cannot balance entire budget in future years on austerity alone. We have to prioritize the social services, health care and transit and education, which our budget has made great strides in doing so. And I'm very proud of that budget to do so.

But, but in future conversations, we must revisit revenue and revisit taxation because that is the only way we can justly balance these large deficits and out years. And especially if Trump wrecks the entire economy and our social safety net, we will have to especially address those questions.

But we must, colleagues, make a very hard decision and look at ourselves in the mirror and say where are we willing to cut as far as we can? Where are we willing to borrow and save?

And at some point, where do we ask those who have more money to that any of us individually could ever dream of to finally pay a little bit more so that everyone can have health care? Thank you.

Thank you very much, Assemblymember Lee. Appreciate that. Let's now go to Assemblymember Bonta.

Thank you, Chair. I wanna thank all of the Subcommitee chairs and chair, of course you, for your incredible work and certainly the staff associated with our efforts in this moment in time.

I wanted to start out by recognizing that the reality that much of what we are grappling with comes in light of the incredible uncertainty that we have with the Budget Reconciliation act still not being clearly known to us.

And I really want to commend you and thank you, Chair, for putting forward a budget that really allows us to be able to help to mitigate the likely harm that is going to come from the federal budget that is going to be proposed by people who are more focused on hate than they are on support for our most vulnerable communities and specifically for Californians.

There is so much in this budget that I think we can be proud of, given the fact that we are dealing with the level of uncertainty that we have fiscally as a result of federal actions. I wanted to highlight and just ask a couple questions.

First, I'll start with the early child care components here, an area near and dear to my heart. There's certainly still maintenance of a goal of ensuring that we have 200,000 child care slots by 2028.

And I saw in the in the budget summary a commitment to increase an additional 12,000 slots by the 26-27 budget year and certainly increasing with additional 150 million for General Fund specific voucher slots, new childcare center slots and new preschool slots.

I did want to, though, recognize that there is always this balance between ensuring that we have childcare slots and ensuring that we are providing total cost of care for the individuals our childcare providers and our workers who take care of our children.

In this moment, can you just be a little bit more explicit around how we are maintaining the existing reimbursement rates for our childcare programs and, and what we are doing specifically around the cost of living adjustments for our state preschool workers as well.

It's Erin Gable from the Assembly Budget Committee. So the rates from the prior budget year, so in the current year have been maintained into the budget year. That is inclusive of the supplemental payments that have been negotiated by the childcare providers United States, as a part of the budget two years ago.

So those are maintained into the budget year, including the administrative costs to ensure that those funding rates are continued. They were part of the May revision. What was also part of the May revision and was approved as part of this budget is the suspension of the statutory COLA.

So the statutory COLA was being provided in the January budget in order to increase funding rates for the standard reimbursement rate, the old rate system we used to use for center based programs. That was repealed in the May revision and is approved as part of this budget.

And I also saw that there was a move to an enrollment model which I also appreciate and know will provide some additional support.

Correct. So the May revision includes a proposal to shift to prospective pay for all child care providers. That means that they would receive payment at the beginning of the service month instead of at the end.

The Legislature's budget amends this proposal to accept prospective pay based off of enrollment rather than returning to an attendance based funding rate model.

And I want to thank both chairs, Dr. Jackson and Mr. Alvarez for really diving in deeply to ensuring that. We're kind of moving the needle, I think, was what Chair Jackson said, particularly around alternative methodology and ensuring that we are meeting our needs in early childhood education across our two systems as we transition.

And I really appreciate the language that Dr. Jackson used, which is we are seeking to make progress every year and I would encourage us to continue to have that urgency as we move forward with that.

I also just want to thank Chair Ramos for opening his Committee and for the public safety to really be able to help us center the work of the California of the Assembly Legislative Women's Work Group on Incarcerated Individuals that our chair here, Assemblymember Quirk Silva, has been found established.

Because I really think each year the oversight work that you did in that Committee allowed us an opportunity to understand the need to be able to center, particularly the experience of our women in our two facilities.

And you certainly kind of expressed that in the budget proposal that was moved forward by the Legislature, ensuring that we had healthcare staffing increases in our two women's prisons, ensuring that we had an Office of Inspector General receive additional funding to or maintain funding to be able to look more deeply at the complaints of staff who are committing sexual misconduct in our facilities and also ensuring that we are focused on health care within that.

And obviously the backfills for the Voca program is essential and funding to support Sister warriors and the Right grant within that which were asks that were made of the Incarcerated Women's Working Group.

And I want to thank you Chair, for your focus on that as well as staff for ensuring that we had an opportunity to deliver on the promise that we made in that hearing to look more deeply at those issues.

I wanted to also just echo the comments made by Assemblymember Wilson, Chair of Transportation, regarding the Bay Area Public Transit Funds to ensure that we have an opportunity to live to fight another day.

And I know Chair Bennett, you had to work really hard to be able to center that those opportunities for us to be able to do that.

I want to thank you for your efforts in that regard and certainly Chair Quirksilva for ensuring that we had an opportunity to reintroduce very smart legislation and budget requests around HAPP funding and a Housing first model to be able to take care of our most needed and certainly there's a lot within the education portion of this budget that I think really was very demonstrative of the thoughtful approach that Chair Alvarez had to ensuring that we were making progress on some of the commitments that we had, particularly around career technical education, focusing on programs that allowed us to be able to leverage the incredible resources that we have in our higher education program.

And I second Assemblymember Silach's comments around protecting and preserving both community college work and our CSUs in this budget, which I know was no hard feat, as well as obviously our commitments continually for our TK12 system.

I did want to just end my comments by focusing more deeply on the Budget Subcommitee Health one, chaired by just an incredibly compassionate individual, Assembly Member Addis, who probably had the most challenging budget cuts to make along with Assemblymember Jackson in the areas of health.

Here we are at a crossroads in the State of California around how we intend to treat and support and recognize our undocumented individuals in the State of California. Southern California is on fire in Northern California. Well, because of people, because of the specific Ayes invasions that have disappeared hundreds of people at this point.

While we seek to have our people demonstrate their discontent with that within peaceful Protest right now those Ayes invasions are coming to Northern California and our undocumented community is living in a State of absolute fear in this moment in time, right now.

And so when I think about that reality, I want to center some of the decisions that we've made within the health care bucket and particularly around Medi Cal and want to ensure that we were dealt are dealing with unprecedented times right now.

And the budget proposal in the May revise that we were offered had us confronting a lot of challenges as it related to supporting our undocumented individuals and keeping them on Medi Cal because.

Because by the way, our undocumented people pay into this economy, they do not have the ability to be able to receive back what they deserve from the State of California.

And we worked really hard to be able to establish health for all, to be able to recognize their contributions and the public health needs that every Californian has here in the State of California.

What I appreciate most about this budget that we were put forward with is an opportunity to have more time to think more deeply about the impacts of the cuts that were proposed around IHS workers dental care just overall, the overall freeze, the medical asset test limit and all of the cuts that went specifically towards one particular subset of our Medi Cal population.

And for those reasons, I will be supporting this budget right now primarily because we were very thoughtful in thinking about the consequences of the federal budget and the implications of what they will be doing, which we don't have visibility into right now and understanding that we have an opportunity for delayed or deferred implementation around what I believe are egregious will have egregious impacts on our Medi Cal population overall and specifically to our undocumented and our unsatisfactory immigration status individuals in this budget.

But I will say that I am doing that with extreme concern and know that that sentiment is shared by many of my colleagues right now.

And if we really want to talk about people having their fair share and taking on their fair share, I encourage this Legislature to recognize that we have multinational $1.0 billion corporations that seek to build their profits off of the backs of their workers who they don't seem to be able to pay health care towards, but seem to be able to ensure that they get applications to provide Medi Cal to them.

This budget has a lot that we can hold onto right now and I want to thank the chair Addis in particular for your incredible work to make sure that we are, we're approaching our healthcare with compassion and with an openness to making sure that we fully address the needs of every Californian in this healthcare plan that we've put forward.

With that, I will end my comments and thank you all.

Thank you very much, Assemblymember Bonton, I know I mentioned in the beginning that this budget presents a lot of agonizing, impossible choices. And I just want to thank you for your wise counsel as we have tried to steer the ship through very choppy waters and choppy waters ahead.

With apologies to my colleagues, I know we have a few more folks that wanted to make public, Members that wanted to make comment, and I want to honor that. As I mentioned, though, I need to depart at 11am for a funeral and I promised Mr.

Flor that we would take a vote before I hand it over the gavel. So with that, I believe we had a motion from Assemblymember Addis and a second from Dr. Jackson. So I think at this moment it would be appropriate to call the role Madam Secretary.

[Roll call]

[Roll call]

[Roll call]

[Roll call]

Thank you very much. I believe that means we have adopted that we will keep the roll open for absent Members and we will now. Okay. Assemblymember Rogers, Assemblymember Muratsuchi.

Thank you very much, Mr. Chair.

First, before you leave us, I want to thank you for all of your leadership and hard work on this very difficult budget, difficult circumstances imposed on us from the Trump Administration with all the economic uncertainty impacting our revenues, and so with all that, all the challenges, I am in support of our legislative proposal for the budget.

To continue the budget negotiations, I do have some questions. As chair of the Assembly Education Committee, I want to focus on the education part of the budget. Thank our budget Subcommitee chair, Mr. Alvarez, for all his leadership. And largely, I think I heard two themes from Mr. Alvarez's comments that I want to echo.

Providing stability in these times of uncertainty and providing the resources to our K12 as well as our University's and community colleges as the Trump Administration has been defunding public education. And so I first of all want to acknowledge the Governor for prioritizing education at all levels in these challenging times.

I especially appreciate many of the exciting initiatives, either new or ongoing, whether it's our ongoing efforts to achieve universal access to transitional kindergarten, or whether it's our new initiatives to provide professional development to make sure that every child, every student can learn how to read at, you know, at grade level.

Also very excited with the Governor supporting our effort to pay student teachers because we know that that's a huge financial obstacle to addressing our teacher shortage. So I want to thank the Governor for his support on all of those counts.

I appreciate the Legislature's rejection of the budget cuts proposed to our University of California and our California State University.

Again, at a time when the Trump Administration is defunding, you know, research grants, you know, so much of the federal funding that is so critical for our University of California and our California State University, which are truly the engines of our innovation economy.

I think we need to continue to prioritize protecting and providing that stability for our universities. With that, I have questions for Ms. Lee. First, I know the ongoing concern in the education community is the integrity, protecting the integrity of Proposition 98.

And it is my understanding that the may revise continues to fail to fully Fund the minimum guarantee provided by Proposition 98. So I would like to ask you to address that. And second, I'd like to echo Ms. Banta's concerns about child care.

We know that child care is not just providing essential critical child care for working families, but it's also a critical part of our early childhood education, quality childcare being quality education at the early, in the early years.

And so I also wanted to raise the concern about, you know, this balancing act and this difficult budget between increasing slots. I know that the budget Subcommitee chair, Dr. Jackson is also very, very supportive of making sure that we're addressing the two the true cost of care for our especially for our family based child care providers.

But I wanted to ask Ms. Li to address the issue. Number one is, you know, are we complying with the Constitution and not fully funding the minimum guarantee of Proposition 98? And number two, how do we continue to make sure that we are addressing the true cost of care provided by child care providers in this difficult budget?

Sure. I can start with some comments in regards to our Prop 98 proposal. I may turn it over to my colleague here who the two party plan adopts that same proposal.

In General, I would say that the mayor revision appropriated 117.6 billion in the Proposition I need guarantee and, and at the May Revision we proposed 1.3 billion of additional 1.3 billion would be settle up. And so we part of the argument we made was that we don't have the final revenues at this point.

And so when those final revenues comes in and we certify for the Proposition 98 guarantee in that year that we would provide the minimum guarantee. This settle up is for future payments and we believe that it is a constitutional proposal. So I'd leave that there. I don't know if my colleague has anything more to share on that.

Hi, Erin Gable from the Assembly Budget Committee.

So the legislative budget differs slightly from the May revision proposal in that while we agree that there's great uncertainty in the current year in regards to the Proposition 98 guarantee and so the amount of the maintenance factor is yet unknown, may be unknown as late as May of 2026, what we do is authorize a positive trigger so, so that the funding once available, the first $650 million of that trigger would go into the Prop 98 Rainy Day Fund so that there would be a balance to that Fund available to protect our ongoing investments in the budget year and in budget year plus one.

Also, we then authorize the remainder of those funds once they are available. Right now, it's estimated to be approximately $650 million to then start paying down the deferrals that are still present in the legislative budget.

So the legislative budget was able to reduce the deferrals for K2 from the May revision proposal of $1.8 billion down to about $800 million.

And so we are hoping that whatever is available as of Approximately May of 2026, once Proposition 98 revenues are fully understood for the current year, that we will be able to get those deferrals paid down as far as possible, approximately down to about $250 million.

On your second question regarding child care and the total cost of care, there was a work group that got together to look at what that total cost of care would be in regards to rate increases.

And I believe at one of the hearings, either I believe it was a Subcommitee hearing that there was discussion about that new cost of care, the total cost of care proposal.

And I would say that the Administration acknowledges that there are, that there is a new way in which we will be looking at the rates, but at this time, we don't have the funds to provide additional funding beyond what was included in the Governor's Budget.

Thank you. Thank you very much. At this moment, Madam Secretary, can we call the roll again for some absent Members who are returned?

[Roll call]

I think you may have missed Ahrens.

I'm sorry. Thank you. Ahrens.

All right. I think we, we are getting there.

I know we have a few more Members that wanted to provide some, some comment and question, but before we do that, I just want to take a moment of personal privilege as I'm about to depart to thank the incredibly hardworking Assembly Budget Committee staff who have put in hours and hours and hours to bring us to this moment.

You know, people who are on their, on their zooms at 3am trying to get this right, to make sure that we are doing right by the people of California. So thank you to all of you for your extraordinary work and thank you to Christian for so ably leading that team.

Thank you also to Jason Sisty in the Speaker's office who was an important part of this process, to Abram Medeas and Alicia Isaacs, who have also added a lot to this.

And I do want to acknowledge, of course, Legislative Council and Department of Finance, when we did reach a two party agreement, they really had to hustle to get all this in print. And I know that it is hundreds and hundreds of RNs and lots of work to do that.

So thank you to the folks at DOF and the Legislative Council who did that, to our Legislative Analyst who has provided us with thoughtful feedback throughout all of this and of course to the sergeants who take such good care of us. So thank you to everybody who has been part of this process.

I have handed the gavel over to my colleague here. We don't always agree on policy, but he does know how to use a gavel. So he will, he will, he will, he will successfully guide us home, I'm sure. Thank you Everybody.

Thank you, Mr. Chair and colleague Petrie-Norris.

Thank you, Mr. Vice Chair. And I'll also begin by thanking you, Mr. Chair. Thank you to all of our sub chairs, budget staff for all of your work over the last several months as we put this proposal together.

I feel like a lot of the conversation both in this hearing, a lot of the work and the focus has been around the fact that we are confronting a $12 billion deficit. But I think it would be the wrong takeaway for us and certainly for the public to think that this is a sky is falling moment.

So this is still a historically large budget for the State of California. I think it's the, is it the third largest budget in the state's history? Third and fourth.

All right, so I'm going to, I'm hoping you, you can help remind us just how much our budget has grown over the course of say, since 2018, which happens to be when I was elected. So this budget is how large the total, the total size of this budget as compared to say, 2018. All right.

I did not prepare you with that question. I don't actually have the numbers written down, but I think it was something like $200 billion total budget in 2018 as compared to like 320 billion in this budget. That is a huge increase. There's been more than a 50% growth in our state's budget since 2018.

And I think it's just important context and important for us to take a step back and ask ourselves, do most Californians think that they're getting 50% more from the state government? I don't know that they would say that.

And I don't think it is the right conclusion for us to decide that everything in our now $320 billion budget is sacrosanct.

And as we confront what I think is going to be an even more difficult budget environment in years going forward, and I think the last line in this staff report says California again may face significant projected deficits in the coming years. Legislators, Governor Newsom and their successors may face more difficult decisions in the years ahead.

I think it's really important for us to be prepared and to understand really what has driven that growth. Is it the creation of new programs? Is it the growth of existing programs?

So I would love to get your perspective on how can we start to do that work now, knowing that we may have some bad news coming in the fall, whether it's from the Federal Government or any of the other uncertainties that we've discussed in great detail.

So how can we really evaluate and understand what has driven that spending growth and hopefully be in a position to make appropriate decisions should we need to?

We've done Assemblymember, we have done some work on this in recent months. And a lot of the program growth has been expenditure growth has been in the areas of health and human services over the last several years. There have been augmentations and expansions to those programs.

And fundamentally the underlying problem is that from a fiscal standpoint, of course, is that the growth rate of our expenditures is, I want to say, 8 or 9% in our revenue. Long term revenue growth rate is 4 or 5%. And so what it comes down to is trying to bring those two numbers into better alignment.

And a Reserve Fund won't be the answer. It's not the panacea to that. All the Reserve Fund does is buy us time. It helps us account for unexpected shortfalls, or it could help assist with a transition to lower funding from the Federal Government, for example.

But fundamentally it would require reexamining or examining the Legislature's priorities in these areas. We put out a document several months ago about reviewing or conducting oversight of programs. So I think it's kind of in this area that the Legislature would want to spend some of its time over the next year or so.

And you know, the Legislature this past year adopted a two year approach to the deficit that it was facing last June at this time, you know, adopted a two year approach.

And what we've urged the Legislature to do is continue to maintain some momentum on focusing on these resolving or shrinking the fiscal deficits that are projected in the multi year. But really that's the hard work of it comes down to going through these programs item by item and in the oversight process.

I would say yes, and I appreciate that suggestion and I wholeheartedly agree. I know that there's been some discussion in this hearing and certainly some discussion outside of this room about, you know, potential proposals to raise additional revenues.

And while, you know, I understand that there's going to be some work in evaluating proposals and understanding what those would look like, I think it's also incumbent upon us to make sure that we can look at our constituents and say, yes, we are spending your tax dollars wisely, efficiently in a way that is delivering a good ROI for the State of California.

I think we have to know that we can say that to our constituents before we ask anyone for an additional dollar. So look forward to continuing that conversation in the months ahead. Thank you.

Thank you very much. Anyone else from the dais who would like to offer their comments, questions? Ms. Bonta, thank you.

I just have a follow up to that kind of line of inquiry. Specifically, I think has there ever been a report that has been established that does comparison of the expansion of programs versus the cost of programs or kind of goods and services over time.

I'm specifically thinking about the cost of the total cost of health care which I know to have increased in the last decade by exponentially, which certainly drives up the overall spend in that particular area. Have we ever done that kind of analysis?

I don't think that we have done that kind over that time frame that you're talking about.

I just want to point out that it's not only the programs, the potential expansions to those programs, but really there is this underlying issue with things costing more to be able to do them, particularly within the healthcare space, particularly within the housing space.

We our budget also reflects the fact that we need to spend more in order to be able to provide same service.

And in spontet that's correct. I think the underlying healthcare costs are growing at 12% a year for everyone, for the private sector, for the public sector. And so one of the challenges as the state is a big purchaser of health care, we see that growth impact our bottom line as well.

And that's part of why the spending growth is increasing. And essentially what the state was attempting to do was to try to get to close to full coverage of everyone so that we could try to bend that cost curve. And that was sort of our long term goal.

And obviously having to ratchet back on coverage and looking at these reductions that we're looking at will make that a little bit harder. But unless we can change that cost curve itself, we're going to be in this place. We're going to relentlessly have higher spending because health care is growing much faster than anything else in the economy.

Correct. I would add to that too. And when we look at last year's budget and look at the expenditures that are estimated in this year, part of the it's a combination of factors, the caseloads being higher than were expected, but higher pharmaceutical costs, for example, than were previously anticipated, higher higher enrollments among our senior age population.

And so part of the challenge too is that the drivers of the cost, as Kristen, my colleague was saying, they also shift over time. And so it is a complicated question, but I take your point.

Yeah, I just appreciate that because I think the creation of our budget is obviously very nuanced at the end of the day.

And if we're not actually factoring in the cost of health care or other goods and services that keep on increasing for different reasons like tariffs, or just our inability to really kind of look more specifically at what some of the drivers of health care are, private equity investments, for instance, or mergers and acquisitions, for instance, I think it's very important for us to factor that in as we're having this broader conversation around what are the drivers for cost and what ultimately we're going to need to be able to cover in our budget and have that be a consideration.

So with the ability to get past this particular budget flash point that we're having, I would encourage the LAO and our budget team to really be able to provide us with a more comprehensive look so we can not have to make statements like we're not getting 50% more of our care or we're not getting 50% of our value from government right now, because I think that it's significantly more nuanced than that statement belies.

I think we'll go for our last comment from our colleague Senator Quirk-Silva.

I really appreciate having the opportunity to serve as a budget Chair of Budget sub 5 and participating not only in our processes that start in January and go until now and will continue after even this week, where we'll continue to craft the budget with trailer bills with other the three party agreement.

This is what our California democracy is, which is you take a set of factors which is of course how much revenue we have in this last three years.

We of course are looking at a budget that has deficits and we all come to this existence by Being elected and by representing the constituents and trying to do the best job that we can by listening to whether it's advocates, whether it's consultants, whether it's lobbyists, this is part of what we do.

But ultimately we are here to serve the public. We are public servants. And our great nation was based off of public service and the benefit to public. So when we have invested in people, we've done investments like our highway system across the country, like our public libraries, our public education.

And these dollars don't always have a return on investment because they are public benefits. And as we go through craft, we always have to keep in mind who we are serving, why we are here. And it is not equal. There is not equity in our budget.

There are some people that an investment in health care, public education, even our human services program is their existence. There's others that have more and maybe don't rely on these type of services. But this is California.

We know that we have many individuals who are doing backbreaking work who are, and I have said this repeatedly this year, they are up at 4am Working in the agriculture fields in work that none of us in this room can even imagine doing. How do I know this?

I have family Members who have not only done this kind of work, but it also, when I say back breaking, we are literally talking about breaking their back. That some of us would be able to stand that work for an hour, for an hour.

We have people working in garment factories, doing hospitality on our coast, in these resorts. We know that these people work on behalf of California. We know they contribute to our economy. And when we tout being the fourth largest economy, we should be proud of that. But who was providing that service?

So this service is how we become this California, this great economy. And we cannot look blindly as we walk around this grid in Sacramento and pass people who are homeless. We cannot look silently as we see people with mental health on our streets.

And we cannot look silently as we see our workers asked to do more and more. So we don't always see the dollars match up accordingly. But this is what we do, is we craft a California budget that includes all. And I'm proud of the work we've done with we have more work to do.

It's going to get harder and harder as resources or dollars diminish. And we do have to look carefully at what we cut, what we save. And that is what crafting the California budget is. So I want to thank my colleagues because this is not easy work. It's painful work.

But we are here to stand up for our public, for our public that we represent as California public servants.

All right. Thank you, Madam Secretary. Could we open up the roll one more time and grab a few of our colleagues, Shiavo and Alanis?

[Roll call]

We'll still hold open for absent Members. I do have one question and final question for me, just ever so brief. We talked a little bit about healthcare over the last few years. On the air ambulance side of things. We have not that base rate has been has really changed in the last 25 years.

It's only covered about 20% of actual costs. Is there anything in this budget to kind of address that when we talk about access to care and the air ambulance side of things?

I apologize for the last minute question, but.

There is nothing in the two party agreement that includes that and there was nothing in the May revision.

Okay.

And this- this was something we did address last year, but it was overridden when Prop 35 was approved. So we had a package of rate increases and it was in that package. But. But then when Prop 35 was approved, it undid the legislative package.

Interesting. Chris, maybe we'll follow up with you a little bit on, get some more background on that and see if we can kind of address that. Thank you very much. With that being said, that ends like comments from the dais. We are going to open it up for public comment.

There is a lot of people that would like to speak. So we would ask keep your comments to 30 seconds or less and we'll try to hold everybody accountable to that. So name organization. 30 seconds.

And first up, Natasha Minskar. Smart Justice California. We strongly oppose restricting the ability of legal aid organizations to help people fighting deportation. Today, any one of us who stands against tyranny faces the very real risk of arrest and prosecution on trumped up felony charges. ICE is capturing children and U.S. citizens.

People are being disappeared into other countries prisons, never to be heard of again. Legal aid and immigration attorneys are on the front line fighting for working families, fighting for our Constitution.

Fighting for us.

Thank you so much.

Thank you so much. Next please.

Kenneth Hartman, Executive Director of Transformative Programming Works. Just want to thank the committee for Supporting the Wright Grant and especially Ms. Bonta. Thank you again.

Thank you.

Chair Members, Dean Grafield with Capital Advocacy here on behalf of Case the Union for State Attorneys as well as other legal professionals in state applaud and support the efforts specific to rejecting the telework trailer bill as well as a proposal specific to wage compensation and freezes won through collective bargaining. Thank you.

Thank you.

Good morning. Debbie Arakel with Habitat for Humanity California. And thank you for your work. We know it's and the incredibly challenging budget year and we would urge an investment in the Cal Home program that actually produces units along with the down payment assistance of Dream for All without Cal Home that is 100% affordable.

An investment in down payment assistance only drives up the cost of homes. So we're urgently respectfully asking for a dual investment in Cal Home along with any investment in down payment assistance. Thank you.

Thank you.

Good morning, chair and members. Kim Stone, Stone Advocacy. I have two different clients but I'm going to be fast on both of them.

The California District Attorneys Association is very grateful for the legislature's recognition of the will of the voters in funding Behavioral Health to implement Prop 36 believes that would be more effective if combined with more funding for supervision for the Probation Department and the California Solar and Storage Association which is would urge full funding of the demand side grid support program and distributed electricity backup DSGs and Diva in order to promote and maintain grid reliability. Thank you very much.

Good afternoon. Christine Smith with Health Access California. We are profoundly disappointed that the legislative budget proposal, while rejecting some of the Governor's cuts, is based on the same framework using immigration status to determine who will get health care coverage and who will do without.

We oppose any premiums because we know payments of any amount cause people to lose coverage. The proposed $30 premium is better but could also include exemptions for hardship and could be paid by community benefit funds. Thank you.

Thank you.

Mr. Chair and members. Michael Pimtel with the California Transit Association here today to show our thanks and our our appreciation for the restoration of the transit funds that are included in the two party agreement. Look forward to supporting it as it moves to conversations, negotiations with the Governor.

Did want to note that we do still have some exposure on our ongoing continuous appropriations. We'll be engaging in the cap and tree discussions where those things will be handled. Again, thank you and especially great thanks to folks in sub 4 for their support in moving this forward. Thank you.

Thank you very much.

Whitney Francis with the Western Center on Law and Poverty.

We appreciate the Legislature's rejection of the egregious cuts to older adults and people with disabilities by reinstating the asset tests at a more reasonable amount and rejecting cuts to IHSS long term care and to certain immigrants as well as efforts to reimagine CalWORKS to make it more family centered.

However, we are profoundly disappointed that the discriminatory cuts to medical to immigrant families remain and will permanently lock out people out of health care access and impose still unaffordable premiums. We also request a newly added restriction. On the--

Thank you so much. Sorry about that.

Yasmin Peled on behalf of Justice in Aging, appreciate that the Legislature rejected many of the harmful cuts targeted towards older adults by reinstating the asset limit to a more reasonable amount, rejecting the cuts to IHSS overtime and travel hours and cuts to IHSS and long term care for immigrant communities also appreciative for the additional investment in HDAP and Home Safe.

However, we're disappointed that the Legislature's budget maintains freezing access to Medi Cal for undocumented and UIS populations as well as charging premiums and eliminating the Adult dental benefit for immigrants. Thank you.

Thank you.

Good morning, Mr. Chair and members. Raymond Contreras with Lighthouse Public Affairs. I'm here for two clients. I'll be really quick. First, San Diego Housing Commission is what we'd like to echo the comments from Habitat for Humanity California and Investing in Cal Home and the dual split between. Dream for All and Cal Home.

Secondly, Falwell, we would like to thank the committee and the Legislature for the 36 million for the Cal Fresh and Fruit Vegetable EBT program. Thank you very much.

Thank you.

Lang Lei, on behalf of Asian Americans Advancing Justice Southern California, we urge the Committee to increase funding for immigrant legal services. One in seven Asian immigrants in California is undocumented, many. Many of whom cannot access legal aid services due to lack of language access, which leaves them defenseless in court.

Many of these communities are now facing detention, deportation, and also family separation, all without access to legal aid. It's critical that you support funding for legal access. Thank you.

Thank you so much.

Good morning, vice chair and members, I'm Ryan Joy. On behalf of the Partnership End Domestic Violence, we'd like to thank Subcommitee 6 for recommending a $100 million backfill for the Victims of Crime act. And we urge this committee to continue pushing for that money until the Governor signs a budget agreement. Thank you.

Thank you.

Good morning. Craig Pulsar, on behalf of Equality California, appreciate the Legislature rejecting the proposed cuts to the Office of Health Equity. This includes the California Reducing Disparities Project, the LBTQ Health Equity Initiative, the the Reproductive Justice Fund, and support for Foster Youth. Quality

California is also grateful for protecting funding for Planned Parenthood as well as the additional investments in the TGI Wellness Fund and the ADAP package to support programs experiencing a loss of federal HIV funding.

And lastly, we stand in solidarity with the Health for All Coalition and urge the Legislature to do everything it can to protect access to healthcare for immigrant communities. Thank you.

Thank you.

Thank you. members.