Senate Standing Committee on Budget and Fiscal Review

The Senate Committee on Budget and Fiscal Review will come to order. We are too short of a quorum and when we get a quorum we will call the quorum. We're holding this Committee hearing here in 1021 O Street, room 1200. Public comment will be heard after the presentation and discussion.

I will also note for the record we were unable to have public comment at our first hearing in the governor's budget on January 21st. So I invite Members of the public to make comments on this or the next several full budget hearings in February on any part of the Governor's proposal.

It's important that we hear from you today. We will hear an early action bill, Assembly Bill 106, a budget bill junior amending the 2025 Budget Act. As we will hear from the presentation to come. The budget bill before us today provides one time funding to ensure reproductive health providers can continue operations in face of federal reductions.

I should add just for everyone that we've all read that there's been an agreement on transportation funding. We expect that that will likely be another early action item at some point in the near future and who knows, maybe some technical changes as well.

But we are moving ahead today on AB106 and it is very to fill in behind the federal reductions on this. The only major part of the federal HR one that took effect immediately was on Planned Parenthood. All the rest took effect at a later time. And this is an action with regard to the budget.

And then let me ask before we move to our witnesses if the Vice Chair has any opening comments. I'll wait for the presentation and then join in the discussion. Great then. And we will allow obviously Members comments and questions after the presentation.

So we have the Department of Finance and the Legislative Analyst Office with us today for an overview of this proposal. We will now begin with Erica Lee from the Department of Finance. We also have Carolyn Chu from the Legislative Analyst to answer any questions. So and if she's interested in making comments doing that as well.

So we will go to Ms. Lee. Thank you. Welcome to the Committee.

Thank you very much. Good afternoon. Chair Laird, Vice Chair Niello and Members of the Committee. Erica Lee with the Department of Finance. And here to present on AB106 which is a budget bill junior that amends the 2025 Budget Act.

As was stated, AB106 includes 90 million one time General Fund in this current year 2025 for grants to reproductive health providers that have been impacted by the one year federal HR1 prohibition on Medicaid funding for these entities.

And these particular providers cannot bill Medi Cal for the duration of the federal prohibition, which is through July 4th of this year. In response, this bill includes 90 million one time General Fund to support these providers. I'd just like to note that the 2025 Budget Act did include funding for Medi Cal billing.

However, due to the prohibition, these ENT can no longer access those funds. Which is why the Administration is proposing this grant program administered by the Department of Healthcare Access and Information. And with that, I conclude my presentation and we are happy to respond to questions at the end.

Thank you. And before I ask the Legislative Analyst if there are any additional comments, a quorum has arrived, so would you please call the roll.

[Roll call]

We have a quorum. Thank you very much. And let me ask if you have any comments you would like to.

Carolyn Chu from the Legislative Analyst Office. Nothing to add, but happy to answer questions.

Thank you very much. Then the matter is back before the Committee. Do we have questions or comments from Committee Members? Pardon? I have a motion from Senator Durazzo were that was that. Okay. A question from Senator Ochoa Bog.

Did I just start? Yes. Okay. Thank you so much. So a couple of questions. I'm kind of curious. So it's my understanding that the original proposed governor's report or budget proposal had a $60 million General Fund for these, for these clinics. And then this particular trailer bill has come in at 90 million appropriation.

What is the rationale behind that increase?

Yes. So at the time, the 60 million was based on information, point time information. And since then we've had more conversation and have been provided more data. So that number has gone, has changed from 60 million to 90 million. And that data is from Planned Parenthood themselves.

Or this data was from providers that would be eligible for this. So Planned Parenthood is one of those providers. What's another provider? Because I believe we've been in discussions with Planned Parenthood specifically.

Okay. So we don't have any other qualified providers that have been listed as providing this information. It's been Planned Parenthood solely.

Sanal Patel with the Department of Finance. So we are aware of Planned Parenthood's, you know, the situation with respect to HR1. And as you'll know in the provisional language, it does outline a grant distribution process so that if there are other applicants that meet the requirements, they could in theory apply for and be eligible for grant funding.

And those requirements would be.

That's pursuant to the provisional language, the Department of Healthcare Access and Information would establish a grant program which would detail the methodology, the eligibility criteria, and then once they put this into out for the public to apply for providers, it would detail what those were.

So we don't have the specifics of what the grant program would be, but this is pretty consistent with other grant programs in terms of the Department would develop the methodology and explain what the criteria is for applicants.

Okay, so I'm kind of curious now as we've been talking about the different grant grant programs and money going towards a grant program. So curious. We know that many hospitals are currently struggling, especially in rural areas like mine.

There's many hospitals that literally are either closing their labor and delivery rooms, they are maternity wards that literally don't have any money. They're closing. So we have folks that are traveling to deliver babies two to three hours, four hours, depending on where they live. That's incredibly difficult for them.

And we have approved a loan program for some struggling hospitals in California. Loans, not grants. How did you folks determine the fact that grants would be available for these clinics but not a loan to get them through? Because that's what we did to these hospitals that are closing these maternity wards. They're not grants.

So why the difference there? How did you folks determine that these hospitals with these closing maternity wards are getting loans but not grants, and these clinics are getting grants.

So in this scenario, these are providers that would have otherwise been eligible for state funding through the Medi Cal program. These are Medi Cal providers who have been impacted by. By the federal prohibition. So in this scenario we understand there's like. I'm going to ask a follow. Go ahead.

We understand that there are bigger sort of budget questions and pictures that we will continue to construe with, but these are providers that would have otherwise been eligible for funding.

And that's what went into the decision making process. But why a grant and not a loan per se? Because these, I'm sure these rural hospitals would also qualify, but they're not getting. They're not getting. They don't have the luxury of getting a grant. They're getting loans.

I think it's a scenario these are not providers that would have otherwise received any kind of federal funding.

This is a bit of a unique scenario, as was mentioned by the chair, that this prohibition on federal Medicaid dollars went into effect on July 4th for providers that were otherwise already eligible and will receive eligibility again on July 42026.

So I do think there's a little bit of a distinction here in the type of provider versus what you've explained with the hospitals who are not otherwise eligible, who do have financial distresses, but who are not otherwise eligible for this federal funding due to the loss of prohibition.

So that did go into our decision making process and it doesn't speak to like the fact that there isn't a separate situation, but we do need to address the issue happening that's resulting in these family planning providers not being eligible for any federal funding at all.

Okay, so but the money is following the patient, right? I mean the prohibition is coming following the patient. So the patients are also that are being, are being impacted in these rural areas.

I'm assuming the prohibition is on providers if you meet. So the definition of a prohibited entity pursuant to HR1 is that you received over a certain threshold of dollars in a specific fiscal year and you provide abortion. So it follows it's actually at the provider level, not at the patient level.

Okay. And then the other question that I had for it is, so according to my notes, the state had already set aside 146 million for planned Parenthood in the current budget year. So can you describe why this existing money is insufficient to cover these clinics until July?

So as Chief Deputy Director Lee mentioned, our data is constantly being updated based on point in time and this additional augmentation reflects the needs of the data. It's in alignment with the data. These are all current year adjustments.

Okay, because I just want to, I want to make sure that we highlight and we put it on record. Let me see, where do I have this? Sorry, there's a lot of notes here. Okay, so what I have here is that.

So the 90 million that you folks are proposing in this budget trailer bill is in addition to the 146 million in special funds paid by managed care plans already in the current 25 and 26 million budget that provides direct funding to abortion providers and that 90 million in managed care organization, MCO tax and a 56 million in the abortion access Fund.

So together here it's about 236 million. And some of the concerns that I have with this is the fact that once again, going back to our hospitals that are struggling, struggling, we've provided loans, not grants at a fraction of that amount.

And not only that, but also the fact that right now within that budget for 2025, it included a $45 million permanent General Fund cut to the self determination program at the Department of Developmental Services. So here we are adding all of these additional funding which is over. Was it $236 million.

While we're cutting funding to folks who are literally disabled in our state and taking away permanent. I mean it's a permanent cut from my understanding. And I'm just trying to figure out the logic behind that. These are folks that cannot help themselves. And yet we're doing permanent cuts here and then allowing not 60, but 90 million.

Now with a new proposed budget. I think it's important for the public to be aware of where the priorities are for the state as far as our disability, our groups that are disabled, our people that are disabled and our citizens who really, really need our help. And we are their safety net. Thank you.

I am going to take the liberty of asking a follow up question or maybe series of questions to clarify what the matter is in front of us. HR1 had only one cut that went into effect with the signing of the bill. The others were delayed. And there was an impact to California for these clinics.

And my understanding is it was in the neighborhood of 335 to 350 million. Do you know what that number is? That is the reduction.

Do you know the reduction?

So one thing I'm going to ask a follow up question that goes to the pieces of that. But I'm going to clarify what the situation.

Right. But I also want to clarify that as noted, this is the immediate impact of HR1 on the clinics. There was funding already in.

I'm about to get there. I'm trying to establish what the total amount of the problem is. Because it was represented that the problem was 90 million. And the total problem that was the cut to California was somewhere around 335 million. I'm just trying to get you to see. Say yes to a number.

I think that is close. We can get you the exact number, but it is higher. Yes, it is higher than the 230 million. That is.

So we are dealing with a $335 million cut. Now there have been different pieces of how we fill in against the 335 million. There was some money from Proposition 35. I'm not sure if that was the precise. That was referred to, but. But the Governor did 180 million, I think in 290 million tranches.

But I don't know if that. I think that was a different one. Then from the MCO there was 55 million and then 10 million in the year. And then if we appropriate 90 million here we get close to the $335 million cut. Is that framework generally the framework that we are dealing with here?

That is correct. And it's also, again, based on conversations that we have had with Planned Parenthood in particular about their loss of federal funding.

But this isn't like a piecemeal thing. This is using different funds over these different things to make up what the cut was so that this isn't like not. Not restoring other programs. We are trying to restore the one cut here that was the one immediate cut to California.

That is correct.

Okay. I'm just trying to establish that because it sounded like it was an incremental thing and it is incremental in how we get to the total number that is the cut that California experienced. Yes. Okay. And now I have a list. Smallwood, Cuevas, Choi, Siorto, Cabolton, and eventually Niello. Is there anybody else? zero, I'm sorry. Men.

Jafar, Weber, Pearson. Okay, then we will go to Senator Smallwood Craig.

Thank you for the clarification, Mr. Chair. And the one thing I can say in this moment is not an accident that we are here having to make this choice. This is an intentional attack on women. It's an intentional attack on the rights of young women's future here in this country.

It's an intentional attack on our budget, which we are, as you so appropriately stated, the cuts seem to be higher and higher and are accumulating in a way that is putting our state in a fiscal crisis.

As a Member who represents South Central Los Angeles right on the border, Planned Parenthood just a couple of years ago opened a much needed health care clinic in our community that is serving some of our most vulnerable seniors, teens, mothers. And these drastic cuts have them on the brink of closure.

At the same time, we already have heard the announcement of over a dozen clinics being closed because of HR1 in our area. There are slated 1300 layoffs that are now being planned in our area because of HR1. And that is the very first, I want to say, tranche of impact that we're going to have to deal with.

So, you know, I'm here obviously to support this rapid response emergency action that we have to take today. But we know this is not going to be the only response that we're going to have to take.

We're going to be hear time and time and time again, whether it's women's rights, whether it's dealing with our universities and research, whether it's dealing with nonprofits who have had, you know, their HIV for black men cut or black women for wellness who are trying to get much needed care.

Whether it's support services for immigrants, this is a disaster. And it's an intentional attack on our communities. It's an intentional attack on our values. And I'm voting obviously in support of this.

But I want to say it's under great duress that we have to be here taking these kinds of votes and spending our time on these kinds of emergency actions. And so I appreciated the chairs correction.

We're putting a band aid on a gaping wound and unfortunately there are so many wounds that we're going to have to try to care for over these coming months.

Thank you, Senator Choi.

Thank you Chair. I would like to register my opposition for two major reasons. Rather than a specific amount of money, which $90 million is not a small amount of money, but there are so many other urgent more important areas as a policy you can set rather than spending $90 million for abortion clinics.

So when we talk about medical care, there are all kinds of different kinds of medical cares. To me, abortion issue is not that a priority over such as prenatal care for pregnant women and then also helping closing rural area hospitals. There are so many issues, even criminal issue supporting Prop 36 can be another priority.

Fire prevention can be disastrous. Fires every year we experience. There are so many pressing areas that we can specifically illustrate one by one. But abortion clinic is not that the priority as I hear that is the woman's right. It's not. It's not caring about their concerns. There are so many different areas.

But in determining important policies there has to be priorities. What is more important issues in spending money and Then also this $90 million comes from General Fund. When our budget is unstable and in coming years we are expecting so big deficits, is it really necessary to spend $90 million from the General Fund?

Secondly, this particular issue is also suggesting this bill. AB 106 is suggesting exempting the grants that we are about to consider is exempting from the Public Records Act. Why there has to be waiving exempting public rights actors nothing to do with this spending money and who's going to get this money. There has to be clear record.

Anybody who would like to analyze how the money was spent that should be open to the public. Transparency is a big issue. So this bill is presenting two different troubling areas. For these reasons, I don't think I can support this bill. Thank you very much.

Senator Sierra to. Thank you very much. I just have a couple of questions. One is kind of in line with what Dr. Troy is. Why are we waiving. Why are we waiving the Public Records act for contracts and things like that? That's all about transparency. And supposedly we're all about transparency nowadays.

So on the your question about the contract exemption, I think as we are here not soon after the governor's budget was released for an early action to respond to something that is an urgent need. And so the contract exemption will allow for those dollars to get out sooner.

In terms of the Public Record act exemption, I think we are sensitive to important health and reproductive health information being available. Simply put, the need for additional protections was necessary. This is not setting a precedent. We've done something similar with the Abortion Access Fund program as well.

And so I would just cite that for those two reasons you see the contract exemption as well as the APA exemption.

So these kind of exemptions create the perception, if it's not reality, and there's probably reality in it, that it kind of sets up programs for a lot of fraud and abuse and we have no way of tracking it, we have no way of exposing it.

So when I see waivers of things like that, I'm thinking, you know what, we're probably waiving that so people don't get to look at it and therefore criticize the program. My second question is about, you know, I've heard about the data says. The data says what's the data and what's driving that data? Is it usage?

Is that what the data is? How many people are accessing the programs that we created for abortion clinics to do their thing? Is that what it is?

I'll turn to my colleague for the.

Thank you.

Laura Yellow, Department of Finance. The data that we have is from the Department of Healthcare Services, and it's based on claims for the current, the current fiscal year and the prior fiscal year. And that's how we estimated what was previously included in the Budget Act and what we're proposing to Fund now.

So the number of claims exceeded what we were thinking they were. They were going to be. Is that.

No, the 20. 2020. The 2025 Budget Act includes funding, and reproductive health providers are not able to access that funding because of the HR1 prohibition.

But we went from 60 to 90. And I was just told that the reason we have 90 is because new data has showed us. And that new data is how many people are accessing the services.

That's correct. There's always a lag in data.

Okay. So two years ago, I believe it was two years ago, we passed a bill that invited people from other states, come on over and we'll give you our free services here in California for California taxpayers to pay for. Is that part of that? Is that part of that data?

The data is based on actual claims that the Department of Healthcare Services has received.

Okay. And the claims are from. Where are they from all California citizens? Are they from people from other states? Are they from people that are not citizens? Where is the data coming from?

They are from individuals that are eligible to receive those services.

Which is all of the above, correct?

Potentially.

Okay, thank you. That's all we need to get at. I have a problem with that because. And the problem isn't, you know, we've already discussed the policies of abortion stuff. It's how come Californians get stuck with the bill for everybody else. It's not even in California. But we're inviting them here to take advantage of our free service.

That's not free. We pay for it. And if that's our policy, then I absolutely don't agree with it. There's a reason the hospitals are going under over usage and underpayment. And basically we have invited that into our system, and now we're paying for it.

And now we want to keep going down that road and keep paying for it. So you've basically answered all I need to know about what we're doing here.

And I think people should be alarmed, because if we're going to keep going down that path and everybody's getting free, free coverage over here, why not everybody come here from the entire United States, come over and have California taxpayers pay for their procedures, whether they're elective or not. It's wrong.

Thank you. Thank you very much, Senator Cabalton. Thank you, Mr. Chair, and thanks to the Administration and the, our leadership here in the Senate for working so hard to get this before us. You know, there was. There, There was no Defund Hospitals act introduced into the Congress in 2025. There was no defund rural hospitals.

The only, only actual proposal that named anything that. That made it into HR1 was defund planned Parenthood by name, specifically defund Planned Parenthood. It wasn't even defund abortions because as we all know, the Hyde Amendment already precluded the Federal Government from funding abortions directly. So that's not what this is about.

By the way, of course, in California, the voters overwhelmingly chose to take the very rare action of amending the Constitution to protect the right of Californians to access abortion not just as a theoretical civil right, but. But by having clinics available to make that right real.

And so this was a direct attack on planned Parenthood as an organization to say no, even though Planned Parenthood clinics, most of what they do, and at least for my constituents, most of what people depend on Planned Parenthood clinics for is many of their basic primary healthcare services, contraception, STI testing, cancer screenings, and other basic primary care.

That's all that's at issue here. And so the defund Planned Parenthood act was to eliminate all Medicaid funding for those basic health care services.

That's what this is about when we call them abortion clinics, which is absolutely fine under the California's constitution, but when we say that we are consciously trying to cover over the basic reproductive health and primary health care that so many Californians, women and men, depend on. And so this is.

There's a reason why we had to do $90 million. There's a reason why we have to move expeditiously with the. With the contract provisions and the others that are in this legislation, is because we have a real crisis. And clinic after clinic after clinic has already had to close in California.

But there are so many others that are hanging on by a thread because they are hoping desperately. They've been. They know that the Governor and the Legislature have been committed to preventing that defund Planned Parenthood act from devastating their health care. They know we're working on this.

So those clinics are just barely hanging on, and we have to enact this in order for them to stay viable. So I'm very grateful that the efforts have been undertaken in order to bring us to this point, because there are so many of my own constituents that depend on this. And Senator Small, Cuevas is absolutely right.

This is intentional. Obviously, you cannot have a defund act that specifically names one of the most important providers of health care in this state and not have it be intentional and not have it be a manufactured crisis and a manufactured emergency.

So, yes, if it was simply a cut to health care funding, generally, we'd be in a different place. But this is not. This was an attempt to eliminate these clinics for Californians, and we can't let that happen. And so this is the appropriate response.

It's based on the data, but the data is just about women and men who've already shown up for these services. These primary health services care services in the clinics need their reimbursements in order to continue to operate. So thanks so much for bringing this forward. I'm absolutely committed to supporting this, this legislation. And I just.

I desperately hope we are not here again because Congress decides to one more time go after Planned Parenthood or any other healthcare provider in the country and certainly here in California. Thanks, Mr. Chair.

Thank you very much, Senator Menjobar.

Copy and paste. I mean, that was beautifully said. And I know the Senator from West Sacramento talked about the other options or the other services that Planned Parenthood provides. And I wanted to add the actual numbers to that.

I mean, it's 87,000 cancer screenings in just a year alone, over 2 million STI testing occur and 400,000 visits just on contraception alone. And, you know, Members from the other IO are talking about where our priorities lie.

I mean, we wouldn't be in this situation if the federal Administration did not decide to cut a direct, put a target, a bullseye target on Planned Parenthood. We'd be able to address all the other priorities that we need to address and not have to focus on this.

But we have to focus on this because we know that the health crisis in California is real. We are struggling in being able to provide all the resources under Medi Cal. And it shows that 47% of women under Medi Cal choose Planned Parenthood for their services. That's close to 50% of the people on Medi Cal.

And we're already dealing with the big issue with Medi Cal. Imagine how big of a hole we do be and if we did not provide this preventative care that Planned Parenthood provides. So I don't want to be here. I don't want to be having this conversation. I don't have to want to put aside $90 million for this.

But we have to. We have to be responsible. So if we're asking about our priorities, I would ask my colleagues on the other side to talk to your counterparts in the Federal Government and say, don't put us in this situation again. So we don't have to have this conversation.

Thank you very much, Senator Weber Pearson.

Thank you, Chair. I want to thank everyone so much for coming to do to give us this presentation. Just want some clarification, just because of some things that I have heard from different Members up here.

This funding that we are, that we will be voting on today is to essentially replace the funding that these particular entities no longer get from the Federal Government. Is that correct?

That is correct. And as I said earlier, there was funding in the current year's budget that they are no longer able to access as a result of the freeze due to HR1. And so this is to substitute for that.

Okay, so this is funding that they would have gotten from the Federal Government that they are no longer getting. The Federal Government does not pay for abortion Services, Correct? Correct. Correct.

So as we sit up here and we talk about us funding abortion clinics, that's not actually accurate because this money, which they would have gotten from the Federal Government, was never going to go to pay for abortion services, correct? That's correct.

So instead, what we're talking about, when we're talking about, you know, why would we give these clinics this money is because these clinics serve an essential role in our communities, whether we are from a big city or a rural area, a small city, an inner city, and some of my other colleagues talked about that.

You know, we talk about access, we talk about need for more preventative care when we're talking about the ability for people to go and get their mammograms, their Pap smears, their birth control, their STI screening. So that is essentially what this money is funding, correct? That's correct.

And I would say that I do think that is an essential service. Now, I may be biased because I'm an OBGYN and a woman, but. But I do think that it is extremely important for people to be able to access preventative care for them to be able to go. Someone mentioned pregnancy care.

Some of these places provide early prenatal care. And so these clinics are serving a significant need in our communities for our women, for our families. We are not funding abortion.

We are funding the money that this Federal Government has chosen to take away from our small communities, from our rural areas that do disproportionately impact women, and unfortunately, women of color.

As we see some of these things like breast cancer, cervical cancer, that you can get screening for at these clinics with this funding that the Federal Government has removed disproportionately impacts black and brown women.

So I just want to make it clear because I was thinking, I was in a different hearing and you know, since we were talking so much about abortion. This funding is not for abortion care. Federal government does not cover abortion care.

We are replacing the money that the Federal Government has chosen to remove from these institutions that provide basic preventative, well, women health care for people in all of our districts. Thank you.

Thank you very much, Senator Gomez Reyes.

Thank you, Mr. Chair. I certainly appreciate that our good Senator. Who is an obgyn, has provided most. Of the information and comments that I. Would have wanted to share. There has been a few comments. There have been a few comments that. Say the public needs to know. The public needs to know.

Something that I would like to have. Answered is. We already know we're not. Funding the abortions themselves, but. What percentage. Of the services that you provide are actually abortions.

We don't have that information at this time. We can provide that.

The numbers that I have seen are 3 to 4%. Does that sound reasonably accurate?

Yes, that's right.

Thank you. And I think that referring to them as abortion clinics, I think minimizes the absolute necessity of the services that are being provided. These are medical clinics, as my colleagues have said. They provide basic health care services not just to women, but to men also.

And I thank you for the services that are provided in our communities. Thank you. Senator Blakespear.

Thank you. I appreciate the passion that's brought to this topic by my colleagues. And I just want to add my voice to the support of this and recognize what Senator Other good Senator from San Diego brought up about the fact that this money is backfilling these really important services, including cancer screenings, contraception, STI testing, mammograms, prenatal care.

But it's also really important to recognize that abortion care is healthcare. And in California, we do support Planned Parenthood, and we do want women to be able to access the whole range of options for them to live a free and autonomous and in charge of their own body life.

And so recognizing, I don't, I don't see it as a problem that 3 to 4% of what planned Parenthood does is abortion care. And I don't really care what the percentage is.

I see that as part of the health care spectrum that women will seek and have always sought and need in order to have control of their own body and their own destiny and their own life and their own choices.

And we shouldn't shy away from recognizing the critically important role that Planned Parenthood provides when they provide that service.

And it's important, I think, to also say that the fact that 50% of patients are choosing a Planned Parenthood clinic when they're on Medi Cal is because of that supportive environment, because they know they're going to have the range of options and they want to be able to seek care in an environment that is not going to be judgmental of the different options that they might want to seek.

So, you know, recognizing abortion care as foundational for health care, as something that's part of women's health, as something that California supports, when we support women, is just a critical value. And it's important that we say it and we say it out loud and we recognize it as part of the landscape.

And I'm very happy to be here on the Budget Committee able to support this today.

Thank you very much, Senator Niello. Thank you, Mr.

Chair. I think it's important to point out without launching into the debate because frankly, this particular debate can typically not be bridged. But the fact of the matter is underlying this is pro life versus pro choice positions. I think that's fairly obvious, but a couple of points.

First of all, it's pointed out that this is because of HR1 and action taken there. Is it the plan of the Administration to come forward with augmentations to the budget for every impact of HR1 that the Administration doesn't like?

I think I noted this at the first hearing that we had here a couple weeks ago that the state of California is not in a position where we can backfill, but we are in a position where the Administration wants to work with the Legislature on those issues that we share and that we agree on in regards to priorities and what we can afford to backfill.

And obviously we are facing a difficult budget year. We're facing structural deficits. And that makes that question even harder, which is why the partnership with the Legislature on what those shared priorities are is going to be very important.

So to a direct answer to your question is we aren't able to backfill for all those lost federal funds, but we definitely want to have conversations about where we can now and in the near future.

So it will be within affordability those things that are, from a policy perspective, particularly valuable to the Administration.

We will put forward things that are priorities for the Administration and we expect the Legislature will also put forward those that are priorities for them and as always, to discuss and come up with what that ultimately looks like in the final budget.

I'll speak to that. Senator Smallwood, Cuevas and others have articulated this as an attack, the reduction in funding being an attack. I'd be careful with that.

I understand the emotion behind the issue, but I'd be careful with that because a logical conclusion there would be that any negative adjustment in the budget is going to be an attack on whomever that is affected. And we have that very serious structural deficit that we are going to have to address.

A quick point with regard to the issue of lack of transparency, I think that Senator Syrto raised a very good issue that we're not going to know really where this money goes. And it seems like we're adopting a formal position of lack of transparency.

Just today there's a news report about a Bill that will specifically shield information on the high speed rail project from public consumption. This is troubling. Two examples of it. There are others that we could talk about, but I don't want to extend this hearing for things that are adjacent. But that is a troubling.

It seems to be we're adopting lack of transparency almost as a formal policy. Now, a budget is a statement of priorities, fundamentally a statement of priorities. And by this action, we're essentially stating that this issue has a higher priority than a few other things. Number one, Proposition 36 funding.

There is some in the current budget, but it is wholly inadequate. And there is nothing in the governor's January proposal. And Senator Cabaldon rightly talked about. The voters spoke with regard to abortion rights, and I agree with that. The voters did Spike spake with regard to abortion rights. I don't agree with it, but they did.

The voters also spoke about Proposition 36 and public safety. Safety in the context of Proposition 36. I do agree with that. The Governor clearly does not. So the Planned Parenthood funding is seemingly by choice having a higher priority than the choice of the voters with regard to Proposition 36 and with regard to that issue of abortion funding.

Good point by Senator Weber Pearson, except that the dollars that we're talking about are not federal dollars. They're not restricted from funding abortions. The dollars are coming from the state. So what is going to happen with them? I don't know.

I'm not going to allege that they're all going to go to Fund abortions, but I am going to say they certainly can. There's no Hyde amendment in the state of California, so that's somewhat of a compromised point. This has a higher priority than has been pointed out.

Those with developmental disabilities, particularly with regard to the self determination program, drastically cut back. So these clinics are more important than those folks who are severely, severely disabled. This has a higher priority than the health of job creators in the state of California. Our employers.

We have a huge debt to the Federal Government for unemployment insurance that as long as it is unpaid, is going to create increasing costs to the employers of the state for every employee that they hire, serving to discourage them from hiring those employees.

And I would point out, as everybody knows, not news, California is the only state in the country that did not pay the debt that was created by the shutdown of the pandemic. $20 billion.

And in the current budget and the proposal for the upcoming budget, a goose egg well describes the amount of money allocated to pay back that debt. It's a statement of priority of our job creators. The last one I'll talk about is rural hospitals, because this one is truly troubling.

Christopher Cabaldon, or Acceder Cabaldon, said that we have a real crisis with regard to these clinics. I'm not going to debate that point, but that ignores the real crisis that we have with regard to rural hospitals. What proportion of people that take advantage of rural hospital services that still exist are Medi cal?

You probably don't know the proportion. I'm not going to ask you to give me a proportion. But you have to admit it's high. And it's been said that most, I think most of the patients that Planned Parenthood clinics serve, our medi cal patients, we got the same thing. And we're not doing anything for rural hospitals.

And isn't it interesting that Planned Parenthood provides health care but also abortions and rural hospitals have labor and delivering wards, they're delivering babies and they're providing that health care care, and they're closing. And the people that live in those areas have no other options unless they drive 50 miles plus. That, I would suggest is a crisis.

It was also stated, I think, by Senator Weber Pearson, that clinics serve an essential role. I won't debate the point. Rural hospitals serve an essential role.

So we are, by voting for this and ignoring that, we are saying that Planned Parenthood's health clinics have a higher priority to us than any of those other things that I mentioned, as well as their survival of rural hospitals.

That's a problem for me. Thanks. I have one more person on the list and it's Senator Durazzo. And then I'm going to make a few comments and we're going to public comment unless there's somebody else that I don't want to encourage it. Senator Perez, you'll follow Senator Durazzo.

Well, then I've got more to turn my time. That's what I was. Exactly what I was afraid of. Senator Durazzo. I'll turn my time over to Senator Webb Pierson. But I just want to say I am supporting this budget item because I know that it will save clinics who provide essential family health care services in our communities.

I do not want to see those services closed down. And I, like many of us here, are fighters for health for all and no distinctions. This is a very, very explicit, deliberate way of going after women's services, family planning services, and we should be very clear about that.

This is not choosing between health care and distressed hospitals and the other fake proposals that have been stated here. This is about saving on an emergency basis what has been triggered and caused by the federal Administration. Can I hand my a minute I had left over? Go for it, Senator. I'm giving you a minute. Of my time.

oh, no. I just wanted to say that I. Think all of us up here are. Very concerned about all of our hospitals, especially our rural and small hospitals. One of the good things, though, about these clinics is that they help keep people out of hospitals. And we talk about access and we.

Talk about how expensive health care is. I would rather someone have access to. Go and get a pap smear than. Have to manage their cervical cancer. And I have had those patients. So I just wanted to put that out there.

Thank you very much. And that completes. Senator Press.

Appreciated the conversation today. You know, the one thing that I'll just add, and I'm sure that my colleagues have brought this up, but just because it was mentioned, you know, by Senator Niello is, you know, because of the Hyde Amendment, federal funds cannot be used for abortion.

And I know you just referenced that, but this was clearly an attack on Planned Parenthood's operations overall. And you know, that means, as you know, Senator Weber Pearson just mentioned Pap smears, STIs, STD testing, all of the other services that Planned Parenthood provides. And as a woman, I know how critical those clinics are.

I have one that is very close to my home that I've certainly gone to before. I know many family and friends who have relied on these places for services. And so I do think it's incredibly important that we do this.

And you know, talking about transparency and everything, I actually think this is very transparent in terms of what we're doing is continuing to make sure that we're funding women's, women's health services, something that I think we all understand and know is incredibly critical. So I just want to highlight that and will be strongly supporting this.

You know, I've been meeting with Planned Parenthood and have been discussing with them the financial impacts, especially our local affiliates have been facing. And it's been really devastating. But they have done the hard work to continue to keep their doors open because they know that they provide life saving services to people all over California.

But when I read in the news on a regular basis that you have, you know, young women who are dying because they can't get basic access to care in, you know, conservative rural areas across the country because of abortion bans or because Planned Parenthood clinics have been closed, you know, those things are horrifying and those events should not be happening in the United States, it's incredibly concerning.

Urgent. I vote. Thank you.

Thank you very much. That completes my list. I'm going to make a few comments and then we are going to Go to public testimony. So if you're going to do public testimony, please stand ready. I wanted to inject some facts into the discussion based on some of the questions.

First, we will be having our next hearing on HR1. So when we meet, and I believe it will be the hearing we have next week, we will be examining that and going into depth. So some of the other issues will come up there. This is based on the existing amount of, of money that goes to these clinics.

If the number is 335 million, that is what goes without abortions. So we are funding the level of service without abortions that exist at the existing clinics from the one I am most familiar with that is in my was in my hometown. This is a broad level of health services. This isn't just reproductive care.

It is a broad level of care with people coming in and getting medical treatment. So what we are doing, what the Federal Government is doing is they are penalizing clinics that deliver certain services that weren't funded by the Federal Government by cutting General medical care to thousands of people. That is what's happening here.

And to clarify one thing, because there was a question about ongoing this was a one time cut in this budget. It will take an act of Congress and a signature of the President to continue it in a second year.

And if, if things are going and they just approved the continuing resolution or whatever it is on health and human services, it did not include a further cut on this when that was approved. So we are taking ongoing services that are General health services at the level at which they have been funded, filling behind it.

And we're doing that because it was an emergency that was immediately upon signature. These cuts have been in effect for months. And so to compare it to other things we will consider in the budget that have not been cut yet is not an apt comparison. And we will consider all these other things in the budget.

And as somebody that has spent most of the time in the Senate trying to sell save a rural hospital, the irony is is we saved it. And this is the year it was going to be the first year in the black for six years.

And it's going back into the red because of the very federal Bill we're talking about that cuts the rates to the hospitals. And so obviously we're going to talk about that as we go through the budget. But that that cut hasn't taken effect yet.

This cut has taken effect now and it is affecting $335 million of General Health Care Services that did not include abortion. And I think it is very important to make that clear in what we have in front of us. With that, we will move to public testimony. This is the opportunity for anybody here to address the Committee.

Please state your name and your organization and we will allow comments in General on the budget. But obviously we hope you're going to testify on what we're hearing. So welcome to the Committee.

And we will take formally recognize the motion and take a vote after the public comment.

Thank you.

Thank you. Angela Pontus, on behalf of Planned Parenthood, affiliates of California and strong support, thank you for hearing this Bill today.

Thank you very much.

Chair Members Kathy Mossberg with Essential Access Health want to echo the comments of Planned Parenthood. Thank you so much for your continued. Commitment in this issue area and moving. This along so quickly. Look forward to having further discussions in the regular budget process about other areas.

In reproductive health that we that we need desperately need funding for as well. Thank you. Thank you very much.

Good afternoon. Chair Members. Whitney Francis with the Western center on Law and Poverty. We appreciate the legislature's leadership on this issue and we're in support of this Bill Fund family planning providers impacted by targeted federal cuts as these clinics overwhelmingly serve Medi Cal Members by providing essential reproductive health care services.

Thank you very much.

Good afternoon. Eric Doughty, on behalf of the California Dental association here on the non AB106 issue, CDA urges the Legislature to reevaluate the cuts to Medi Cal dental. It's about a $362 million cut, a billion dollars when you take into account the federal match. It's overall a third of the Medi Cal dental program.

The reduction is also a rate cut of about 40% to providers that really cannot be made up. So the critical services that they provide would lead to more emergency room visits. We really don't want to see that in this environment. So we look forward to working with you moving forward through this budget cycle. Thank you.

Thank you very much. And just for people that might not have been here when we started because we didn't have public comment after our first hearing, we did say that if anybody had a comment on something that wasn't this item, they can make it. So welcome to the Committee.

Thank you so much. Angela Hill, California Medical Association I'd like to thank the Committee for your decisive action and the Legislature for AB106. CMA is in support and really applauds your efforts to protect these clinics providing reproductive care. Thank you.

Thank you very much. Hello all. EJ Aguayo, on behalf of Cafp, just want to express support for ab. Can you tell us what the acronym was you just said? California Academy of Family Physicians. Thank you very much. Absolutely. Absolutely. In support of AB 106 to support our state's critical safety net healthcare services. Thank you.

Thank you very much.

Good afternoon, Chair and Members. Omar Al Tamimi with the California Pan Ethnic Health Network here in support. As the Federal Government has created many funding gaps for a number of programs across the state, it's important for the. State to look for ways to backfill. Some of the ways, some of those gaps that exist like we did.

Thank you.

Thank you very much. Thank you, Mr. Chair. Ryan Spencer, on behalf of the American College of OB GYN's District 9. We're in support of AB106, the reasons previously stated. Thank you. Thank you very much.

Mr. Chair and Members. Aaron Evans, on behalf of Santa Clara County, really appreciate the opportunity to make comments. Well, I should say the county very much supports reproductive health care, but I'll also make comments more broadly as it relates to HR1. The county of Santa Clara operates the second largest public hospital system in the state.

And we operate two of the three. Trauma centers and burn centers that serve our whole region. These critical life saving services are at risk due to HR1. And so we look forward to partnering. With the state in a few different. Ways to preserve enrollment in these important services. Medi CAL and CalFresh.

To provide dedicated state funding for public hospital systems as well as to allocate new resources to counties who may be. Needing to serve increased uninsured. Excuse me. Populations. Thank you. We look forward to next week's hearing.

Good afternoon, My name is Dan Oakenfuss. I'm with the California foundation for Independent Living Centers and here to express our concerns about proposed budget cuts affecting critical. Supports for older adults and people with disabilities. Namely cuts to ihss, the reduction of the IHSS residual program and the elimination of the IHSS backup provider system.

Thank you so much for this opportunity. Thank you very much.

Good afternoon Mr. Chair and Members. Raymond Contreras, on behalf of Habitat for Humanity California, specifically on the CalHome program. It is the only state program that addresses the supply side of the housing crisis in California for low income first time home buyers.

Last year the state budget allocated $0 for Calhoun, which means there will not be another NOFA this year. The program will officially be inoperative, leaving hundreds of units in the pipeline without adequate funding. It is also important to note that Habitat and their homeowners cannot use the down payment assistance program to build new units.

Those programs are reserved for purchase of existing homes with traditional market rate interest mortgages. The state must consider home ownership as part of the continuum of housing when we build new for sale units for low income families. The state can't continue to ignore this program and let it slip through the cracks. Please support the $500 million.

Ask for Calhoun. Thank you.

Thank you very much. That completes our public comment. It's back for action. Senator Durazzo had earlier made a motion. Unless there's somebody that desperately thinks something has been left unsaid, we will move to a vote. Then police call the roll and the motion is do pass on AB 106.

AB 106. The motion is due. Pass. Senator Slayer.

Aye.

Laird. Aye. Niello.

No.

Niello. No. Archuleta. Aye. Archuleta. Aye. Blakespear. Blakespear. Aye. Cabaldin. Cabaldon. Aye. Troy. No. Choi. No. Durasso. Durazo. Aye. Grove. Hurtado. Hurtado. Aye. McNerney. McNerney. Aye. Manjabar. Aye Mentor. By Aye. Ochoa. Bold. Ochoa. Bogno. Perez. Perez. Aye. Reyes. Reyes. Aye. Richardson. Sierto. Sierra. To no. Smallwood. Cuevas. Smallwood. Cuevas. Aye. Weber Pearson. Weber. Pearson. Aye.

That passes. What is the 12? 4 that passes and will be reported out. That completes our business. Thank you. Thank everybody for participating in this hearing. The Senate Committee on Budget and Fiscal Review stands adjourned.