Assembly Standing Committee on Budget

Alright. Good afternoon, everybody. Welcome to the Assembly Budget Committee. We are delighted that you could join us today as we face our constitutional deadline. We are here today to consider the 2026 Budget Act, which we anticipate will be up for consideration on the floor later this evening.

And this, this bill, which, represents the compromise between the assembly, and our partners in the Senate is what we're going to be discussing at our hearing today. And just to give people a sense of what our agenda is, I'm gonna make some opening remarks. I'm gonna turn it over to our vice chair for any opening remarks. We are then gonna have an opportunity to hear from the Assembly Budget Committee and from, Jason Sisney and the speaker's office about our legislative budget.

And then I'm gonna turn it over to our partners at the Department of Finance, for any of their comments or thoughts. And then I'm gonna invite our budget subcommittee chairs to offer some, remarks as well, and just wanna take the first of what I I hope will be many opportunities to thank our budget subcommittee chairs for their tremendous work this year. After that, we're gonna go turn to questions and comments from members. And then finally, we will open it up for public comment before we adjourn the hearing.

I did also just want to start by thanking our Assembly Budget Committee staff for their incredible work over the past several months. We have had 62 hearings. So I wanna thank both the staff and then especially the members of the committee who were deeply engaged in all of those hearings, doing all of the hard work, and helping to bring us to this moment. So thank you to everybody who has done that. Mister Aaron's always bringing the good energy. We appreciate it. Just to just to level set, I'm really proud of the fact that we have gotten to this moment after 62 hearings.

I'm really grateful that the budget that we're going to be discussing today follows the general themes of the that the assembly's budget road map road map set forward trying to navigate this moment in a thoughtful manner. We have talked, in previous years and again this year about the balance between compassion and fiscal responsibility that is at the centerpiece of our, budget conversation.

And so what we are discussing today, the twenty twenty twenty six budget act, aligns with the governor's May revision in that it balances the budget for both this year and next year. It reduces the structural deficit by more than half, so we refuse to kick the can down the road, and it builds up $29,000,000,000 in total reserves.

And also, we anticipate that as part of this budget final budget deal that we will make much needed important reforms to our rainy day fund that we will put before the vote voters so that we can continue to make sure that we are prepared for whatever the future may bring us.

At the same time, we also leaned in very, very hard on the the compassion aspect of balancing compassion and fiscal responsibility. And even though we have faced just devastating cuts at the federal level, tens of billions of dollars of cuts at the federal level from HR 1 and and and otherwise, we have worked hard to protect the programs and services that serve working families, that benefit our most vulnerable communities, that are core to affordability, and that are core to protecting our safety net here.

And you'll hear from some of our sub chairs about the important work that they've done to protect health coverage, to protect hospitals and clinics and food banks, to secure record funding for public education, to protect our world class higher education institutions, and to make important progress on priorities like childcare, wildfire prevention, housing, and, of course, to keep our communities safe. And so with that, again, just wanna thank our extraordinarily hardworking and talented budget subcommittee chairs for the work that they have done in.

They have not shied away from the task in front of them, rolling up their sleeves, working with members of the committee, asking the tough questions, and to quote, to quote doctor doctor Jackson, really being surgical in the way that they have made their choices, as we have thought to navigate these tough waters.

So thank you to everyone who has joined us today. I look forward to the conversation ahead of us. And then, of course, we we are very much looking forward to the conversation with our partners in the administration as we look to bring this this lengthy but important process to its conclusion before the new fiscal year.

So with that, I will again extend my thanks to everybody who has worked hard to bring us to this this milestone in the moment and and turn it over to our vice chair for any opening remarks.

Well, perfect. And I wanna make sure that I'm thanking the chair of the budget. And not only that, also thanking a lot of the staff that has been working on this. State of California is in a very interesting position. We are the richest state and the richest country in the history of the world, and we have a budget that is fairly large that actually reflects that.

And while at times we agree or disagree on policies and appropriations, I just wanna make sure that I'm truly thanking the chair as well for always having a level of decorum and a lot of the staff that have actually worked when it comes to answering questions and identifying that. So I look forward to listening to the presentations. I know everybody has comments that they're gonna make, and I thank again the chair.

Thank you very much to our vice chair. With that, I'm going to invite, Jason Sisney from Speaker Rivas' office and our partners from the Department of Finance, and, of course, our legislative analyst to come forward. Mister Sysni, the floor is yours.

Hello, Jason Sisney, assembly staff, and I'm gonna talk first. You don't have copies of it today. It's on the LAO's website, a handout called overview of the legislative budget plan. It's on the right side of the home page there. They presented the Senate this morning.

I thought it was a good introduction. So I'll actually sort of mirror that as Aye, talk about the the plan before you. And then after that, I will talk about the the specific bills expected to be brought to the assembly floor tonight, including the tax legislation, SB 122 and SB 125. The budget is framed as was the May revision, when, in a context of two realities as the Assembly Democrats roadmap called it.

We live in a time, as the vice chair was pointing out, extraordinary wealth where we have the world's first trillionaire. We have, companies that are doing incredibly well and incredibly profitable, the stock market at near record levels. And that, frankly, is helping the state of California's revenues with our progressive tax code. At the same time, we have all of these challenges coming, from the rising cost and the difficulty that working Californians and people all around the country have. A lot of them caused by changing policy from the Federal Government.

HR 1, eventually will, lead to millions of people no longer being, covered, under the safety net, and that is a reality which state and local governments are grappling with. And federal policies also are raising costs for consumers and businesses and governments. And the budget is framed, in the context of those two realities. Talking from the LAO handout, the general fund condition under the legislative budget is in many respects similar to the May revision. The legislative budget does use a portion of the higher revenues that the LAO projects for the current fiscal year. So it has around $5,000,000,000 more revenues assumed in the 2526 fiscal year than the May revision.

In addition, the legislative budget balances over the next two years, but leaves a lesser reserve in 2728 than the May revision. And between those two things, the greater revenue and the lower reserve in the SFEU, the Special Fund for Economic Uncertainties for 2728. That's how the legislative budget spends more money in the near term while still reducing the structural deficit in future years.

The legislative package allocates the resources that that I mentioned from the higher revenues and the use of, the the SFEU balance to reject some proposed spending reductions and fund new temporary expenditures, leaving reserves pretty similar to the May revision if you count the, Prop 98 reserve about $29,000,000,000 and 26, 27 in reserves. Onto each of the major policy areas in the legislative package, with the higher revenue estimates, the proposition 98 school funding guarantee is about, $2,000,000,000 higher, a cost 25, '26, and '26, 27.

Like the governor's May revision, $3,900,000,000, the so called settle up is not funded under the legislative plan, but the Senate and Assembly do want to work with the governor to come up with a reliable schedule to make schools whole for that obligation. The legislative plan deposits 9 and a half billion into the Prop 98 Reserve, which is 800,000,000 less than May revision, and spends more on a variety of school and community college student support programs and funds higher enrollment growth for community colleges.

In state preschool and childcare, the legislative plan shifts state preschool programs operated by community based organizations into Prop 98 and makes an associated increase to the minimum guarantee. This is called rebenching in Prop 98. It rejects the governor's proposal to reduce funding for childcare slots and provides additional funding for nearly 23,000 new slots.

In health care, which is really the focus of the legislative budget plan trying to delay some of the the cuts that may be necessary to reduce the structural deficit, soften others, reject others. The legislative plan adopts a higher medical asset limit relative to May revision beginning in July 2027 and provides funding to ensure no change the asset limit over the next year. It allows the next governor to decide, in early twenty twenty seven the level of premiums on adults with unsatisfactory immigration status.

So that May revision proposed increasing that premium to 50 from $30. The legislative plan leaves that decision to the next governor early next year. The legislative plan adopts a framework to transition more seniors out of nursing facilities into home and community services. This was a proposal be home soon from the Senate that, the plan adopts in placeholder form, and we'll be discussing that more with the administration in the Senate to the rest of the budget process.

It rejects several other proposed medical budget solutions, provides restoration of nearly all funds that would have been cut from clinics, provides restoration of dental supplemental rates, and and prevents the cut off of dental services to the UIS population over the next year, all of those over the next year. The plan provides additional support to counties including $250,000,000 for public hospitals and provides funding for indigent health care programs at the county level.

All of those help mitigate the effects of HR 1 as well as funding county eligibility staff and expand support for distressed hospitals.

In human services, the plan rejects many of the large reductions proposed by the governor in May. Principally, all proposed reductions to IHSS and adult protective services were rejected. The plan provides targeted primarily 1 time augmentations to a number of human services programs, including county eligibility and other services affected by HR 1. And examples of those targeted augmentations beyond county eligibility include food banks and immigration services programs.

In housing and homelessness, the plan provides additional funding for the multifamily housing program, $200,000,000, a $500,000,000 allocation to the low income housing tax credit, and 900,000,000 for the main, local homelessness services program, HAPP, as well as funding for homelessness programs in the Department of Social Services.

In judiciary and criminal justice, the plan includes a Senate proposal to provide lease revenue bond authority and one time of funding for courthouse and courtroom construction and deferred maintenance and to fund additional judgeships that were authorized in the 2023 law subject to appropriation. The plan includes an unallocated general fund reduction to the Department of Corrections and Rehabilitation and requires an additional prison to be closed in the next couple of years.

That's really the high level of the spending part of the plan, and it's focused on softening, delaying, and in some cases, rejecting some of the big safety net cuts that, that have been proposed, by by the governor and, in so doing, uses one time revenue to do that while making tough decisions on both spending and revenue over the next several years to reduce the structural deficit. Secondly, I said I'll talk about the bills coming before the legislature tonight, the assembly, specifically.

A B 109, the budget act after passage by the Senate, will come to the assembly we expect for concurrence, and that, bill would fulfill the legislature's June 15 constitutional requirement would be delivered to the governor tonight. In addition, three other bills are likely tonight on the floor of the assembly. SB 110 is a technical budget bill, amendment that will be eligible at 10:43PM. And thereafter, we expect, possibly two tax bills, SB 122 and SB 125 to come to the floor of the assembly. SB 125 is the MCO tax that was proposed at the May revision as reflected in the legislative budget plan.

S B 122 is an alternative to the tax credit proposal that was in the May revision and the legislative budget plan. So SB 122 would, in general, generate, according to Department of Finance estimates, more revenue for the state over the next four years, as a result of its alternate tax credit provisions. Thereafter, on an ongoing basis over the long term, it would produce somewhat less revenue than the May revision, but more than current law. Under SB 122, the existing three year limit on business tax credit usage that was adopted beginning in 2024 would be extended to 2029.

Businesses over that period would receive would be eligible to elect to receive refundable credits that would essentially then pay them back for the credits they couldn't use between now and 2029. That would generate more revenue for the state through that period.

After 2029, beginning in 2030, the state would have a new permanent tax limit. The governor proposed a 50% limit at the May revision. This would allow governor this would allow beginning in 2030 businesses to use tax credits to offset no more than 70% of their tax liability. So it is, more of a limit than in current law, but not not as much of a limit as within the May revision. That's the those are the key provisions of SB 122. Those analyses are in the analysis packet that you have, and those are the bills likely, to come up on the floor of the assembly this evening. So with that, thank you.

Thank you very much, mister Sisney. I just wanted to, take a moment of personal, privilege to thank you for all of your incredible hard work and thoughtful guidance, over the past couple months. And I think I speak for everyone on this dais, Democrat and Republican, and I say we are really, really grateful for, everything that you have provided to us as we have navigated these choppy waters. So thank you for your hard work.

With that, I will see we have, our good friend, Erika Li, here from the Department of Finance, would like to, invite DOF to comment, any thoughts you would like to share on the legislative budget package, and also on any of the tax proposals.

Thank you. Good afternoon, Chair Gabriel, Vice Chair Tengipa, and members of the committee. Erika Li with the Department of Finance, and thank you for the opportunity to comment on the, legislature's twenty twenty six, twenty seven, proposed budget. First, I would like to say, and maybe reiterate what what mister Sissne was saying, that the administration does appreciate, the the legislature's framework resembles that at the mayor vision. And specifically, it is balanced through two fiscal, years.

So not just the budget year, 2627, but also 2728. And what what does that mean? That the SFU or the special fund for economic uncertainties is positive. 4,500,000,000 in the budget year, which matches what we had at the mayor vision. It's, smaller.

The legislature's budget plan is, smaller in 2728 at a 122,000,000 versus the mayor vision's 2,100,000,000. But, again, acknowledge the the the hard work of a two two year positive SFU. Additionally, the legislature's budget reduces the out year structural deficits that were identified in the governor's budget and more than halved at the mayor vision.

This was something that was very important to the governor and the administration, not just to deal with the budget year or recent or or near term budget deficits, but to also eat away at some of the structural deficits that we saw in in the out years. In these two ways, legislature's budget architecture does resolve mold the governor's mayor vision.

However, I would note as mister Sisney noted that the the legislature's plan does include additional revenues of a little over 5,000,000,000, as well as a significant amount of new spending proposals that were not part of the mayor vision. Furthermore, the legislature's plan, as mentioned, does maintain the three main revenue proposals with a modification to one of them as was explained that were included in the mayor vision.

It also does maintain some of some of the program reductions in the mayor revision with some modifications as well as proposes some additional solutions. However, the legislature's budget, also proposed delaying some of the solutions that were part of the 2025 budget act. We appreciate the opportunity to comment on this budget.

We look forward to working with the legislature over the next few days to finalize a budget agreement that reflects our shared priorities. As was mentioned, millions of Californians depend on our core health and safety net programs. And with a reduction of federal support, this budget is is very important in maintaining a lot of the services that millions of Californians depend on, and at the same time, developing a budget that is fiscally sound, again, not just for the near term, but for the long term.

And I would just add that in regards to the, the three main revenue proposals that we are in support of, the modification in, SB 122, the modification to the tax credit, proposal as it does provide, additional near term, saving additional revenues, as well as puts into place a permanent fix for the long term. And with that, I'm happy to yield the floor.

Thank you very much, ms Li. Appreciate that, and appreciate the, the the clarification on, SB 122. With that, I just want to, invite our legislative analysts to, offer any comments, he may have. If you're wondering if anybody reads your publications, I read them. I send them to everyone in the caucus, and we are grateful for that direction as well.

Thank you very much, mister chair. I don't have any prepared remarks, but I'm here with my team in case any questions could we could assist with any questions.

Wonderful. Thank you very much. Alright. With that, I want to, now turn back to the dais. I'd I'd like to begin, with what was really the heart and soul of our, Assembly Budget Committee team, which is our sub chairs who have done the hard work of rolling up their sleeves and, looking through each of the programs and services and making the tough decisions. And so just again wanna uplift them and the and the staff for their really hard work. And so let is let's begin with miss Addis.

Thank you so much, mister chair. And I first and foremost wanna say thank you to mister speaker and to our budget chair, for all of your time and hard work to all of the members on our subcommittee, number one, but all of our budget members and budget subcommittee chairs, the hundreds of people who worked with us over the course of this year and traveled to Sacramento to participate in our hearings, I just wanna applaud your dedication.

For many of those folks that traveled up here, it wasn't easy, and it it doesn't continue to be easy. But I really wanna shout out our budget staff who have spent night after night, hour after hour, sometimes staying up overnight, as you know, to deliver what we're, talking about here today. It's really I often say to them, you're doing God's work, and I really do believe that particularly this year.

So thank you. This is my second full year as the assembly budget subcommittee chair, for health, and I'm very, very proud of the work that we've accomplished for Californians this year, particularly in the face of the largest federal rollbacks of health care that we've ever seen in American history. And so when we were coming into this year, we were really forced to grapple with, not just difficult traces, but for some folks, really traces that could be life ending for them.

And it's very serious business when we do that. And at the start, just from a fiscal point of view, we were staring down 30,000,000,000 at least, 30,000,000,000 in federal funding cuts. The LAO estimated that that would cause at least 2,000,000 Californians or over 13% of medical recipients to lose their coverage. In my district alone, that was 15,000 people. Then Congress failed to renew the ACA subsidies, so we saw that millions hundreds of thousands into the millions of people would be losing covered California subsidies and no longer be able to afford that. And meanwhile, we already had hospitals and other providers who are on the brink of failure. So it's a very serious situation.

We worked over the past five months. Our subcommittee al1 held nine hearings. One of them was at least eight hours going deep into the night. At 1 of our hearings, we had over 40 witnesses come and testify about the effects of HR 1, the effects of, the losses that our state was facing. And so we really took in what people had to say to us and took that very seriously.

And most importantly, it was listening to what people were telling us in terms of what it means to lose health care, the devastating effects that that can have on a family, on a child, on a grandma or a grandpa, an aunt or an uncle. And so we made a commitment early on in that subcommittee, and I would say this whole budget really reflects that commitment to not balance the budget on the backs of those most in need and those who are working hard to make ends meet. And what we've what we ended up with, at least on the assembly side, was coming through a 162 line items to make sure that we were very, very careful. And then, of course, our budget team got to work.

And what you see today is the result of all that, and it's something I was, excuse me. I was talking to friends over the weekend, and they were asking me about the California budget. And I said, I would stand behind the budget. And about the California budget. And I said, I would stand behind the budget proposal we've put forward, any day of the week because I think we should all be very, very proud of what we're doing in health care today and what we're putting forward for our next set of first, for our vote on the floor and then hopefully for our next set of negotiations. I think we should be proud of the distressed hospital support that we've put forward.

We know that we've staved off numerous closures and at least helped one hospital reopen already, and we continue to do that work to make sure that communities across California have hospitals for them. We've invested in indigent care and women's health and just regular people's ability to see doctors. That's something that we hear time and time again is that folks just cannot find a doctor in their community.

We also heard loud and clear from Californians who have asked for things like mobile crisis, reproductive and gender affirming care, physician workforce, counties that are facing down these monumental workloads because of HR 1, dental care, care for seniors and for those with disabilities, maternal health, menopausal support, and so much more. And I think anybody who read through those 162 line items would see that we really are putting forward a document and a budget that shows our values and shows the values of this legislature.

So I've said many times before that I believe the budget is a reflection of our values. That's something that's really easy to say when you have a surplus, but it's really challenging to do when you're facing the kinds of cuts that we're facing. And so it's our time to double down, and I would say, mister chair, thank you for doubling down. I think our committee and our legislature has doubled down, and I'm very hopeful, that we continue this work and get this across the finish line. Thank you.

Yeah. Thank you very much, miss Addis. I just wanna thank you for really leading with your values, in these important, and really difficult, conversations that you helped to, work through with the members of your subcommittee and for always reminding us about the human consequences of the decisions that we're making. These are much more than numbers. These are the people that we are charged to serve in really profound consequences for some of these choices. So thank you. I really, really appreciate your hard work. With that, let's continue on to doctor Jackson.

Thank you so much, mister chair. It is, my honor to be able to serve under your leadership. I want to, just commend you for the remarkable skill that you've done and you're leading this budget committee. I wanna thank you for your patience, for all the countless requests that you've received through members, all of the counts constant pressures you've received from members, and even some members stalking you. And what I mean by members, I really mean me.

And so I wanna thank you for that patience as well. Budgets up two has always been guided by three principles. Number one, what is it going to take to ensure that we keep our population as stable as possible? Bad things happen when people get into survival mode that then have ripple effects throughout our society.

Number two, as we look through the data and we look and listen to the countless personal stories, how do we address immediate needs that we see emerging so that we can hopefully prevent the next crisis in California? And then number three, how do we get how do we make sure that we don't get so consumed with the immediate that we forget to plant seeds for the future to ensure, that the next generation is set up for an opportunity to thrive and continue to build out the type of California, that Californians expect us to build.

And then to do that, I've said before, when I thank the advocates, budget staff, my chief of staff, the administration, we really went about this budget as a team together, ensuring that it's gonna take all of us putting our heads together and using our expertise in order to make sure that we do the best with what we have. Oh, and I always forgot to thank the LAO for answering my countless questions and request. Always grateful for that.

There are two sacred responsibilities we knew that we had to uphold in this budget, and that is the fact that our society is judged by really two things. How a society sets up its children for success, And then number two, how it treats its most vulnerable and most for particularly its seniors. And hopefully, as those who go through this budget under see that reflected, in this plan, We were determined to not lose ground, making sure that we don't lose ground in homelessness.

So making sure that we are, funding, the many, anti homelessness programs that are throughout the social safety net, making sure that we don't lose ground in the gains, and investments we've made with intellectual and developmental disability community, making sure that we don't lose ground on setting up the next generation for success, through childcare and other programs. And then how are we gonna make sure that we prevent the next disasters from happening?

Seniors need to know that we see you and we hear you in terms of the fastest growing population falling into homelessness, making sure that we begin to cut that spigot off. It is deplorable. And then we wanted to make sure that counties had the resources that were necessary to get to children who are in danger before it's too late. We wanna make sure, that any child who is in danger is protected. And then lastly, we wanted to ensure that we continue to plant the seeds for the future and making sure that our social safety net is more resilient when the Federal Government goes a different direction.

And so that this budget reflects the fact that we are building a more resilient system and a system that gives us and future legislatures more tools in the future in times like these than we've had before. So I wanna thank everyone. Thank you, mister chair. Thank you to the budget subcommittee members as well who have been great advocates, on behalf, of so many people, in this state. Thank you so much, mister mister chair.

Thank you very much, doctor Jackson. It is an honor to be stalked by you, and, I will say that, your fingerprints are all over this budget, and particularly when it comes to kids and seniors in our most vulnerable communities. And everywhere we see your fingerprints, we see progress for those who are most in need. So thank you for your very able leadership. With that, I wanna turn to, mister Alvarez.

Thank you, mister chair, and, thank you to all of the presenters today and to the colleagues who serve on this budget committee. I wanna start off by saying that as we initiated our work in our subcommittee of, I just counted, 17 hearings, 17 hearings, for which I would like to acknowledge that, mister Fong sitting to my right, doctor Patel sitting to my left, were at every single one of those hearings and participated actively at every single one, and I thank them for that.

Because the product that we have before us today is reflective of that input, and I wanna thank them and thank the members of the public who participated and were patient with us during those those those hearings there. But I think we approached this year with the reality always in the back of our minds that we wanted to make sure that we responsibly put forward a budget that was mindful, first and foremost, of the most vulnerable Californians who were being their well-being was being jeopardized by the actions of the Federal Government through health care and human services.

And that might sound odd to say because we chair the education committee, and we are obviously very focused on kids who are in school, from, you know, preschool all the way through college and university. And we get it got into that, and we'll get into that in a second. But we were mindful that we needed to be very, very careful and prudent with the resources that were allocated mainly through Prop 98, but also in the general fund for higher education. Now, we were prudent with that because there wasn't gonna be much room to do anything much beyond the basics. And so that was really important to me.

And I think it was a as the chair has mentioned and sub chairs have mentioned, the previous two have mentioned, it was it was a, maybe, even unspoken, I would say, approach to the budget that we all were in this together to try to make sure we protected the most vulnerable.

But that was how we did our work. And I'm proud that even within those limitations, which we all had, we have before us a budget proposal that is reflective of still identifying opportunities for us to do better in education because we still have to do better in education. And we've done that in a few ways that I'd like to to highlight. We, we realized, the the reality is that the cost of living increases for everybody in California, is is very real.

And we appreciated that in the May revise. The governor also acknowledged that and created a larger than statutorily required cola for our local school districts, giving them more room to work with as they are facing ever growing costs. That is what is in this budget here today. We also recognize work that the women's caucus, I know, has been leading on for some time.

But I think all of us as either participants in the education system or who have children in the education system, Wanna make sure that we take care of those who take care and teach our our our kids. So paid pregnancy disability leave for educators.

Major, major milestone in California for fourteen weeks. Investing in a teacher credentialing program for classified employees, those who are working in our schools and that we know have the that that, not just the desire, but that calling to work with kids to allow them to move from being classified employees to becoming credentialed employees to serve our teacher shortage needs. Residency programs for teachers, which we know have been proven to be effective at growing teachers and maintaining teachers.

The expanded learning opportunities program tweaks that we've made in this year's budget, they they may seem minor, but the goal here is to ensure that truly every child and every one of our public schools has access to after school programming with ensuring that ELOP is funded, but also prioritizing ACES in twenty first century at schools that don't offer those programs. And so maximizing our dollars here.

Just because often, I know a lot of you have talked about Prop 98 being strong and some growth there. So the you know, probably the least challenging of all our budget discussions, just because we had some resources did not mean we just decided to spend them without thinking through how to do that effectively. And I think that's the message I'd like to share, to everyone.

We identified ways in which we have, seen data and research that shows that investments in education actually mean something, that they've created a difference. And so that's why you see an ongoing investment of an expansion of California community schools because we have seen the research on that.

We are also focusing on the increases this year to special education. The base rate, which hasn't happened in a long time, a significant increase, recognizing that the needs of families and special education has grown, and perhaps the budget has not reflected that in the past. This year, it does. So many, many others. 10 pages worth of, I think, things we can note in the report that is before us for this committee that I strongly suggest anybody who cares about education read through it because I think it's a very good summary of that.

But, just to briefly close here, higher education, which we cannot forget. We have maintained the investments in the world's best higher education system here in California, making sure that they continue to have opportunities for Californians and that our our growth is reflective of the needs of the state. Community colleges also, we have seen enrollment growth in community colleges. They are serving many, many more students than they were. And so we need to make sure that our budget reflects that growth, and it does.

It it accounts for that. It's reflective of that and making sure that our community college districts can serve all the students that walk up to their door because, remember, there is no application process for community colleges. Every single student is allowed to walk on to a community college and be served, as a student. And then lastly, one very, very small fact that scored at $9,000,000 that I I I wanna highlight, because I think it's significant.

The average age of community college students, is much older than your traditional students. Average age is 28. Our Cal Grant system phased these students out from receiving financial aid at the age of 28, meaning that students were left out of receiving financial aid once they were ready to potentially transfer out to a four year degree at that age, which is the average age of of of a student.

This budget recognizes that and with a very small investment raises that to 30 years old, giving them those two years of the average student to be able to get financial aid to achieve their high their higher education goals. It's a small one, but I think a significant one. And those are the types of things that we spent our time on that I hope you see reflected in this budget, colleagues.

And, again, I wanna thank the staff, the committee members, and the chair for all of the focus and work on the entirety of the budget because this is really about all of Californians, and it was an honor to serve as chair of the education budget subcommittee this year. Thank you.

Thank you very much, mister Alvarez. I wanna thank you and your all star committee for the incredible work on education policy, and also, as you mentioned, for, the sensitivity that you brought to understanding the bigger picture and being the ultimate team player. So thank you guys for both the the really, wonderful progress we made in the education space and also, your contributions to the larger effort. With that, we will turn over here to mister Bennett.

Thank you very much, sir Gabriel. You know, I'm not sure that the general public can be as aware of this as as we are up here, but something different happened this year, this spring when it came to the budget. And what I'm referring to is the sense of teamwork that developed here, was really remarkable. And it reminds me that over and over again, when Americans face challenges, that's when we come together. That's when we do, really important work.

And so, that was led by the chair and led by the sub chairs in terms of creating that sense of of teamwork. And I am just very grateful to have been part of a team where so many members were so passionate about making sure the most vulnerable were front and center as we tried to consider the the challenging balancing act that you have to engage in when you look at the budget.

You know, from the perspective of budget sub four where you're dealing with climate, climate change, energy, transportation, natural resources, You're looking much more at long term crisis that are out there. And to to have to try to balance long term issues with short term, are we closing to an emergency room? What are we doing to a social program that is right now getting people off of the streets?

The it's really difficult to do that, and you can really split apart. And when there's surpluses, there's probably more of that feeding. But certainly, that did not happen this time. And so I really do feel grateful and I am sincere when I say to my my fellow sub chairs in particular how well you've done a great job of being passionate and making sure we're all aware of that.

I'd also like to thank the dedicated subcommittee chair members, two of whom are here here, Assemblymember Rogers, Assemblymember Wilson, for being participating and making sure that we had good representation in terms of where the assembly members are on the issues as we had our weekly hearings.

You know, it's really a rare opportunity to work with people that bring moral clarity and and a real policy depth. And that's the opportunity that I had, the honor I had as the chair, both with my colleagues and also with the staff that are out there. Over and over again, I had staff members impress me with just how committed they were to getting it right for California. There was no self centeredness involved.

There was it was all about this is what I think is right, and we might have to disagree, we might have to work that out. But it was really an an honor to be a part of that. Also, great thanks to the legislative analyst office. Over and over again, you came in with some hard recommendations to us and hard suggestions to us. And then to be able to sit down and talk to Jason and talk to Kristen and have you give me those those great insights, that great long term perspective, are just invaluable. The Republican staff members, the Department of Finance, all real professional people to work with.

This budget took important steps in the issues of climate, etcetera, but far more needs to be done. And we look forward to bringing back a comprehensive prop four package, working with the chair later this summer as we move forward. We also will continue to do extensive work with GGRF funding. And I'm still passionate about making sure that we balance the investments in clean trucks and vehicles with the investments in the other ZEV vehicles that we have out there.

But the overall point, I think, I'd like to end with is this budget has become increasingly transparent and increasingly open to the public and to all of the other assembly members, in the last few years. And that's something, that I think goes a long ways towards creating that sense of team. We're all in it together in terms of trying to get things done. And so finally, I've called them out once, but I wanna do it one more time. Shifor and Christine Miyashiro. And I finally think I pronounced her last name right.

Alright? Just my hat is off. Tremendous respect and admiration for what you've done for the people of California in terms of your efforts. Thank you all very much.

Thank you very much, Assemblymember. And I will underscore the thanks to the exceptionally capable staff. And also, just to you, thank you for the attention to detail, the thoughtfulness, the contentiousness. It it rarely a floor session went by when you didn't pull me aside to, update me or have a conversation or check-in on something in the area. And I just appreciate, the incredible sense of public service that you bring to this work. So thank you, for so ably leading that subcommittee. With that, we're gonna turn to the so many superlatives, but we'll just turn for now to Assemblywoman Quirk Silva.

Thank you. So many comments and so little time, but I want to start by reading a quote by Reverend Jim Wallis, which is: budgets are moral documents. It highlights that where you allocate your money reflects exactly what and who you value most in your community or household.

This is my third year on budget and my last budget hearing, and I'm sometimes almost speechless when I think about the work we do, not only with the colleagues that I have here that I'm very grateful for, but, of course, the incredible consultants and staff that I've worked with that do the work. I'll just make this little note: some of the smallest, tiniest offices, so we've got to improve those offices.

And all of you should take a field trip, but that distracts from what I'm saying.

And, you know, putting it simple, and some of you know that I was an elementary school teacher, and we can look in my subcommittee at pages of line items. But that does not reflect the work that is important to Californians. What we know is that not just for three years with the budget deficit, but for decades, Californians have been struggling. We know that when they go to the market, they're counting. Do they have enough for their groceries?

We know when they see gas prices that anxiety comes up. When they look at their rents, we know that they're counting the money that they have at the end of the month to decide, can I send my child to soccer? Can we have a summer camp? So for Californians, what we do here is real. What we do matters.

Just this weekend, I happened to be in a market and happened to pass by a section where they had formula for children. Don't answer. I was a teacher, but how many of you know the price of a can of formula? One can. Don't answer.

Don't answer. A few of you know because your moms probably do. Fifty-nine dollars for a can of formula. So what that tells me is, when people, and, yes, it was a specialty store, it wasn't Target or Walmart.

I think I already shared this with my colleagues, but $59. We've done incredible things to invest in families, universal school meals. But if you are paying $59 for a can of formula, it means you're going to have to cut somewhere. And my fear is for those families that we talk about that are vulnerable. Are they going to start to water down the formula?

And that is real, my friends. So when I look at my subcommittee, there's many, I mean, look at the line items, many, many line items, and they're important. But what we do as a body, we also have to remember that policy affects our budget. Many, many items in our budget, sub five right now, are to fill positions. And they're to fill positions for what we have asked.

Sometimes it's more transparency. Sometimes it's safety. Sometimes it's for reports, but those cost our state dollars. I'm incredibly proud to have worked on what I call the three H's. And, again, elementary school here, the three H's: housing, health care, and human services, to me, are the fundamental basis of what we need to do in government.

If we do not have housing, the foundation, then people fall into homelessness, and we have spent billions of dollars backfilling this. Human services, everything from our CalFresh, all of these things that we know, it's summer. Think of kids who are not going to school. They may not be getting those meals. And, of course, health care.

If people cannot get health care, they simply die faster than others who have health care. So with this budget, I'm very proud that we worked hard. We pushed forward to increase what was initially proposed for housing, adding more dollars to our HPAP. But let me be clear, as the governor has been, there has to be accountability. We cannot put money out there without accountability, and we have more work to do on equity with those funds.

More work, so some of our smaller cities have access to those funds. We added money for low income housing tax credit. From what I understand, the data says there's about 40,000 units in the pipeline that are waiting to be filled. Those dollars need to get to those projects so we can not only build those homes, but build them faster and get people into those homes. And then we did additional funding for multifamily housing.

With that, there's other highlights under this. But, friends, keep an eye on these line items. They may seem mundane, but there's a lot, whether it's cannabis or veterans dollars. We worked hard with 11 hearings. I'm proud of the work we've done.

I want to say thank you to the Department of Finance and to the LAO. Of course, we always started our meeting with: welcome to all your favorite budget sub five committee. And so I appreciate the work, and thank you to Assemblymember Liz Ortega, who participated fully, Assemblymember Chris Ward, Assemblymember Caloza, who added to the conversation, were there and were present. And I believe the work we did will not only uplift Californians, but it's essential work. Thank you so much.

Thank you very much, Assemblymember, and thank you not only for your steady leadership, the historical perspective that you brought to a lot of these conversations, but also just your incredible passion and enthusiasm for the work. We really appreciate it, and I know this budget is better because of your contribution. So thank you. With that, we will now turn to Assemblymember Ramos.

Well, thank you, Chair. First, I'd like to thank my sub six colleagues, Assemblymember Schultz and Assemblymember Lackey, for their dedication to issues of public safety. And as this is his last year, Mr. Lackey added insight to the budget and to the process that we went through. Serving members of this committee, for all of his hard work and collaboration and commitment to public service, Mr. Lackey has truly been a joy to work with in areas that we agreed to.

In addition, I'd like to appreciate the members of the Legislative Women's Caucus, Assemblymembers Bonta, Quirk-Silva, and Ortega, for joining us in our hearing to discuss violence and abuse in women's prisons.

I also want to thank the budget chair and the speaker for their leadership in shepherding this long process, and our Senate partners for crafting a budget that supports the people of the state of California. I also want to thank our budget staff, Bernie and Jennifer and Lindsey, the LAO, Drew, Caitlin, Orlando, and Heather, the Department of Finance, our committee secretaries, Marco, Irene, and Alexa, the sergeants, tech experts, and all of the panelists and members of the public that came to testify on these issues.

We had a series of hearings on a wide range of topics, including issues around the judicial branch in the state of California, tackling issues of Prop 36, remote courts, and court needs. We also had hearings on VOCA and women's prisons, and also the Department of Justice. I am proud of the public safety package that is in this budget bill, which includes investments for victims, rehabilitation, legal aid, and an ongoing commitment to addressing the missing and murdered indigenous persons crisis in the state of California.

Many of these investments have laid a foundation for progress that needs our continued investment and commitment in the state of California. In addition, the solutions that are included in the budget also indicate the legislature's commitment to fiscal responsibility at a time when everyday Californians are struggling to make ends meet. We look forward to continuing to work with the administration in reaching a final agreement that protects people and programs in the responsible manner that we come together here on the budget to be able to move forward.

And the voices of the state of California and the leadership within the assembly continue to move forward. I want to thank you for the opportunity to serve as public safety chair, sub six, in bringing full circle the issues that we just addressed.

Thank you, Mr. Chair.

Thank you very much, Assemblymember Ramos. Thank you for your very thoughtful and steady hand, leading a very difficult committee with a lot of very complicated issues. I really appreciate it. And also for the way that you have given voice to our tribal communities, which is a really important addition to our budget process. So thank you for everything you've done.

With that, we'll turn to our last budget subcommittee chair, Mr. Hart.

Thank you, Mr. Chair. The composition of the budget subcommittee number seven on accountability and oversight is very eclectic. We don't have a set roster. We invite members to join us depending on the subject matter. So I want to thank everybody.

Virtually all the staff of the budget committee worked with me on the various hearings that we had, and we did a lot of hard work. And I just really appreciate this opportunity to highlight some of the work that we did and how it's reflected in the legislative budget. Over the past several months, our subcommittee has examined a common theme across multiple policy areas: ensuring the taxpayer dollars are producing measurable results, increasing transparency, and protecting Californians from growing uncertainty at the federal level.

Our hearing on homeless housing assistance and prevention funding focused on the simple but important question. Are billions of dollars invested in homelessness programs producing measurable outcomes?

And do we have the accountability tools necessary to evaluate success? We heard that flexibility for local governments must be paired with transparency, clear reporting requirements, meaningful performance metrics, and public access to information. The legislative budget advances these same principles by continuing investments in homelessness programs while strengthening accountability and oversight measures to ensure limited state resources are aligned with measurable progress.

Our oversight hearing on the California Department of Corrections and Rehabilitation examined another critical challenge: how to responsibly manage one of the state's largest budgets during a period of declining prison populations and significant fiscal pressures. I'm pleased that the budget reflects those principles by continuing efforts to right size our correctional system, including the closure of an additional state prison.

This action will generate substantial ongoing savings that can be reinvested in higher priorities while ensuring public safety remains protected through a more efficient use of state resources. More recently, this committee examined the serious threat posed by federal efforts to eliminate childcare funding that supports working families across California. Fortunately, those cuts have been temporarily halted by court action. The hearing underscored a broader reality: California must be prepared to respond when federal actions place vulnerable residents at risk.

Child care is not simply a family issue. It is a workforce issue, an economic issue, and a critical support for children's development. The legislative budget responds to that challenge by expanding access to child care and supporting the providers who make that care possible. The agreement adds nearly 23,000 new child care slots, prioritizes infants and toddlers ages zero to three, protects 6,800 existing childcare slots from proposed reductions, and provides a 2% cost of living adjustment for childcare providers.

These investments will help working families remain in the workforce and ensure children continue to have access to safe, high quality care.

Our committee also held a hearing examining the impacts of HR 1 and the significant challenges counties will face in administering Medi-Cal and CalFresh as new federal requirements take effect. We heard that counties are on the front lines of these programs and eligible Californians could lose access to health care and nutrition assistance simply because of bureaucratic barriers. The hearing highlighted the need for additional state support to local governments to keep eligible residents enrolled in these critical safety net programs.

I'm pleased that the legislative budget recognizes this challenge by providing additional funding to counties to help implement these new federal requirements and protect access to essential services for millions of Californians. Taken together, these hearings reinforce three principles that are reflected throughout this budget agreement.

First, accountability matters. Californians deserve to know how public dollars are being spent and what outcomes those investments are producing. Second, fiscal responsibility matters. In a challenging budget environment, every dollar must be directed toward programs that demonstrate results and deliver value for taxpayers. And third, protecting vulnerable Californians matters.

Whether we're discussing homelessness, child care, health care, nutrition assistance, public safety, or other essential services, our responsibility is to ensure that government works effectively for the people who depend on it most. The legislative budget reflects those priorities, and I appreciate the very hard work of our speaker, our budget chair, our sub chairs, the committee members, and the staff, in advancing a budget that emphasizes accountability, transparency, fiscal stewardship, and protection of essential resources.

Thank you very much, Assemblymember. Let me just thank you for the tremendous professionalism and wisdom that you have brought to budget subcommittee seven. You've set a very high standard for that work, and I'm very grateful for that. With that, we are now going to open it up to the broader committee for questions, comments, anything that folks would like to contribute. I have down that Ms. Bonta and Mr. Ward would like to go.

So let's go in that order, and others can get my attention if they want to go as well. But let's, I'm going to start with Mr. Ward.

Thank you, Mr. Chair. To all of our subcommittee members, clearly a lot of work, a lot of months' time, and dedication is going into all the subcommittee hearings that we've had to really vet across all the subject areas, the jurisdictions that we've had.

Being a member of sub five has given me that front row seat and that pleasure to be able to continue to work on things that, unfortunately, we had to continue to fight for as a legislature right now to make sure that we are doing our state's commitment that's necessary to do so to be able to resolve housing and homelessness programs, and you don't do that with zero dollars.

And to start out in a position every January where effective programs that could always have improvements and could always have more accountability continue to be zeroed out has continued to be an outcome that the legislature is focused on, and we rightfully should own that win, that we have been the ones to be able to lead this charge and make sure that when we're thinking about HAPP funding and, indeed, responding to our cities' needs, our local COCs' needs, and responding with even more than we were able to allocate last year, it is going to go a long way to be able to make sure that the programs that are working out there right now have the resources to be able to continue.

Quick plug that we want to think about this in a multiyear fashion. It's very difficult on LIHTC, on HAPP, excuse me, on the multifamily housing program. We hear that from those that are trying to build more affordable housing, that we need to think a little bit more about the out years so that they can plan for developments that will take some time to develop, but that the guarantees will be there.

As the chair of the Assembly Committee on Arts, Entertainment, Sports, and Tourism, I'm grateful that I saw there was some support there from a number, a letter that a number of members had reached out to support a lot of our cultural programs, cultural institutions. We've never funded our cultural districts.

It's a great program that we laud and celebrate and put out press releases on. But despite the fact that we have a very, very difficult time, and we're righteously balancing a lot of other needs to fully fund public education, to work on the responses that our counties and other systems need for HR 1 related impacts, we're able to do a little bit more for long standing needs that Californians have out there.

That said, you know, we've got some ongoing needs and challenges with the California Arts Council that we're not seeing yet. I know we'll have more conversations in late June and into August as the situation continues to develop, and I would certainly encourage the committee and others to be able to take that into consideration as an ongoing need and a priority, especially with California on the world stage in coming years.

We also had a number of members that were interested in supporting a lot of our local media outlets right now.

And while that's not here today, that is going to be an ongoing need. We are seeing trusted local media partners closing their doors altogether, reducing their staff, and that's just going to continue to erode democracy and erode the ability to be able to connect people with their local governments, with their local communities, and further consolidate a lot of our media outlets into corporate media outlets that are otherwise changing, I think, the entire way that we reflect and interact with the public.

And so it's a righteous public investment that we may Wanna take a second look at as well. As the chair of the LGBT caucus, I wanted to express my gratitude for all those out of hand across several subcommittees as well, to be able to support some modest, but in the eyes of those individuals or, those programs, life saving, investments that we have, when we think about the need that we have.

And all of these are largely coming from the hate that we're getting out of Washington, DC, but the need for California to stand up and match, as you heard my colleague from sub five, Ms. Quirk-Silva, mention, you know, the values and the moral response that we have right now through our budget: to support gender affirming care needs that are out there, support our community centers, support our community colleges, support service members who have been dishonorably discharged simply because of who they are, and, importantly and finally, the work that we're doing right now to finally address the rebate fund that we have for the ADAP program, the AIDS Drug Assistance Program, that has been long standing out there right now, helped solve a budget challenge in previous years, but with a significant investment out there on the books to make sure that we are committing ourselves in the coming years to be able to support the programs and pay that back for life-saving support for HIV care and for those afflicted with AIDS

I would also like to be able to get on record, and we may talk about this later tonight as well too, some concern I have representing the Select Committee on Biotechnology and the cluster that we have certainly in San Diego. You know, we've had a disinvestment in our response or our need to be able to support the biotech community.

And while things were very difficult from a budget perspective in recent years, and, you know, they were a partner like anybody else to be a solution in those years, it has sadly become the norm that we are looking at the R&D tax credit in a way and not realizing, I think, the benefit that it brings to California jobs, to the advancements that we have in health care discoveries, and making sure those advancements and those investments are happening right here in California.

So I know there's been some late news there about the permanent utilization of that tax credit. And so as things continue to move forward, I hope that we'll take a fresher look at that as well and try to get that right.

All this is to say, you know, I know that budgets are compromises and there's a lot that goes into it, and I'm very happy and grateful for everyone's partnership in being able to get us to where we are here today, because not everyone's going to get everything they want out of this.

But I would just kind of close and note that, you know, I'm sort of at the midpoint in my career in the legislature and certainly many budgets to look forward to as well. And I know that there are going to be challenging times, and I'm grateful for the attention this year to think about those out years and try to make sure that we're addressing in a better way some of the structural challenges that we have.

But we've looked really closely at a lot of the expenses and a lot of the detail that we have in so many of our programs, and we have to look at the other side of the ledger as well to make sure that we're thinking carefully about revenue questions as well.

There's a lot of unjust application of our tax code, loopholes and other areas that could have provided solutions. And I understand that, you know, the will and the interest was not close to there to be able to, I think, fully vet that conversation here this year.

But we're going to continue to have these incredibly difficult conversations unless we are thinking about rightsizing that and trying to make more just and more fair some of the revenue side of the equation that I think governs what we have to be able to work with, because there are so many public demands out there that we weren't able to meet this year.

And we recognize that, and we're doing the best that we can with what we have, but we probably want to take a step back and look at the bigger picture and appreciate whether or not we're doing everything that we should be doing. So with that, really grateful for all the work that went into this, and I know we're going to have a lot more conversations ahead, in the months and the years to come. Thank you, Mr. Chair.

Thank you very much, Assemblymember. With that, we will turn to Assemblymember Bonta.

Thank you, Chair and members. I want to start out by thanking the speaker and budget chair Gabriel, our budget subcommittee chairs, and their staff for their tireless work on this budget agreement. I think many of you have fielded probably dozens of calls in every single one of these areas where I have engaged. Our budget reflects our values, and I believe this agreement is so much more reflective of California's values than prior iterations, and I'm very thankful for that.

The May revise proposal included provisions such as the $2,000 asset limit test that were untenable for our communities. The asset test limit alone would have threatened coverage for seniors and people with disabilities at the exact moment they can least afford to lose it. What is in the budget pushes back against the most harmful proposals and buys our communities a very important thing, which is critical time to pursue creative structural solutions to some of the challenges that we will continue to face.

It also acknowledges, with several revenue proposals, that we cannot avoid the great harm to Californians that has been imposed on us by the federal administration by simply cutting our way to it. So I'm thankful that we have begun the work with the revenue generation measures in this agreement, and I look forward to the conversations, through both our legislative process and the next budget cycle, on additional measures to close the gap, particularly in ensuring large employers do their fair share.

Our state is bearing $28 billion annually in costs for working people whose employers don't provide health care.

It's time the legislature had this conversation, and this budget agreement ensures we do so in the forthcoming budget cycles. I want to talk a little bit about health care as assembly health chair. I know that after we went on several roundtable conversations throughout the state of California, that people spoke loud and clear about the harms that they knew that they would be facing under HR 1 and Donald Trump's cuts. He threw our healthcare infrastructure into absolute chaos, and California cannot accept that chaos.

For instance, families in Alameda County are already bracing for the impact: 127,000 people.

Our residents, roughly 7.5% of our county, are projected to lose Medi-Cal coverage by 2028 due to HR 1 and state budget cuts combined. Those are our neighbors in Oakland, Alameda, and Emeryville. Those are our hearts, the people that we care about who depend on Medi-Cal for a doctor's visit, a prescription, prenatal care, and for somebody to take care of them when they need the most help. This budget delivers some relief. I want to note some relief from my perspective for those families.

Communities across the state fought hard to protect as many people as possible from Washington DC's chaos, and this budget reflects that fight, that fight that we will continue. It rejects the immediate $2,000 asset limit. It delays harmful dental cuts and cuts to our clinics. It invests $125 million in county indigent care for uninsured Californians and $250 million to shore up our public hospital system. It delays the imposition of increased Medi-Cal premiums.

It seeks to retain and ensure our undocumented patients stay in managed care for emergency and non emergency services, and it keeps our FQHCs, our community health clinics who serve our immigrant communities in particular, our frontline people, our most vulnerable communities, from being prevented from continuing to do that work. For immigrant families and the advocates who have stood with them for years, this budget delivers $80 million more than the governor proposed for immigration legal services.

This means removal defense, access to counsel for immigrant communities, the right to have a fair day in court in civil proceedings. This is a partial win for the East Bay immigrant community, and it is a win for every family that calls their assembly members, this one included, who showed up to our hearings and refused to be erased.

For communities in crisis, it ensures $125 million will sustain mobile crisis response teams dispatched through our 988 network, teams that show up when people are in their darkest moment and need help the most.

Instead of being held and helped by putting handcuffs on them, they now have the ability to make sure that they have a chance to be stabilized in their behavioral health and mental health. And it seeks to ensure that we stabilize care for our patients who seek gender affirming care, with $25 million of support for our providers to stabilize that community and $10 million to support our LGBTQ centers.

For families who rely on reproductive care, this budget secures a $30 million uncompensated care fund, because the right to make decisions about your own body cannot be contingent on your ability to pay. I want to thank my colleagues, including, of course, chair Dawn Addis, for facing these challenges head on. Despite unprecedented cuts to our health care system, she fought to provide and protect dental coverage, medical coverage for our refugee community, and protection for the LGBTQ community.

And I know it was a challenge. And I want to thank her for supporting asks that meet this moment, including on reproductive health access.

To our sub chairs, Alvarez, Quirk-Silva, and Doctor Jackson, I also want to thank you personally for making sure that we are protecting community school investments and recognizing the critical role that the partnerships that are created through cradle to career work do to ensure positive child outcomes for everyone, and for prioritizing and recognizing the essential nature of our early childcare and education system on the positive development of all of our children.

And for making sure to invest particularly in our community colleges in a time when so many are thinking that college is something that they can't continue to dream about. For our HAPP funding, for securing CalWORKs, SNAP, our basic food assistance, for ensuring that we will change the terrible trajectory that we are on, when, in the fourth largest economy in the world, we could see people dying on the streets from hunger.

I want to thank you for your diligence and your work in that. I also wanted to just speak a little bit to public safety. It's a shared responsibility, and this budget begins to reflect that. Achieving shared community safety requires more than any single system can deliver alone. It's our criminal justice systems, behavioral health, housing, and social services, and they must work together. And this budget takes meaningful steps in that direction.

And I'm glad to see that one of the budget solutions in this agreement includes a prison closure. This is one of the most straightforward fiscal decisions we can make. California's incarcerated population has declined significantly, and responsible stewardship of public resources means our infrastructure should reflect that reality.

Investing those savings into the services that actually break cycles of harm, behavioral health, reentry, workforce development, is exactly what communities have been asking for, and this budget delivers towards that goal.

And I want to thank Assemblymember Hart for having a hearing that helped to kind of put that into context. I also want to thank Assemblymember Ramos in recognizing his incredible leadership for certainly our missing and murdered indigenous women, but also for the women in our prison system and for inviting members of the women's caucus and our working group to sub six to talk about the violence and sexual abuse in our women's prisons.

That urgent discussion, driven by the testimony of incarcerated women and the advocates who stand with them, produced real results. $5.5 million for the Home After Harm program, $20 million for the RIGHT grant to fund community based restorative justice programming in our prisons. These investments don't just help incarcerated people.

They reduce recidivism. They reduce cost, and they make communities safer. And I want to specifically highlight the restoration of funding for the inspector general, an office whose budget was cut by nearly 7% as a budget solution just a couple years ago. This oversight agency of the largest state department operates on less than half of 1% of CDCR's entire budget.

At a time of documented abuses and costly litigation, accountability, as Assemblymember Quirk-Silva said, is both the right thing to do and the fiscally responsible one.

I want to thank the subchair, the budget chair, and the speaker's office for making this a priority. And finally, I want to thank chair Gabriel and all the subchairs who prioritize issues communities across the state care deeply about. Your partnership makes this work possible for the beautiful people of Oakland, Alameda, and Emeryville, and for the Californians everywhere who are counting on this body to hold the line.

And certainly, I want to thank you all for really engaging with me in the many conversations and questions that I approach related to health care, our education system, our public safety, housing, and safety net services. It's a thing to continue to be very persistent.

And I thank you for always being welcoming of my inquiries and for orienting us entirely around solutions that will benefit every Californian.

Thank you, Assemblymember. We appreciate your persistence and engagement across so many areas of the budget, very much so. With that, we will go to Assemblymember Patel.

Thank you, Mr. Chair. And, Mr. Speaker, I know you're listening. Budget sub chairs, of course, and our Senate counterparts. I want to also include staff in my thanks for their hard work through this negotiation process and the two party agreement. We all understand the difficulties of this budget cycle, and yet there is justification to celebrate some important wins in our budget, including being balanced for two years and beginning the process of reducing the structural deficit and meeting this moment with compassion as we try to remain fiscally responsible.

I'm prepared to support AB 109 and many aspects of the two party deal.

And at this time, I would like to highlight a few strong points. This budget includes essential financial supports and strategic shifts to assist counties with the increased workload due to the HR 1 passage, for medical redeterminations as well as CalFresh enrollment. There's additional funding for wildfire mitigation. It's an existential threat for the communities I represent in San Diego and across California, and continuing to invest in wildfire mitigation is critical to save lives and property across our state.

I want to highlight continuing the grant funding for distressed hospitals facing significant financial distress and possible closure, whose financial strain will continue to increase with the likely increased number of uninsured seeking emergency and urgent care due to HR 1.

Highlighting protecting funding for our public institutions of higher learning, the very same institutions that strengthen our economies and produce our next generation of highly skilled workforce, and yet face federal research funding cuts that undermine California's ability to lead across so many sectors of innovation, and who work to address pressing issues facing humanity and also provide substantial revenues as return on investment to California. There is a significant investment for increased funding to support our students with disabilities and special education, and I want to highlight that.

That is an area of focus for me as an assembly member and as chair of the Assembly Education Committee, and I want to praise the investments towards those programs. This increased funding is absolutely essential as we continue to move towards least restrictive environment in teacher workforce shortages, as our teachers do experience burnout and challenges living and meeting the needs of high cost communities.

The budget does present a thoughtful approach to helping working families, and I want to highlight some aspects that are intersectional in this area. We're increasing childcare slots, rebenching Prop 98 to include early childhood education, maternity leave for teachers, and putting forth a framework to transition more seniors to home and community based services while simultaneously rejecting reductions to in home supportive care services. Those things need to go together to make sure that they're functional. I want to also highlight a couple areas of continued concern.

One, as chair of the Assembly Education Committee, the underfunding of Prop 98.

I remain hopeful that conversations with the governor will continue towards fully funding Prop 98. I want to just leave it at that and hope that negotiations continue in that direction. Additionally, having spent years in biotech research myself and as a member of the select committee on biotechnology and medical technology, I know firsthand how sensitive R&D investment decisions are to incentive structures within the state of California.

And I worry that cuts could tip the scales towards other states instead of providing long term returns on investment and steady, high paying jobs that provide significant return on investment to the state of California. I want to thank our community members who have reached out to our office and our advocates for continuing dialogue with us as we make our considerations on many aspects of the budget and the two party deal. I look forward to the governor's response, and that concludes my remarks.

Thank you very much, Assemblymember. We really appreciate your contributions. With that, we will go to Assemblymember Sharp-Collins.

Alright. I wanna take I would like to take a moment to, appreciate the incredible work of our budget chair and our sub chairs and budget staff for guiding us through this this difficult budget process. This was a complicated budget year that forced hard choices in order to protect critical life saving programs.

And having been new to serving on budgets up to with doctor Jackson, I just wanted to highlight him and let him know that you are truly a phenomenal chair in the way you handle that that committee. You know?

That is a tough committee. Also, as cochair of the select committee on on CalFresh enrollment and also the nutrition. I would like to also thank my co chair, Assemblymember Bonta, for all of her, hard work as well as we did everything we could to continue to advocate for for CalFresh. And so with that, I want to applaud our collective efforts to fight for CalFresh programs, The 30,000,000 plus additional 215,000,000 in the multiyear spending to support our county eligibility work will literally truly save lives.

With average benefits equaling $6 a day, the over 700,000 vulnerable Californians who stand to be kicked off the program are not prepared to withstand these these changes. We desperately needed resources to support county employees who now will have, to spend more time helping their recipients maintain their eligibility. So we are seeing reports from other states that when people are kicked off with social safety net programs for eligibility, there are a large number of eligible people that are also kicked off the program. So it is it is truly essential that we provide resources to county workers to support putting eligible people back on the program as well.

We desperately needed resources to support county employees who now will have, to spend more time helping their recipients maintain their eligibility. So we are seeing reports from other states that when people are kicked off with social safety net programs for eligibility, there are a large number of eligible people that are also kicked off the program. So it is it is truly essential that we provide resources to county workers to support putting eligible people back on the program as well.

Additionally, I was proud to fight for a a rejection of IHSS cuts to to actually protect seniors, to protect our children and people with disabilities. And without these rejections, we would be robbing these individuals of of the dignity of receiving care in their own homes.

So I'm just excited to see that our budget is still moving forward with those rejections. Additionally, we will be pushing people in vulnerable economic situations to nursing facilities that cost three times as much, as it is, you know, to care for someone at home. So, again, I want to thank our budget chair, our subcommittee chair, and also my colleagues.

And finally, there was one thing that I do have to speak about that is a painful point for me as I think about my district and, go back to reflect on the different calls and emails and meetings that have happened just in in the last couple of days. I have heard from many constituents and advocates in health care systems that are extremely concerned about the proposed MCO tax.

We have it inside our budget here, and I understand that the existing tax does not comply with federal guidelines and that we need to make a change. But this will have some serious some very serious impacts to my district. One of my plans within my district, for example, told me that their tax contribution will go up from just over $1,000,000 to more than 15,000,000 annually.

So that cost will have to get passed along somewhere, meaning more cost to businesses that will either hire fewer people, scale or scale back coverage leading to more costly insurance for employees, or worse, meaning people are being laid off. So it also means increased cost for individuals at a time where we have promised to focus on affordability.

So I understand that we are we are here now and that something had to change, but I just wanted to make make it clear that this portion of the budget deal is, an actual real problem for my district and can be really dangerous for people as we continue, you know, to move forward.

I mean, I want us to remember that we are here and we were sitting here to fight to fight for and also to protect various people, and we need to continue to do that work. But I'm I know that it's here in the budget. I know why we're here. I know how it got there, but I will hope that we continue to have ongoing conversations as it pertains to the MCO tax moving forward.

But but, otherwise, thank you guys for guiding us through this work. I'm happy to see some things pertaining to some some other areas that San Diego can count on and pull from for budget concerns, but not only well, not budget concerns, but being able to address our, our flooding issues that happened down in San Diego, but also being able to help address more emergency services for our local fire departments, especially those that are listed in our unincorporated areas.

So I'm glad to see that there is some additional support to help all of our fire departments, but also San Diego can get some help for the stormwater infrastructure based on the way I've been able to articulate the budget. But thank you guys so much.

Thank you very much, Assemblymember. Appreciate those comments. Let's go now to Assemblymember Wilson.

Thank you, mister chair. I just wanna also extend my appreciation to your hard work as well as your team, and everyone that was involved in, capturing crafting this budget. I know that it is difficult and challenging, especially with limited resources and and quite a bit of priorities that you you've heard already from my colleagues. I do wanna give, a special shout out to Assemblymember Jackson and Assemblymember Addis, or I should say Chair Jackson and Chair Addis. They have the most, I think, critical parts of this budget as it relates to human beings.

They have the most, I think, critical parts of this budget as it relates to human beings.

And, it is hard, work when you know the decisions that you make have a significant and outsized impact on someone's ability, to survive, let alone thrive in our state. And of course, I have to give a shout out to my own chair, Chair Bennett, as we, grappled with good work as it related to climate, energy, and transportation and had a chance to weigh in on those. I just, I'll keep my comments brief.

I'd like to, highlight, some comments from my colleague from San Diego and echo those sentiments, especially as it relates to, local news and journalism. You know, we know that they play a key role in our communities, in particular, ethnic media.

That is a a a a key communication tool for our underserved communities. And when you consider the headlines of late, whether it be wildfires, attacks on immigrant communities, public health emergencies, and federal cuts, to health care system, the losses that we've seen in journalism jobs as well as newsrooms closure is are particularly pronounced. And so, we should continue to examine how our state, can help support our local journalism.

We have the $10,000,000 investment in our civic media programs, but I hope that as we continue, on this budget that we'll make opportunity for programs such as our local news fellowship and Propel. As chair of, oh, sorry.

Another comment that my colleague made, from San Diego was about our r and d tax and our our business credits. And and here's the deal, innovation is what carries California. It is what spurs us what makes us California uniquely apart from other states. And I think that that credit plays a role into that. And so I hope that that's something as we work towards a three party deal would be considered.

Last but not least, as my role as chair, there were a a couple of things that stood out to me in this budget. I've had a chance to weigh in, during committee, but I'll bring up two that, was highlighted post having a chance to weigh in, on committee. So this our budget includes language that imposes additional limits related to automation on programs like the port and freight infrastructure program.

Now we have agreed language within, each of the allocation of those types of programs, but here's the deal. It is a blanket prohibition, and it doesn't allow for us to make adjustments based on the specific program.

So I think that is something that we should be looking at and and considering because, like I said, it is a blanket prohibition to use those resources. And then last but not least is, you know, we've had these recent changes as it relates to GGRF. We know that it is a continuing discussion. It's it says it in our floor report. It's we've talked about it quite a bit.

But I do think as we consider working towards, this three party deal is is the impact that this has on transit, the way those the regulations, the way they changed and those operations. And they've been facing fiscal cliffs, and we've talked about that a number of times. And we weren't when we were factoring those fiscal cliffs, we weren't considering the impact of the of the recent language.

And so we I think we should be doing something as it relates to that in our in our regular, general funder from somewhere, if we're not going to make changes to GGRF. And also noting that our these these types of transit agencies are impacted by our ZEV requirements.

That five that private fleets, because of things that we've done, whether it was pulling waivers or additional language, they have been relieved from. So I think that if we're not going to, make any changes related to GGRF, we need to consider the impact that our own regulations are having on our public fleets in comparison to our private fleets.

But I just wanna, echo those as as chair transportation echo my the comments from, my colleague from San Diego and note that, I know there's still more work to be done. I appreciate every single person that has been involved in crafting this budget and getting to this place, especially LAO for your work. You you help us, you guide us, and you give great information not only for us, but for members of the public. Thank you so much, mister chair.

Thank you so much, mister chair.

Thank you very much, Assembly member. Appreciate it. Let's now go to Assembly member Solache.

Thank you, mister chair. Before I begin, I wanna just really thank all the amazing staff that are under under this department, finance department. As As a former local mayor and council member, I know the important work that our staff does and our team. So I just wanna thank everyone who is part of this process.

Of course, it's under the leadership of our speaker and our budget chair, who I've seen him, you know, Kinda a little older per per not per per month, but per day based on all his amazing work he's doing.

And, of course, all our chairs who do good work, especially my chair, our number one chair or sub one chair, sorry, Addis, for her amazing work and the work that she does to really protect our communities. And while this budget isn't perfect and much work lies ahead of us, this budget is a protect sorry. This budget that does protect and delays some of the most devastating cuts to health care and other essential safety net programs. I represent eight communities in Southeast Los Angeles.

Communities like many of these, the state of California, are under attack by the Federal Government's life threatening cuts.

Our assembly budget one has taken steps to stabilize Medi Cal and protect health care for most vulnerable populations, including the health services for undocumented communities and seniors. PACE programs provide critical health and social services for seniors, allowing them to continue living vibrant lives with dignity and their own communities. Thanks to our continued advocacy and budget protects, pays rates, and funds additional capacity to protect applicants. We're still facing a lot of hurt and choices investments found in this budget that reflect our values.

But I'm very proud that we were able to reject the IHSS cuts, protect immigrant communities, support victims of crimes, expand childcare, and invest in education.

As we finalize the remaining budget details, we must do whatever we can to continue advocating for services that will improve lives.

I remain committed to being a voice for not only my district, but for the state and ensuring that I echo, our education chair's comments on prop 98 and ensuring that as our teachers and folks that work in our classrooms are feeling supported by addressing and continue addressing as much as I do appreciate the work that we've been doing, I I wanna know that we will be doing more, and I wanna echo again our chairs, words on those.

For someone that, believes and truly, admires the work that higher education provides to the state of California, I remain committed to doing work in that space as well. I see in the room childcare providers. They are heroes in our own communities, in our backyards.

I wanna ensure they know that we see them, and we're gonna continue being advocates, for them as they do the hard work for our our next generation, which is our our children. More work needs to be done on GGRF for AB 617 communities who all might distribute represent for community air protection programs.

And finally, this is an area that I definitely am gonna be very mindful as we continue looking at budgets and and legislation of of how we address our in house communities, especially in small cities. You see, in LA County, there's 88 cities. Of those 88 cities, I represent seven of those eight communities, and they're all small cities.

This unhoused community issue is not just big cities of LA or big cities in in our county. It really, really have to do with our small cities. And I get too from your experience. In the city of Belfaire where I was born, we have put dollars in our mouth where we actually have a shelter. We are to are are are dealing with these issues, but we have to address this from a budget angle so small cities feel supported.

I know our chair in that committee has been really and Aye, you know, has been able to listen to those concerns. And I look forward to being in in that space too because, you know, small cities I'm sorry. Big cities are important and they're critical to this solution, but small cities cannot be forgotten because they also have the responsibility and the and the and and they're doing the work. So we as a state need to do more to support them.

So with that, thank you, mister chair, for your awesome work and for everything you do.

Thank you.

Thank you, very much, mister Solace. I appreciate it. Now turn it over to our vice chair.

Thank you.

Despite this progress, the underlying budget condition is not sound. First, the existence of any operating deficits during a revenue boom of this magnitude is itself a warning sign. Further, given the state's diminished reserves and an already accumulated wall of debt, California is ill prepared for even a slip up in revenues. Stock market runs like the one that we have seen in the last three years almost always ends in a dramatic reversal.

Many revenues would decline significantly, Even just a repeat of the 2022 market declines, which were mild by historical standards, could quickly push the budget into deep deficits.

Specifically, income tax revenues across 2022, 2023, and 2023, 2024 fell 65,000,000,000 below twenty twenty two, twenty twenty three budget act estimates. Alarmingly, given current market conditions, the .com bust probably is better paralleled. If such scenario were to repeat, the revenue hole would be a $100,000,000,000. Using this year's budget to build resilience would allow the state to weather this kind of shock without immediate need without immediately needing to turn the tax hikes or cuts to ongoing services. Now, I share that because that is not my opinion.

That, it was was written by the LAO. And as we just shared a thank you to the LAO and to a lot of the staff here, they are warning us that we are not prepared for a lot of these issues. I wanted to make sure that I was asking the Department of Finance their opinion. With the proposed budget, is it accurate to say that this would be the largest state budget in California's history?

I believe that is correct, not looking at the data, but we have in front of me. Sorry. But, yes, this about 350,000,000,000 total, of which about 230,000,000,000 is general fund.

So record budget?

I believe so.

Would it also be accurate to say that we have record revenues right now in the state of California?

I don't believe that is the case. I believe if you were looking as a percent of the total, you would look back to the 2122 time frame in regards to percent change over time.

Why are you looking at are you including American Rescue Plan funds in that as part of the estimates?

I am looking at the the general fund coming into the to the state.

But earlier this year, when I asked that this was record revenues in January, the answer was yes. And so I would assume that with more revenues now, the answer again would be yes.

I will turn to my colleague who has more of that detail. Thank you.

Department of finance, one one moment.

Yeah. I don't I don't have the historical 2122. I think we are approaching, those levels. I mean, it's important to understand revenues do do grow over time, You know, with the economy, grows over time. So you would expect revenues over time to to be larger over over the long run run.

Well, yes. Thank you. I appreciate that. And and it's as I've read the LAO's report, you know, the the part that I'm really just trying to reflect is that right now in the state of California, we do have a record budget. There's never been more money available to the state of California before.

We also have record revenues, and yet the proposal in front of us today has multiple tax increases. We are multi like, there is a new software tax increase. There's a new MCO tax increase. And the concern for me is if we're in a record position and we're adding more tax increases and we're pillaging the the rainy day fund, is that not indicative of a larger warning that we have a spending issue here in the state of California than it comes to anything else?

Yes. So as was noted at the governor's budget January as well as last year's budget act, we were seeing both the administration as well as legislative analyst was seeing that our costs for our baseline programs were increasing. So on the expenditure side, the investments that we had been making that we had, projected to make, those costs were coming in higher. And so if you're looking at a budget, you have to look at both the expenditure side as well as the revenue side.

While the revenues are increasing and you're seeing a lot of the the volatility of the of California's progressive tax system, the the the those that are in the top 1% are doing well, and we're we're having an influx of revenue as you've as you've noted.

And yet, we still have a deficit. I think that's your point is to say that despite the record revenue, we continue to have to deal with solutions, meaning we we're gonna have some reductions. And in this year, for the first time, the governor proposed having a balanced set of solutions, which would include the three tax proposals that were mentioned beforehand. So to address some of the structural deficit, the increased on the expenditure side, we were looking at both reductions.

Like, last year, we had 12,000,000,000 in ongoing reductions that were part of the 2025 budget act.

We also noted structural imbalances in the out years that we the administration, made a point to try to address as well. At the mayor vision, I noted, that the the legislature's plan also attempts to do that by having the out year deficits that were over 20,000,000,000 at the governor's budget are now, around 10,000,000,000.

So we're slowly taking, the steps that we need, both the administration as well as this two party plan, to make adjustments for not just the next year or two years, but into the out years as well. So I think it's important to just to note that and to be able to address near term as well as long term problems.

So so with that, what would be the governor's projections when it comes to the increase in stock market for that night? I share that mainly because the LEO is talking about a correction in the stock market. If we see a correction there, how well prepared is the budget, to handle a 10% reduction in the market?

So I I think we've noted that, in in our forecast, we don't we don't forecast, a recession. We don't forecast when the stock market is gonna hit. These are risks that we have on the horizon that we note if something of that magnitude should occur, then we will need to revisit the budget because we will have dozens of billions of dollars that we will have to correct for. And I think the the legislative analyst office has also made that point.

Gabe Patek, legislative analyst office. And I would just weigh in here and just say, look. Our office has made it clear over the last several months. We think the market is at levels that, historically speaking, put it at risk of having this type of correction that you're referring to. And so that could happen, you know, this month or in several years.

That's the issue. We don't know the specific timing of it. And, you know, we've looked at other historical periods when when experts thought the market was at peak values and it would go on to, you know, continue to increase for several years. So that could happen here. The revenue trends have been very strong in recent last couple of years and this year.

We have advised over the the the budget period that we think this is a time when we could be building budget resilience. But, you know, look, at the same time, we we commended the administration's budget proposal for, shrinking the structural deficit. It was estimated at around 20,000,000,000 after the May revision and after January and May. The estimate was revised down to 10,000,000,000. So that's very significant progress.

It's in line with actually the recommendation we made that we should try to have that the size of that structural deficit. The issue is shrinking that structural deficit, it it it requires these very, very difficult decisions that that that the subcommittees are talking about and, that have these human effects that that the chair referred to.

And, it's it's the combination of two sides of the coin, right, making these very difficult, choices on the policy side or the program side, but then also, making some select revenue increases to bring the and bringing the two together, permanent revenue increases in this case as well. So bringing the two together is what helps us shrink that deficit.

But, I mean, fundamentally, with our current revenue level that we have, our office has indicated that, you know, based on our best, analysis, the overall suite of commitments that the state has in place, you know, is not is not sustainable.

It's it's the the the cost of those over time would cost more than than our sustainable level of revenues. And so it just puts a very difficult set of decisions before the legislature. And, you know, so that's our analysis, but, of course, the the the ultimate choice here is up to the policymakers. And so

Well, and and I share I appreciate you sharing that. And and the main reason why I read the report is because it's just filled with data. And it's if we're in a record revenue year and a record budget year and we're already talking about structural deficits as your report warns, that is indicative of a major problem.

And if and when a correction in the market happens with the way that we've built our revenue system here in California with boom or bust budgeting, there will be a day where having the hard conversation, doing the hard things will not be a choice for us. It will be something that we must do.

And so in this budget and for the Department of Finance, in just a very clear way, Does this budget increase the cost of private insurance policies for all Californians with the new tax?

I believe you're speaking about the managed care organization tax. I I would say that because of the changes at the federal level, states are constrained in this in in how the the use of the MCO, as they call it, and that there will be, again, because of the changes at the federal level, commercial plans need to be taxed at the same rate as Medi Cal provider plans. And so that is something that is part of the new MCO proposal.

How providers pass on those rates, I think, is not up to us. That is something that is, up to them and how they would plan to either absorb those costs or pass it on.

So I would not say universally that that is the case, but I will turn to my colleague for details.

Aaron Edwards, Department of Finance. I think my colleague actually already covered the issue, but happy to answer any additional questions you may have.

You know, when I look at this again, I mean, it is just very indicative that we are proposing new taxes with record revenues. I mean, that has to be a theme that people are seeing right now as an issue. You know, and this budget is supposed to reflect our values. Raising the cost of living for Californians should not be one of those values, especially at a time when the state is experiencing those record revenues.

In reviewing the budget, I also see funding for attorneys for undocumented immigrants in civil cases.

Is that correct?

Mister Sisseton, do you wanna speak

to that? Correct.

how proud we are of that? There are

There

increases of, funding, for for legal aid assistance, I believe, as miss Bonta and others pointed out.

When I bring that up because right now, we are about to pay the lawyer cost for illegal immigrants, while raising taxes for Californians, while raising taxes on businesses, while refusing to pay the the unemployment insurance where businesses are about to get an additional employee payroll tax. And when we're complaining about not having enough money, I think that's wrong. I think that's wrong. Wrong because of people of California. If you are a citizen and a taxpayer and you work, your taxes are going up.

But if you have broken the laws in the state of California, you get benefits. You get legal protection services. So what I would ask is this, is there anywhere in the budget right now that pays for the civil attorney fees for the California citizens?

Actually, legal aid funding, in parts of the budget are available for for, for citizens, who who are in need. For example, low income citizens dealing with eviction defense and and other matters. So there are there are there is funding in the budget, for legal aid for those individuals in certain cases.

Do you

know how much?

It's more than in the governor's proposal because the legislative budget plan augments, that investment.

You know, I think this is something, again, that the people of California are asking for help. Asking for help. And when they see a record budget, record revenue, and complaints that the state doesn't have enough money, I would tell them right now that the state does. The state's just not prioritizing them. So thank you for your reports.

Thank you for all that you do, and we look forward, to hearing more from you.

Thank you very much, sir. I'm gonna take a little bit of my prerogative to maybe enrich the, the conversation on a number of these topics. I guess I'll just start with the last item that the vice chair raised about civil legal assistance, which I think enjoys a proud tradition. As I recall, it was a program that was actually signed into law, the sergeant Sergeant Shriver Civil Counsel Act under governor Schwarzenegger.

So it has been a joint effort of Democrats and Republicans to provide that civil legal assistance, understanding that there are tremendous benefits to the people of the state of California from providing that.

On the MCO tax, I just wanna point out that that's not a new tax, that that is an existing tax that we are making changes to because they're required at the federal level. And what is actually gonna drive up the health care costs of Californians is what is happening in Washington, DC.

And, actually, the legislative budget provides $300,000,000 in premium support to help people pay for covered California because of reductions at the federal level, because they are making health care more expensive, because they're taking health care away from people, and our legislative budget is trying to do exactly the opposite to make sure that people have care and to make sure that it's more affordable.

And you can look at the investments that we are making in this budget, including including and especially those covered California premium supports that speak directly to that issue. Finally, I do want to, applaud you for reading the paragraph from the report that the LAO put forward.

I agree that it was a very important warning that we received from the legislative analyst office. I actually took that report and sent it to every member of the Assembly Democratic Caucus because I think it was an appropriate note of caution that the legislative analyst office sent to us.

I also sent a letter to every member of the assembly, both Democrat and Republican, talking about the fact that we were in a moment where we needed to make tough choices and that there are many proposals, budget investments that were put forward by stakeholders. I took dozens of meetings with Democrats and Republicans who are asking for additional funding for programs and services and said, respectfully, this is a year where the LAO is telling us that we need to make tough choices.

And the proposal that you see before us today, I would argue, really follows what we heard from the LAO, that it needed to be a balanced set of solutions, that we were gonna have to make tough choices to address the structural deficit, understood that there are a lot of folks in politics who would have preferred to kick the can down the road to not make those tough policy choices, but we actually followed the lead here of the governor, and made those tough choices.

And that was done by our sub chairs who rolled up their sleeves, dug in, tightened the belt where it was necessary, said no to people even when it was uncomfortable to do to do so. And because of that, we are on the road, as the Department of Finance mentioned, to more than half cut in more than half our structural deficit.

So we are making tremendous progress towards the things that we need to make progress on even at a moment when our state is fundamentally under attack from the Federal Government. So I think that's something that all of us should feel very proud of. We have not ducked the responsibility of making those tough choices.

We're doing that. And at the same time, we're making those tough choices now. We have committed ourselves with our Senate partners and with the administration to go back to the voters to make fundamental reforms to our rainy day fund to put us on even stronger, path to fiscal resiliency.

So, at a moment when there's a ton of uncertainty, when we are facing unprecedented attacks from the federal level, I think we should be very proud of the fact that we have rolled up our sleeves, done the work, made the tough choices, and are putting the state on a path to much greater fiscal stability. So I just wanted to add that to enrich the conversation because I think it's important for people in this room and people watching at home to understand that context.

With that, I'm gonna go to missus Colosa and then Assemblymember Schultz.

Thank you so much, chair. Thank you for your tremendous leadership. Thank you to our speaker, our budget sub chairs, all of our staff consultants, and, of course, thank you to our advocates and members of the public who were with us, every step of the way at all these budget hearings. It's my first year serving on budget sub five, which is led by Assemblymember Quirk Silva. And, you know, today's agreement really reflects the values that I know so many of us hold dear.

As we heard from our budget chair, those values are tested on a daily basis, sometimes hourly basis. And so much of what we are responding to is really a response from what Washington has been doing, what the Trump administration has been doing, devastating impacts of HR 1, the ongoing federal funding reductions, and it's really the assembly, the state legislature, everyone here, and thanks to the help of the LAO and Department of Finance, who's really taking responsibility, and taking action to protect our most vulnerable.

As we heard from my colleagues already, HR 1 shifts billions of dollars of costs, onto states and local governments. It's threatening health care access, safety net programs, and services that million millions of Californians depend on. And rather than turning our backs on our constituents, on working families, on seniors, on children, immigrants, immigrants, our vulnerable communities.

This is a budget that is working really hard to lessen a lot of those impacts that we know are gonna hurt people.

And, for me, some of the things that, I was really, proud to see, and many of them, my colleagues did a really wonderful job of highlighting already, but I I would be remiss if I didn't also highlight them was the HAPP dollars of 900,000,000, the Stop the Hate funding for 30,000,000, which is an API Caucus priority, rejecting the IHSS cuts, the expansion of the childcare slots, rejecting the Medi Cal asset limit cuts, supporting our food banks, rejecting the elimination of the Medi Cal adult acupuncture benefit, increase in the MMIP grants, and also as chair of the Asia California Trade and Investment Select Committee was also really heartened to see the Cal Competes tax credit extension.

And so, I look forward to the ongoing nega negotiations, from, the assembly, the Senate, and, of course, the governor's office, and thank again, our our budget chair for for his leadership on this.

And so in closing, just wanna say that we can't replace every dollar that the Federal Government has taken from us, but we know that as leaders on the federal side choose to disinvest in California, we are working really hard to do the opposite, to make sure that we keep our working families and and just everyday people as whole as possible.

So thanks everyone for all the staff for for all of your hard work. Thank you.

Thank you very much, Assemblymember. Appreciate it. We will now go to the pride of Burbank. Assemblymember Schultz.

Well, thank you, mister chair. So much I wanna say. But I I just wanna begin by saying, while I have profound respect and admiration from the member from Linwood, I have to wholeheartedly disagree with them today. I think you, mister chair, look youthful and vibrant and as ever as the day you arrive, sir.

Now to a serious matter, I I do have a question for the Department of Finance, and I'm gonna, of course, talk about public safety building on the comments from our vice chair and our member from Oakland.

Before I do, I just really wanna say a profound thank you to sub six chair Ramos and our talented staff, including Bernie and Jennifer LAO. We tackled a lot of really significant issues this year from sexual abuse in our facilities, to mental health investments in prison, to the missing and murdered indigenous people's crisis. And so I just wanna thank you all. It was really an honor to work with you on that. So here's my question for the Department of Finance.

I believe I could be mistaken, but in reviewing the budget, I believe that sub six has the only department in the state of California that's receiving nearly $1,000,000,000 in new funding in this fiscal climate, all while serving fewer people. The department in question that I'm referring to is the Department of Corrections and Rehabilitation.

I'd like to hear from the Department of Finance as to whether they potentially support the savings proposals that are baked into this two party agreement, this proposed budget, and specifically the additional provision closure and the additional unallocated reduction to CDCR.

In regards to the unallocated production, I think that's always tricky to have unallocated reductions to departments. And, in particular, we've been working with CDCR alongside a third party consultant to look for opportunities to streamline programs and reduce costs. That's reflected in the mayor vision with hundreds of million dollars hundreds of millions of dollars in savings over the, multiyear. This would be in addition to that, and so I think we, we would wanna consider further discussions, with legislature on that point.

And at this point, we we would continue to also have discussions on another prison closure and what those impacts could mean.

I will turn to my colleague to see if he has anything else to add.

Anthony Frenz with Department of Finance. In addition to, what, Deputy Director Lee mentioned, I would just note that the, billion dollar figure you're referring to, I think, needs a little bit more context, for the committee and both for the public. Of that amount excuse me, it's about, I think, 882,000,000 that's been added to CDCR both in the governor's budget and mayor vision combined. Of that amount, about 660,000,000 alone is just for employee compensation. So a vast majority of that figure is outside of CDCR's control.

There's been additional investments, a $100,000,000 for workers' compensation costs, about $91,000,000 for lump sum payments. So again, another big chunk is for, what I would describe as baseline ongoing cost pressures that are largely outside of the department's control. There are things they can do to mitigate those costs, but they are true cost pressures. Beyond that, there's $23,000,000, I think, for ADA improvements, 15,000,000 for fire watch. So again, kind of within the fire life safety realm.

So I would say there aren't a lot of new policy proposals for CDCR in this budget. So I just wanted to add some context there about the costs that are included, in this budget for CDCR.

I I I appreciate it. And I'm I'm not gonna pose another question. I'll just conclude with a couple observations. I think there are some wonderful things contemplated in this budget and including the governor's May revise, but it's not lost upon me that at a at a time when we're talking about service reductions and cutting back, we have a department with almost a billion dollars in new spending, both general fund and other allocations.

So it is something that's on my mind, and I would strongly encourage the administration to consider some of the things that are baked into this two party agreement.

And now I'd like to elaborate. Last year, the legislature approved a $20,000,000 contract with a private entity to help us identify cost savings measures with CDCR. We were promised, and I repeat, we were promised more than 600,000,000 in savings. And just last month, we were informed that that will be closer to $100,000,000.

The point I'm making is that I do not have any degree of confidence that the department can achieve that cost savings without additional guidance and direction from the legislature, which is why I'm making this point today.

I am incredibly proud of the efficiencies that this committee and our staff have identified to counter what I would describe as exponential growth at the Department of Corrections and Rehabilitation, a system that I would add that is serving for fewer people in prison this year and the next year and the year after that as fully outlined in the floor analysis and committee report.

All against, by the way, the backdrop of a Federal Government, as my colleagues have correctly noted today, who's actively taking away health care from sick people and food from hungry people and financial aid from students. And so my point is, I echo many of the comments made by my colleagues. A budget is a reflection of values. And in a different environment where we didn't have to make these tough choices, I think there are some wonderful things that we can invest in at CDCR.

But it is all a matter of trade offs right now, and I want every dollar going into treatment and prevention of violence in our communities as opposed to dealing with it after the fact. I would also note on the issue of a prison closure that even an additional institutional closure would leave the system with thousands of empty prison beds, equivalent of three to four facilities according to some estimates.

And considering that the entire institutional structure has nearly $90,000,000,000 in capital needs for the department in the for foreseeable future, I would encourage the administration to act urgently urgently in exploring and reducing and consolidating a system that is not gonna be able to write itself in this economic climate. In my view, and speaking only for myself, an empty prison bed is not the best way to maximize public safety in our communities.

I believe those dollars are better spent investing in people, housing assistance, food security, job placement, access to health care, the things that prevent crime from happening in the first place.

And when we're talking about these really tough choices, I strongly encourage and ask the administration to seriously look at what both houses of the legislature are suggesting, another institutional closure which has been done in recent years.

I will just close noting that I believe the legislature's proposed budget provides a reasonable path to achieving savings, And I sincerely hope to continue conversations through the chair, through our leadership, with the administration so that we can all live up to a commitment that I've heard expressed many times to right size our penal system. Thank you.

Thank you very much, Assemblymember. I now want to go to, Assemblymember Petrie Norris.

Thank you, mister chair. And I too wanna begin by thanking our budget chair, our budget sub chairs, and all this of the staff for their work on this budget. I think that we all recognize that we are grappling with some very tough challenges. As the chair acknowledged, We were in a position of making some very tough choices. But I do wanna echo the concerns that have been raised by some other members of the committee related to some of the revenue generating proposals, before us today.

And I have particular concern regarding the permanent cap on business tax incentives, particularly, around the research and development tax incentive, which is something I have been talking about on this dais for a very long time. And I think that we've recognized California's fiscal challenges are very real, but I think it's also important for us not to confuse confuse short term revenue generation with sound long term economic policy. California's innovation economy is literally the envy of the world.

Our innovation economy is the reason that California is the world's fourth largest economy. Our innovation economy is also the reason that our recent revenue growth has been so very strong.

So I continue to be concerned that proposals that would stifle investments in California's innovation economy put us in a situation where we are where we are, like, killing the goose who's laying all of these golden eggs for California. So Aye, think that weakening these incentives for investment, while they may generate increases in revenue in the short term, risks slowing the economic growth that is supporting California's economy and, supporting economic growth in the future.

So I would hope that as these conversations continue, as we work to structure A, 3 party agreement with the governor, that we're able to, evaluate alternatives that, achieve our fiscal objectives in the short term, while preserving the foundation of California's economic growth in the long term. So with that, thank you, mister chair.

Thank you very much, Assemblymember. Let's go to, Assemblymember Rogers and then Assemblymember Fong.

Thank you so much, mister chair. First of all, I just wanna thank, all of you for doing the the hard work and and for everybody who participated in our subcommittee, hearings. A lot's already been said by my colleagues. I think one of the things that we really struggle with is a difference in priorities and difference in values with the federal administration, and I think that that's really shaped the discussions that we've had.

It should not be lost on Californians that members of Congress chose one of the largest tax breaks in the history of this country for the ultra wealthy in exchange for kicking close to tens of millions or 10,000,000 people off of their health care.

That was a policy choice. That policy choice. That was a values choice. And there are things that are in our budget that are reactive to that. Not every choice was a good one, that we had to make, but we're making the tough decisions and looking at how we can, in the long run, try to help protect Californians.

And I wanna thank you all for approaching it with those values, here today. I I also wanted to do a special thank you, to Assemblymember Jackson. One of the things that's been really important in my district in the last year and a half are the discussions around the inequitable treatment of of foster youth, from our tribal system, our tribal, governance governments in, the North Coast.

For context, in Humboldt County in particular, you have less than 2% of the population comes from tribes, but 40% of the foster care system are youth that come from tribes. There's a huge disproportionate impact that happens.

And even in a bad budget year, Assemblymember Jackson made sure that this was a priority of his to get this across the finish line and get funding in this budget to start to address that disparity. And I wanted to to call it out as, something that my district in particular is going to appreciate and benefit from. A lot more to be said. I know a lot's been said already, and we're gonna be discussing this again later tonight.

But just wanna say thank you so much to all of the folks who've worked so hard to deliver the budget here on time for us.

Thank you.

Thank you very much, Assemblymember. Now let's go to Assemblymember Fung.

Thank you so much, Chair Gabriel, and thank you so much to the entire budget committee staff, to all my colleagues, and to Chair Alvarez as well, and to all my colleagues on Budget Sub three. And thank you to the speaker and anyone for this agreement here.

As we continue to look at how we continue to fully fund higher education and our University of California system and our CSU system, that's something we're gonna continue to to advocate for here in our state And with our community colleges, great to see the growth funding around the cola and growth opportunities there, the 2.5% on top of the 1% from the prior year. Also, very grateful to see the funding for our Dreamer Resource Centers, $15,000,000 ongoing. Also, one time allocation for Prop 98.

When I was a community college trustee at the LA Community College District, it was a legislature that really helped push an initial seed funding of $10,000,000 for our Dreamer resource centers across our community colleges in Los Angeles. And we know that it's a even more challenging time now for our diverse immigrant communities. Same thing we can do to continue to amplify that going forward will be critical. And I'm grateful to see the financial aid opportunities as well.

The increased age limit for the Cal Grant eligibility for our community college students increased from 28 years of age to 30 years of age.

That's gonna be a great opportunity for a lot of our community college transfers. As we continue the North Star of Cal Grant equity reform, we know the framework was passed in the 2022 as we continue to know those opportunities to expand financial opportunities. And also as we look at expanding dual enrollment opportunities as well, going forward, that's been a growth area of our community colleges. So grateful to see that work in that space as well.

So really, thank you so much again to our chair, to the speaker, to chair Alvarez, and chair Gabriel, and to everybody involved.

Also on as chair of the APL Legislative Caucus, really grateful and I said, and I appreciate it, chair Jackson for his work and efforts around information hearing around the Stop the Hate program and funding there. I'm grateful to see that funding there in place with the two party agreement. And also to chair Don Addis for the working efforts on the medical optional benefit there as well as we're that was another caucus priority.

But it was a go forward as a state win over and challenging bunch of times, but really grateful to everybody here for their hard work and efforts on this agreement, and we can as we continue to expand opportunities in higher education for our students throughout the state of California. Thank you so much, Chair Gabriel.

Thank you very much, Assemblymember. With that, I believe we have exhausted, unless any last folks. Alright. I believe we have exhausted questions and comments from members, which means that we can turn ourselves over to public comment. I wanna thank all of the members on both sides of the aisle for their, thoughtful comments and questions.

I also wanna thank again, thank our staff, both Republican and Democratic staff, with a special acknowledgment to Christian Griffith, the chief consultant for our Assembly Budget Subcommittee and all of our very talented, Assembly Budget Committee staff. And with that, I will invite folks to come forward and offer public comment.

And if we could, recognizing that there is a very long line and understanding that people are really passionate about the issues and that we are very grateful for all of you who have come forward to provide public comment. And it is important, and I do wanna lift up what what chair Addis said that your your comments are really important and have helped shape this budget process out of respect for those in line behind you who have traveled great distances to Sacramento.

I would ask that you, keep your comments brief to, your name, the organization, and the issue on which you wish to speak.

So thank you.

Christine Smith, Health Access California. We appreciate the work done on this budget and are supportive of it overall, and appreciate the delaying of the of the worst of the cuts for California's immigrants. Also super appreciate the inclusion of revenue in the budget trailer bills.

Thank you.

Ken Hartman, executive director of transformative programming works. I just wanna thank the committee chair and subcommittee chair, mister Ramos, and of course, miss Bonta for championing the right grant again this year. And mister doctor Jackson, you inspired me a quote that I know when I was listening to you, which is societies are also judged by how they treat people in prison. So thank you.

Hi. Doctor Tetyar. I'm the CEO of Cardea Health. We're a nonprofit that provides clinical services to people experiencing homelessness. I'd like to thank the members of this committee for your thoughtful leadership and collaborative approach to stabilizing California safety net system.

Be Home Zoom expands access to home and community based services for medical beneficiaries with chronic care needs. That includes unsheltered individuals with complex chronic care needs, children with complex health issues, adults who want to elders who wanna age at home, and adults who have sustained serious injuries. Providing long term care in institutions like nursing homes yields poor quality of life, high health care costs, and worse health outcomes. Then providing care in people's home.

Just wanna urge you to support Be Home Soon as a component of the budget that will be adopted.

And, again, really wanna thank you for your leadership in this area.

Mister chair, Chris McCauley on behalf of the Los Angeles Area Chamber of Commerce. We understand that there's a deal between the legislature and administration on the tax increases. We remain opposed to those measures and would like them not to be permanent. I also wanna remind you that employers are paying a $1,600,000,000 cost each and every year to repay the UI debt to the Federal Government. Thank you.

Hi. Jim Lindbergh on behalf of the Friends Committee on Legislation of California. Would like to thank, the legislature for prioritizing prison closure. We do agree that there is room for a lot more. I believe we have a vacancies of of something like 14,000 surplus, 14,000 people in prison.

Doesn't seem like a a good expenditure considering what our most vulnerable citizens are facing. I would like to thank the legislature also for funding the right grant program, the jails to job program. These are things that can make our prison system smaller over time and also for the funding to investigate sexual abuse in women's prisons. We appreciate that very much. We have other comments about health and human services that we'll submit in writing.

Thank you.

Mister chair members, Wendy Mitchell on behalf of LA Metro. We just like to reiterate the comments made by assembly member Wilson and the GGRF funding. We know that's something to be continued to be worked on. But LA Metro alone with the LC top will lose $50,000,000, which is money used for operations. And the TIRCP money is is also used.

Will have a big loss, but that is used to leverage federal funds, so that's a double loss. We encourage you to continue to work on that as the transportation funding deal was made with the legislation last year, and we feel that it's, yeah, a little bit of a bait and switch or, you know. But thank you and we we look forward to working with you and continue to work with you.

Good afternoon, mister chair and members. Amy Costa here on behalf of the California State Sheriffs Association, the California District Attorneys Association, and the chief probation officers of California. We want to thank the legislature for acknowledging and providing funding for proposition 36. We would, however, note that $50,000,000 is insufficient to provide the wrap around services needed for people to successfully, receive and complete treatment. Also, on behalf of the chief probation officers, we'd like to note we remain concerned that there's no, funding provided for pretrial services.

Thank you.

Good afternoon. Yasmin Pellet on behalf of Justice in Aging. We're very pleased to see the inclusion of the Be Home Soon California proposal in the joint legislative agreement. Also, the investments in HomeSafe and HDAP, and we're also in support of the fair share contribution. We appreciate that the legislature's joint agreement, rejects the $2,000 medical asset limit, and we look forward to continuing to work with the legislature to reform this inequitable policy.

We're also pleased that this budget rejects the governor's proposed cuts to IHSS and APS. Thank you so much.

Danica of Whole Consulting, voicing some gratitude to our champions and supporters who are here right now Assemblymember Bonta, Assemblymember Schultz, on behalf of the Vera Institute of Justice in California for the inclusion of the jails to jobs workforce development program, on behalf of the LA Public Defenders Union for the inclusion of the continued funding for the penal code revision committee and the California Policy Lab to continue their partnership and behalf on on behalf of Transformative Programming Works and the GRIP Training Institute for the inclusion of the right grant.

Thank you.

Good afternoon. Andrew Shane on behalf of the county welfare directors in gratitude to the chair, the sub chairs, our champions, doctor Sharp Collins and and miss Schiavo, for the investments in county eligibility workers, which many members mentioned today. We urge you to fight for the full funding proposed for CalFresh and Medi Cal because if we don't have the workers, we are gonna have the dire outcomes that miss Bonta and others mentioned today. So so grateful. And sub seven.

Right. It was really a team effort. Very briefly, also greatly appreciate the rejection of the cuts to IHSS, APS, the investments in child welfare in the housing and and and homeless development programs, homelessness prevention programs, and just knowing there's several critical pieces of trailer bill, including the match waiver, and and rejecting DHCS's, punitive, county sanctions TBL. Thank you.

Mister chair members, Brian White on behalf of Pacific Merchant Shipping Association, Pacific Maritime Association, and several other stakeholders who are supportive of our of modernizing our ports. We are highly concerned as some member Wilson shared about the concerns with the blanket prohibition and use of state funds for automation at ports. We think the language that's in the budget bill is is highly expansive, and it does not it's not consistent with what's been done in the budget before.

It is a massive pivot in state policy by targeting not just the equipment, but also the infrastructure that's part of that that, policy. So we would highly suggest that this language be removed from the from the budget bill.

It's policy language. It's not appropriation, and we ask for your no vote on that specific language. Thank you.

Good afternoon, Chair, Members. Carmen-Nicole Cox on behalf of the Cayenne Wellness Center. I do want to start by thanking the Black Caucus and the Legislature for funding the sickle cell centers for excellence. We definitely need to have high quality care for sickle cell warriors.

On behalf of my client, I also want to thank Senator Perez for championing our urgent budget request, because Cayenne Wellness Center is the statewide community based organization that gets sickle cell warriors to and from their doctor's appointments, that provides the no cost mental health care that is currently not in the two party deal, and we definitely want to continue working with you to see it added.

Thank you.

Thank you.

Chair and Members, Kathleen Mossburg on behalf of the local health plans. I just want to speak to the administration's proposal to move the UIS population to fee for service. We are grateful to the Legislature's proposal to allow us a little more time to have these discussions. Grateful to Chair Addis and Sub One. Grateful to Assemblymember Bonta and her championship of this issue.

We are continuing to have conversations with the Governor's office and the administration on this, but truly the fee for service system is not available for a lot of care, for specialty care, cancer treatment, dialysis, all of that. We don't have a fee for service solution for those needs, and we really need time to craft an alternative solution. So we'll continue to work with the administration. Thank you.

Good afternoon. Jesse Hernandez Reyes on behalf of the Campaign for College Opportunity. We thank the Legislature for maintaining the promise of higher education in this budget. We're especially grateful to see continued investments in the UC, the CSU, and the California Community Colleges, as well as thoughtful state financial aid investments, including those to carefully implement workforce. We're especially thankful for increased investments to support the crucial work of our dream resource liaisons at our community colleges and similar work at our high schools.

We look forward to seeing these investments in the final budget to ensure continued college access and success for all Californians. Thank you.

Good afternoon. My name is Daniela Rodriguez with Immigrants Rising, here to express our appreciation and support for the inclusion of funding for Dream Resource Centers. Last but not least, we also ask that in the coming days, you consider including in the budget a reinvestment in the entrepreneurs for social, sorry.

In the social entrepreneurs for economic development initiative known as SEED, to support small businesses, especially immigrant entrepreneurs who are under deep economic strain as their access to capital has been and continues to be greatly restricted. Thank you.

Good afternoon, Mr. Chair and Members. Connie Delgado on behalf of the District Hospital Leadership Forum, here in grateful appreciation for the inclusion of the money for distressed hospital loans, distressed hospital programs, and funding. For district hospitals, in the first round, they received more than half of the total pot. These funds represent a lifeline for district hospitals and the communities that they serve. Thank you.

Good afternoon. Alexa Rodriguez Chavez on behalf of the Latino Coalition for Healthy California. I want to express our thanks to the Assembly, Chair Gabriel, and Speaker Rivas for working with colleagues in the Senate to come to a budget agreement that delays the most harmful cuts for immigrant health. We are especially thankful for the delays in the elimination of dental for UIS, and also thankful for the delay in the move of the humanitarian groups off of the Medi-Cal full coverage.

We are also grateful for the progress in revenue generation and how that will help the health structures and health access, and we look forward to continuing to work towards restoring all of the cuts on immigrant health. Thank you.

Good afternoon, Mr. Chair and Members. Mica Doctoroff on behalf of Smart Justice California. We wanted to thank you for including prison closure in the budget, and we would urge the Legislature to continue to prioritize prison closure in order to fund other critical services, in the coming weeks. We also want to thank you so much for funding for indigent defense, for services and programs for survivors of crime, and also for rehabilitative services. Thank you so much.

Darby Kernan, on behalf of End Child Poverty California. I want to thank Assemblymember Bonta and Assemblymember Jackson for their advocacy for Promise Neighborhoods and for the investment, with community schools and the partnership of Promise Neighborhoods and place based initiatives. We also want to thank the subcommittee staff who have worked diligently with us to get this proposal into trailer bill. Thank you.

Thank you, Mr. Chair. Eduardo Martinez here on a couple of items. First, on behalf of Ultimate Health Services, I want to thank the committee for the delay in the elimination of the clinic PPS rate for the UIS population, the adoption of the alternative fee for service for the UIS transition, and the rejection of PACE cuts. Also, on behalf of Western Dental, the state's largest Medi-Cal dental provider, I want to thank the committee for the delay to cuts to dental provider rates via Prop 56.

I really want to shout out Assemblymember Addis, Assemblymember Solache, Assemblymember Bonta for all the great work, and thank you very much for that.

And then lastly, on behalf of Actors' Equity, a national labor union of theater actors, we are disappointed to see the lack of investment in the performing arts equitable payroll fund and urge the Legislature to consider even a modest funding allocation in this extremely successful workforce development program. Thank you.

Good afternoon. Mark Farouk on behalf of California Hospital Association. I wanted to start by thanking the committee and Sub One in particular for the inclusion of the money for the distressed hospital loan program. I know that was an item that was consistently discussed in Sub One. So I really appreciate the members of that committee for following up on that commitment.

I did want to note, however, disappointment related to the MCO tax proposal. We believe that Prop 35 funds should be used to produce meaningful provider payment improvements that strengthen access to care. However, portions of the proposed budget plan instead redirect those resources to support existing state obligations, reducing the direct benefit to providers and patients.

At a time when the health care system faces unprecedented financial pressures and significant federal funding reductions, California should, at a minimum, aim to maintain Prop 35 investments in 2026 at the same level as 2025. Thank you.

Good afternoon, Chair and Members. Laura Lane with the California Association of Public Hospitals. Thank you for including $250,000,000 for public hospitals in the budget due to the tireless advocacy of our champion Assemblymember Ahrens and Chairs Bonta and Addis. This is an important first step as we face unprecedented challenges that HR 1 brings. When fully implemented, HR 1 will cost our systems nearly $3,000,000,000 annually.

So we urge expanded and continuing funding to stabilize our safety net. We also appreciate the PPS delay. And finally, we look forward to continuing conversations on the UIS transition to fee for service. Thank you.

Mr. Chair and Members, I'm Erin Evans on behalf of the County of Santa Clara. We really appreciate the assistance offered in this agreement for working to mitigate the impacts of the federal HR 1, especially as our county faces a $1,000,000,000 annual impact from that bill. Specifically, we'd like to echo the thanks of CAPH for providing $250,000,000 for public hospitals, and special thanks to Assemblymember Ahrens and Chairs Addis and Bonta for their work on this proposal.

We also appreciate funding included for eligibility workload for both CalFresh and Medi-Cal, and the $125,000,000 for emergency services alternative to indigent care. Thank you to so many on this dais for that work.

We also appreciate the rejection of the IHSS proposal to shift cost to counties of increased hours per case, and we support the $900,000,000 in HAPP funding for round seven. Finally, we'd like to lend our support for the additional revenues, including the fair share contribution. Thank you.

Good afternoon, Chair and Members. Natalie Spivak with Housing California. On behalf of a coalition of over a 100 affordable housing, homelessness, and tenant protections organizations statewide, I want to say thank you for fighting for critical investments in HAPP, state low income housing tax credits, and the multifamily housing program. We also deeply appreciate the Legislature's support for an affordable housing bond and its commitment to maintaining GGRF investments in affordable housing, transportation, and clean air programs promised last year.

We also urge the Legislature to ensure that funding in the final budget includes three programs not named in the joint legislative budget: CalHOME, the Joe Serna Jr. Farmworker Housing Grant Program, and the portfolio reinvestment program. We look forward to continuing to work with you. Thank you.

Kim Rothschild, on behalf of the IHSS public authorities and the collaborative for long term services and supports. Thank you for rejecting the cuts to IHSS. And thank you to Chair Jackson and Nicole for working with our advocates on the program.

Mr. Chair and Members, Michael Pimtel here on behalf of the California Transit Association, as well as a coalition of more than 60 transportation, housing, local government, environmental, labor, business, and disability rights organizations, asking you to protect the tier three greenhouse gas reduction fund programs. We appreciate that the budget includes placeholder language that keeps the conversation open. We look forward to engaging with you to help move that forward and into completion.

In particular, we're supportive of the affordable housing program that's in transit capital, the interstate rail capital program, and the low carbon transit operations program. And then finally, on behalf of the California Transit Association, I ask for the appropriation of the $230,000,000 for the zero emission transit capital program. Thank you.

Good afternoon, Chair, Members. Michelle Gibbons with CHEAC representing local health departments. First, I want to express our huge appreciation for maintaining the public health information technology systems as well as the disease intervention specialist. We also want to thank the Legislature for the mitigation on HR 1 impacts to counties. And in particular, I want to thank the Assembly for your leadership on the indigent care piece.

I will say in order for this to be an effective solution, we need to make sure that these funds are used to create a state benefit that's state funded, state administered emergency medical services. This way, it maximizes the connection to Medi-Cal and helps to get people back into full scope Medi-Cal as soon as they made an exemption and/or fulfill the requirements. So I appreciate your leadership and hope that these elements will make it into the final budget agreement. Thank you.

Kelly Brooks here on behalf of several clients. First, on behalf of the Urban Counties of California, the counties of Santa Barbara, Santa Cruz, Ventura, Riverside, Colusa, Plumas, and Alpine. Thank you so much for your work to mitigate the impacts of HR 1. We appreciate the package included in the budget.

Additionally, counties are thankful for your actions on IHSS, adult protective services, and the Behavioral Health Services Act revenue stabilization trailer bill. On behalf of UC Health, thank you for the funding for public hospitals as well as the Prop 56 dental funding.

Special shout out to Assemblymember Ahrens, Assemblymember Addis, and Assemblymember Bonta. On behalf of the Center for Elders Independence, thank you for your PACE actions. On behalf of LifeLong, thank you for the delay of the PPS elimination. And finally, on behalf of Diaper Banks, thank you for the 16 and a half million dollars to make sure there are diapers available for children of all ages, and a special thanks to Assemblymember Ortega for all of her advocacy.

Good afternoon, Chair, Members. Whitney Francis with the Western Center on Law and Poverty. We appreciate progressive revenue solutions that prevent people from losing their health and food benefits and echo our support for the Fair Share contribution plan. We also appreciate the inclusion of the Be Home Soon California proposal that recognizes keeping people in community is not just the preferred choice, but results in savings. And we support the rejection of the Governor's proposal to drastically reduce the asset limit to $2,000 and rejection of IHSS cuts.

Finally, while the Legislature's delay in Medi-Cal cuts targeted at immigrants is a vast improvement from the May revise, we remain concerned with the discriminatory cuts and look forward to the work ahead. Thank you.

Good afternoon, Mr. Chair and Members. Pamela Gibbs representing the Los Angeles County Office of Education. We'd first of all like to express our thanks for your leadership this year on what we know has been a challenging budget. First of all, thanking you for community schools funding, the $1,000,000,000 and the intent to implement the program with fidelity to the existing framework. We also urge you to consider also making sure that there's regional technical assistance for existing and the expanded school sites that'll be implementing the program.

Also, for universal pre-kindergarten, for your support of the Legislature's version of funding for that program, which would provide technical assistance for county offices of education and local education agencies to help the universal pre-kindergarten schools to get training and development and also to help them improve and continue to provide support and assistance for this still very new program, which was adopted in 2023.

And lastly, we want to urge your continued support for school teachers who are part of the educator workforce package that you've adopted. We want to make sure that teachers can continue to seek leadership positions on school sites as principals and continue that pipeline. So thank you very much for your support again, and we look forward to working with you.

Good afternoon, Chair and Members. Jeissy Lee with the California Taxpayers Association and on behalf of a broad coalition of taxpayers and industry associations opposed to SB 122, the tax on digital software and software as a service and the limitation on tax credits. If enacted, this would be one of California's largest tax increases in recent memory. This is not the time to make California less affordable and more expensive, particularly for the industry striving for its future.

For these reasons, we urge you to reject this bill. Thank you.

Hello, Vanessa Flores. On behalf of Alameda County Board of Supervisors, we appreciate your leadership in providing funding to establish county indigent care programs and for your continued support of California's public health hospital system. We also appreciate your commitment to maintaining funding and administrative support for CalFresh and Medi-Cal and CalFresh county eligibility operations. Additionally, we thank you for rejecting the Governor's proposals related to IHSS, including the proposed cost shifts to counties. Thank you.

Mr. Chair, Brendan Rupicki on behalf of a number of transit clients: Monterey Salinas Transit District, Santa Cruz Metropolitan Transit, Caltrain, San Mateo County Transit, Solano County Transit, San Francisco Bay Ferry, San Joaquin Regional Transit, SunLine Transit, County Connection via transportation. I want to echo the comments made by the California Transit Association, and as it relates to the greenhouse gas reduction fund, would ask that the Legislature prioritize fully funding tier three programs in the forthcoming negotiations. Thank you.

Good afternoon, Mr. Chair, Members, and staff. Keely O'Brien with the Western Center on Law and Poverty. Here to thank the Legislature, especially subcommittee Chair Dr. Jackson, for the $5,000,000 investment in the California Food Assistance Program plus expansion. The automation changes prepare California to assist people losing CalFresh due to HR 1 cuts, and set us up to protect more than half a million Californians from hunger and destitution.

More, we also thank the Legislature for providing the necessary funding to support Cal Food, CalFresh Outreach, the Diaper Bank Network, for assisting counties with HR 1 implementation, and for funding legal services and deportation defense. We also thank you for the prison closure proposal, and we urge the Legislature to stand with the people of California by adopting a budget that requires wealthy corporations to pay their fair share, and look forward to supporting progressive revenue trailer bills.

Thank you. And look forward to supporting progressive revenue trailer bills. Thank you.

Hello, and thank you, Chair and Members. My name is Sam Wilkinson, and I'm a member of the End Child Poverty in California Coalition. We are thrilled to see a budget premised on progressive revenue solutions, have full support for the fair share contribution fund, as well as permanently capping corporate tax credits. These progressive revenue proposals move California closer to a tax system where wealthy corporations pay their fair share communities rely on.

In regards to health care, we'd love to align our comments with Justice in Aging and Western Center on Law and Poverty. On child care,

we hope that a final budget can include a right sized COLA for providers. Childcare providers are at the heart and soul of our communities, and they should be paid an annual increase that covers the rising costs. We appreciate the 22,770 new childcare spaces in the Legislature's state budget proposal. Thank you so much.

Good afternoon, Mr. Chair and Members. Dennis Cuevas-Romero with the California Primary Care Association Advocates. I really want to express our deep appreciation for all the hard work. We know these were very hard decisions, in particular to subcommittee one and all the hard work all year to protect and limit the harm to patients across the state.

In particular, I really want to express appreciation for the PPS protection for UIS patients at clinics, funding for gender affirming care, reducing the harm to all the other rejections or delays on Medi-Cal cuts, and really express appreciation for allowing ongoing conversations on the transition for the UIS population.

Thank you so much for all your work. Appreciate it.

Good afternoon, Chair and Members. Charlotte Neal representing Child Care Providers United, speaking on the work of family child care providers. By offering us half the amount, it's the Legislature saying our work is only half as valuable. We are already struggling to make ends meet, and providers across California are being forced to close every day because reimbursement rates cover a fraction of the cost. This COLA doesn't even keep up with inflation.

Thank you for your support.

Thank you. Good afternoon, Mr. Chairs and Chair, Members. My name is Samsam Khalif, and I'm a family home childcare provider from San Diego, part of the UDW. I just want to share with you on the increase in costs. In the past year, my grocery price to provide nutrition meals to the children in my care, for many of them the only nutrition food that they receive, have almost tripled.

And the gas I buy to transport school aged children to and from school while their parents work as nurses, dentists, and delivery drivers has increased each week by close to $100. When I already can't pay myself a salary on the state's low rates, how am I supposed to stay open in my business? Thank you for listening.

Hello. Good afternoon. I'm Deo Augustine. I am a childcare provider for eighteen years and a proud member of CCPU SEIU 521. I see firsthand how hard working families in my community struggle with a crushing cost of living.

But right now, the state's reimbursement system is crushing providers too. What California pays us does not reflect the true cost of care. Everything has gone up except our rates. Nutritious meals, gas, premiums, insurance, maintaining proper staff to ratios to ensure safety and quality attention costs more than ever. Yet we struggle even to meet the minimum wage.

Because if reimbursement rates fall behind, California's entire childcare system faces constant destabilization. That's why I'm asking that all early educators receive the full 4.31% COLA. Again, for all early educators, 4.31% COLA. Thank you.

Hello. My name is Ivonne Bejar. I'm a childcare provider for twenty four years here in Sacramento, a member of the CCPU. On the cost of living in California, recent data show that the average Californian has to take home $30.48 per hour just to afford their necessities. We can barely pay ourselves a salary, and those of us who do are taking home 7 to $10 an hour.

How do you expect us to keep our doors open? How do you expect us to survive? Please, I request you attend to this matter because it's very, very urgent for my community. Thank you.

Good afternoon. My name is Jessica Magdaleno and I am here representing CCPU childcare providers across California. When California invests only half as much in childcare providers, it raises an important question. Is our work worth only half as much? Every day, family childcare providers care for California's children, support working families, and help keep our economy moving.

Yet many providers are struggling to keep their doors open because reimbursement rates cover only a fraction of the true cost of care. This proposed COLA does not keep pace with inflation. We are not asking for special treatment. We are asking for fairness and recognition of the essential work that we do. Investing in childcare is investing in children, families, and the future of California. Our work matters and our voices deserve to be heard. Thank you.

Good afternoon, Chair and Members. Thank you for the opportunity to speak. I am Aurora Reyes, a member of CCPU Local 99. I am a family childcare educator of nineteen years from Los Angeles. I urge you to fully fund and deliver the 44,000 slots promised in 2021's budget with a strong priority on the flexible voucher based options.

Families across California are struggling to access care as childcare deserts grow. Reimbursement rates are so low that providers can't keep their doors open. Even when families qualify, a lack of flexible options means that they can't find the care that meets their needs. I've worked with parents who have been told the wait list for subsidized care is up to three years. For them, this isn't a delay.

This is denied. But adding slots alone is not enough. Without increased provider pay, funding new slots is an empty gesture. We cannot expand access if providers are being forced to close. Investing in childcare means investing in our workforce, our businesses, and our economy. Thank you.

Good afternoon, Members. My name is Wendy Moran, family childcare provider and proud member, Local 99. For seventy years, I have served children and supported families in South Central Los Angeles. My childcare program is more than a business. It's a safe place and a trusted space where children learn and feel safe.

Today, many providers and families are living with fear and uncertainty because family childcare programs operate in our homes. It is critical that providers understand their rights and responsibilities so we can protect ourselves and the children in our care, and the families who depend on us. AB 2379 will ensure that family childcare providers across California have access to consistent statewide know your rights training regardless of where they live or what language they speak.

This training will help us providers to stay informed, prepared, and focused on what matters the most: keeping our children safe. I respectfully ask you to support AB 2379.

Every family childcare provider deserves access to the information and tools needed to serve children and families with confidence. Thank you for your consideration.

Good afternoon. Richard Raya, CEO of Marin Promise Partnership, and also a member of the California Cradle to Career Coalition. Here to thank you for your inclusion of Promise Neighborhoods in the budget. We know that Promise Neighborhoods result in $4 back for every $1 invested due to increases in kindergarten readiness, graduation rates, and other positive academic outcomes.

And in my county, Marin, we are launching multiple Promise Neighborhoods, working closely with our community schools. And I know communities across the state are doing the same, and we are shovel ready. Lastly, I want to say thank you to Assemblymember Mia Bonta and Assemblymember Jackson for their unwavering commitment to Promise Neighborhoods. Thank you.

Greetings. Edgar Chavez. I'm the executive director of Hayward Promise Neighborhoods. We're a fifteen year place based initiative that recently received a 13 and a half million dollar federal grant cancellation.

We are here to continue advocating for emergency funding for Mission, Chula Vista, and Hayward to continue this backbone support in the state. We're so thrilled and thankful for the support of including Promise Neighborhoods and community schools funding support to continue expanding and sustaining current Promise Neighborhoods. We're really thankful for Assemblymember Bonta and Dr. Jackson for pushing us for years.

We were there in East Oakland when we first launched this five years ago, and seeing the state really adopt this model and so many ready communities across the state ready to invest in their neighborhoods. Thank you.

Sarah Brennan with the Weideman Group. First, on behalf of Valor, we want to thank the Assembly for the inclusion of $50,000,000 in the budget for the victims of crime funding. And on behalf of NextGen California, we thank the Assembly for the critical investments in immigrant defense, healthy school foods, and higher education. We urge inclusion of Cap and Invest to protect climate funding, the student loan empowerment network to protect student borrowers, and additional Division of Apprenticeship staffing in the final budget negotiations. Thank you.

Good afternoon, Chair and Members. My name is Ryan Barbosa. I'm a student at UC Berkeley, and I just would like to share my personal appreciation for the proposed increase in legal counsel to undocumented folks. Immigrants are the backbone of California's economy. And as someone who's now a Brazilian American and has navigated the brutal and confusing immigration system, I think that this is an amazing initiative that will help to support other folks who deserve just a chance for a better future just like I did one day. So thank you.

Good afternoon, Chair, Vice Chair, Members. I'm Nina Wyler Harwell with AARP here on behalf of our 3,200,000 members. I'm just here to say thank you. Thank you for rejecting that awful age of eligibility increase to adult protective services.

Thank you for rejecting essentially the cut to CalPACE or the CalPACE providers, and I really appreciate the thoughtful approach you're taking in terms of extending the reduction in the Medi-Cal asset test to next July, setting it at 21,000, and we look forward to further conversations on that next year. Thank you.

Good morning, or good afternoon. Excuse me, Chair and Members. Beth Malinowski, SEIU California. On behalf of Unrig California and Fight for Our Health campaigns, I strongly support the new and permanent corporate source revenue and the fair share from big corporations program, including the legislative two party agreement. We stand with our Health for All coalition supporting the delays to the most harmful Medi-Cal cuts, and particularly grateful for the maintenance of the current Medi-Cal asset test until 07/01/2027. We're grateful the joint agreement maintains core funding for IHSS by rejecting all of the Governor's proposed cuts.

Regrettably, without a dedicated $150,000,000 for WQIB, we risk losing quality gains we've made in skilled nursing homes.

Lastly, we're grateful for the strong commitment to county health and human services. In particular, I want to align with CAPH on the dedicated funding for public hospitals, with CWDA on the funding for both CalFresh and Medi-Cal eligibility work at the counties, and lastly, aligned with CHEAC on the alternative for indigent care or state funded state pilot program for Medi-Cal emergency only services for those falling off of Medi-Cal due to HR 1 work requirements. Thank you.

Good afternoon, Chair, Members. Emma Jungwirth on behalf of the California State Association of Counties. CSAC values the Legislature's partnership and commitment to prioritize resources that support counties in delivering the services that California's communities rely on. We are in strong support of several elements of the legislative budget agreement. For HR 1, CSAC is grateful for the resources that will help counties preserve the safety net.

This includes around $450,000,000 for county eligibility work to help people maintain their Medi-Cal coverage and CalFresh benefits, $125,000,000 for an alternative to county indigent care for the creation of the emergency only Medi-Cal program, $250,000,000 for public hospitals. We're also supportive of the $190,000,000 for the existing distressed hospital loan program. We're grateful for the Legislature's action to reject the administration's IHSS cost shift proposal. CSAC appreciates the Legislature's investing an additional funding for a total of $900,000,000 for round seven.

We do continue to advocate for inclusion of the intent language to provide an additional $1,000,000,000 for the HAPP program in 27-28.

And finally, on Proposition 36, we greatly appreciate the Legislature's recognition of the ongoing challenges counties face in delivering necessary services, and we continue to advocate for increased resources that are ongoing and sustainable across multiple impacted county departments. Thank you.

Good afternoon, committee Chair and Members. Yarelie Magallon with Political Solutions on behalf of the Business Software Alliance. Here today to voice BSA's opposition to the software as a service tax that was included in the larger legislative agreement. This is a major expansion of California's tax base that will increase cost for consumers, harm small businesses, undermine investment, and weaken the state's economic competitiveness. Thank you for the opportunity to voice our concerns.

Good afternoon. Mandy Deese with Southeast Asia Resource Action Center, SEARAC. I'm here to echo our appreciation alongside other immigrant rights organizations on the delays and rejections across the board to help preserve health access and limit the harm to refugee and immigrant communities. I also want to extend our gratitude for the additional funding for legal services to meet the moment.

Lastly, I also want to urge the Legislature to allocate ethnic studies funding to fulfill state statute for the high school ethnic studies mandate, but also to recognize its important intersection across health, education, and economic equity. Thank you.