Senate Standing Committee on Budget and Fiscal Review

The Senate Committee on Budget and Fiscal Review will come to order. We're holding our hearing here in 1021 O Street, Room 1200. I would ask all members to join Senator Niello and myself so that we can establish a quorum. We will do that whenever the appropriate number of people arrive, and public comment will be heard after all discussion items have been presented, and I'll talk about that in a moment.

Today, we'll hear Assembly Bill 111, a budget bill junior that amends AB 109, the Budget Act of 2026, to represent a budget agreement between the Legislature and the Administration. We'll also hear Assembly Bill 112, a budget bill junior that makes technical amendments to the 2025 and prior year's budgets, along with 16 trailer bills and two related policy bills. This budget package is balanced in both 2026-27 and 27-28 fiscal years.

It includes 351.7 billion in total spending, 251.5 billion of which is the General Fund. It includes record reserves of 35.2 billion, something that the Vice Chair and I did not experience during our Assembly years. It cuts the long-term structural deficit in half. This budget does reflect the Foundation for the Future budget put forth by the Senate Democrats earlier this year. It's responsible, it protects core programs that Californians depend on, and it delays other painful program cuts.

It includes difficult decisions on both targeted reductions and new revenues. Most significantly, the budget provides 22,770 new childcare slots for California families. It provides $900 billion for the Homeless Housing Assistance and Prevention Program and 700 million for affordable housing programs. It rejects reductions to in-home support services. It maintains full scope Medi-Cal for asylees and others who are no longer eligible for federal funding through the 26-27 budget year with a commitment to work to maintain eligibility beyond that point. The budget delays implementation of plan reductions in dental services and clinics to July 1st, 2027.

It continues the delay of Medi-Cal premiums for the UIS population until July 1st, 2027 but requires the governor to set and announce a premium level in the 2027 May Revision. It makes key investments in new judgeships, courthouse maintenance, and courthouse construction. It provides significant investments in various other areas of the budget, including TK-12 education, community colleges, CSUs, and UCs. It invests in other programs, such as CalFood, county administration, immigrant legal aid, Proposition 36, and many others.

I would like to thank the Assembly and the Administration for their partnership, the Pro Tem for her leadership, and the Budget Sub chairs and committee members and staff for significant workload it takes to complete a budget. Process wise, we are going through each bill without public comment and without questions or comments from the committee, and when we are done going through each bill, we will return it to the committee for questions or comments on any of the bills that are presented. And when we are done with the questions or comments, we will go to the public for public comment.

And I will probably at the time take a survey of who wants to speak and decide whether there is some limit on the time that we need to do so that we can get out of here during our natural life somehow. And then, before we begin, I am going to go to my Vice Chair and ask if he has any opening comments.

Thank you, Mr. Chair. Appreciate that summary. I received this late yesterday afternoon. This was produced by our Caucus Budget staff over the weekend. I suspect they didn't get any sleep. We had a two-hour briefing via Zoom yesterday, late afternoon, early evening. This process leaves a lot to be desired. There is way too much detail in here for us to totally comprehend what's in here. I know that I'll hear that all of it's been out there in the public, but it's hard to tell what's been out there is in here and what's been out there is not in here.

There is undoubtedly lots of policy here, certainly one in particular with regard to the Education Governance, policy that absolutely should go through a Policy Committee process, not the Budget. I've talked about that an awful lot. It is an abuse of the process that we have unfortunately got all too accustomed with.

And I hope as we move to a new administration next year that that will stop or at least mitigate a bit. There are multiple violations of the single-subject rule that sort of will go on because it can only be required by suing, and a court case takes forever. It is just a process that is very difficult to have a cohesive, coherent, deliberative process on. It is also extremely burdensome on staff.

The Budget Committee, as well as our Budget staff, they received the RNs on this late Friday. That's a weekend without much sleep, I suspect. All of staff did yeoman's work on this and they are to be commended and thanked profusely, but it is a huge burden on them. So I look forward to learning more. I will probably have lots of abstentions because I don't have enough detail to be certain about what is in here. But thank you, Mr. Chair.

Thank you, Mr. Vice Chair. Appreciate your comments. We are now going to go to Erika Li from the Department of Finance for a presentation on each bill, and then we have Ross Brown here from the Legislative Analyst's Office who may or may not comment on the different bills, but we will give him the option, and as I said earlier, we will go through each bill and then we'll bring it back to the committee for questions and comments. So Ms. Li, welcome to the committee.

Thank you. Good morning Chair Laird, Vice Chair Niello, and members of the committee. Erika Li with the Department of Finance. I'm here to provide an overview of the 26-27 Budget which includes 18 bills. There's two budget bill juniors, 16 trailer bills, and at the end, there will also be a presentation on two policy bills, one on education governance and the other on ballot measure placement.

This final budget is similar to the architecture of the governor's May Revision, as well as the legislature's two-party plan. It balances through two fiscal years with the positive State Fund for Economic Uncertainty, or our SFEU, with 4.5 billion in the Budget Year 26-27, and 403 million in the following year, 27-28. In addition, the budget reduces the outyear structural deficits that we identified at the Governor's Budget, and I'd just like to point out that we more than halved what those deficits were, over 20 billion at the Governor's Budget in the outyears.

The budget does not include the assumed additional 5 billion in higher revenues. That was included in the legislature's plan for the current year, and it reduces a significant amount of the additional spending that was included in that plan, and these were two issues that I had formally noted concern about here in this committee.

Instead, this budget represents a balance of program reductions and increased revenues to address the near-term budget deficits and the longer term structural deficits. The 2026 Budget includes total expenditures, as mentioned, of 351.7 billion of which 251 billion is General Fund. The budget also includes total reserves of 28.8 billion, which includes 4.5 billion in the SFEU, 15.1 billion in our Rainy Day Fund, and 9.2 billion in our School's Rainy Day Fund.

And additionally, there is 6.4 billion set aside in the Surplus Holding Account, and these are anticipated revenues that will be set aside for allocation in next year's budget. But together, there are over 35 billion in funds that are set aside to help build fiscal resiliency in this budget. So with these remarks, I will begin the presentation of the bills. And bear with me, there are a lot of bills. But starting with AB/SB 111, which is a budget bill junior that amends AB 109.

Most notably, changes to the legislature's budget, which was part of AB 109, include 1.3 billion General Fund in budget year for Medi-Cal to implement HR 1 requirements, 300 million ongoing Health Care Affordability Reserve Fund to expand the state Premium Subsidy Program to enrollees at Covered California, 250 million one-time General Fund in 26-27 to support public hospitals, 90 million one-time General Fund for grants to distressed hospitals and with the authority to allow for an additional 50 million General Fund augmentation for this purpose.

There's 15.5 million one-time for CalRx to support low-cost epinephrine and tuberculosis drugs, and it also includes fiscally neutral funding shifts that are related to the Education Governance Proposal included in AB 181, which I will be going over later. Okay. And moving on to the next bill which is--

Let me just-- first, thank you, but I'm just at the end of each bill gonna ask the Legislative Analyst if you have any comment.

Thank you, Mr. Chair and members. Ross Brown with the LAO. We don't have any additional comments on any of the bills, but we are available for questions.

Then I will not go to you when she's done from here on out. You just saved us some time. Thank you. Ms. Li, on to--

Continued. Okay.

--112.

AB 112 is a budget bill junior that makes various technical corrections to past budget acts and provides a 4.2 billion General Fund augmentation in 25-26--so in the current year--for the Medi-Cal Program to cover the current year deficiency. It also reappropriates 99.3 million General Fund from 23-24 to resolve a current year deficiency for CDCR. Moving on to the next bill, which is AB 126, a trailer bill on education.

This bill provides several significant ongoing Proposition 98 General Fund investments, which include 2.2 billion increase to the Local Control Funding Formula, or LCFF, to reflect a 2.87% cost-of-living adjustment, and 1.1 billion to provide a Super COLA for school districts, charter schools, and County Offices of Education through the LCFF. In addition to addressing ongoing cost pressures for schools, these funds will also offset costs for local educational agencies to provide employees with up to 14 weeks of paid pregnancy disability leave.

The bill also provides several significant one-time Proposition 98 General Fund investments, including 5 billion for the Student Support and Professional Development, which is a discretionary block grant, and it provides discretionary funding to local educational agencies to manage rising costs.

About 757 one-time-- 757 million one-time Proposition 98 General Fund to support the Learning Recovery Emergency Block Grant, which provides funds to LEAs to establish learning recovery initiatives through the 27-28 budget--sorry--school year, 428 million for educator workforce investments to support the Student Teacher Stipend Program, the Classified School Employee Teacher Credentialing Program, and the Pathways to Bilingual Teaching Program. And next, I will move on to AB 135, which is the trailer bill on higher education.

AB 135 is-- this bill provides funding and policy direction for various community college program and activities, expands the availability of financial aid, and makes various other technical or clarifying changes, including providing a framework for the state's implementation of the new federal Workforce Pell Grants Pell Grant Program to make Pell Grant funds available to eligible students in short-term workforce training programs in high-skill, high-wage, or in-demand industry sectors or occupations.

It expands the state Cal Grant Transfer Entitlement Program to students aged 29 and 30 for new and renewed financial aid awards. Newly eligible students would be able to renew their awards for five years. It requires the Office of the Chancellor of CSU annually to develop enrollment targets for each campus.

It changes the calculation of funded credit full-time equivalent students incorporated into the community colleges' Student Centered Funding Formula for three year-- for the three-year rolling average to the greater of the three-year rolling average or the current year FTE, and it requires community colleges to provide employees with up to 14 weeks of paid pregnancy disability leave beginning January 1, 2027. Okay. And moving on to the next bill. AB 130 is the Early Learning and Childcare Education Omnibus.

I think it's 150. Am I right?

Yes.

Okay.

Excuse me. AB 150. Yes. And I have my glasses on too. So, I made a mistake. Okay. Thank you. This bill implements the following significant Early Childhood Education related proposals: sets the childcare cost-of-living adjustment to 2.01%, it provides authority to the Department of Social Services to administer a grant program for childcare centers and family childcare homes for infrastructure funding related to natural disasters, and appropriates 25.7 million federal funds for this purpose.

And finally, it authorizes the DSS--Department of Social Services--to transfer funding between childcare contractors within childcare programs in order to maximize the number of children being served. The next bill is AB 152, the Human Services Omnibus. This bill implements the following proposals. It increases the CalWORKs Maximum Aid Payment by 1.8%, effective October 1 of this year.

It implements new CalFresh county data reporting policies to increase transparency, it waives the increased county share of CalFresh administrative costs due to HR 1 for three years, it extends the CalFresh Fruit and Vegetable Electronic Benefit Transfer Pilot until June 30th, 2028 to accompany a 20 million Budget Act appropriation for the program, it clarifies the use of adoption assistance program funds for in-state and-- for in-state out-of-home placement and wraparound services effective January 1 of 2028, and it requires the Department of Social Services to make transition support services available to adoptive families with youth returning from out-of-state placements and to report to the legislature as specified.

The next bill is AB 163, Developmental Services Trailer Bill. This bill implements the following proposals. It strengthens regional center governance, oversight, and administrative efficiencies by professionalizing boards and streamlining funding allocations, it preserves overtime protections for providers of supported living services, it reduces administrative barriers for individuals seeking employment services, and it establishes a new federally mandated process for individuals to submit grievances related to individual rights and service delivery with an emphasis on accessibility and transparency.

The next bill is AB 164, the Health Omnibus, and this bill implements the following: transitions individuals with unsatisfactory immigration status to the fee-for-service delivery system effective January 1 of next year, it implements $50 monthly premiums for adults aged 19 to 59 with unsatisfactory immigration status effective July of 2027, subject to determination in the 27-28 May Revision, reinstates the Medi-Cal asset limit at 21,000 for individuals, 31,000 for couples, effective July 1 of next year.

It delays various Medi-Cal General Fund solutions by one year to July 1, 2027, including the elimination of prospective payment system reimbursement to clinics for state-only funded services and the elimination of dental benefits for adults 19 and older with unsatisfactory immigration status, and finally, it appropriates up to 576 million over four years from the AIDS Drug Assistance Program, or ADAP rebate fund, to support services for those living with and at risk of HIV. The next bill is AB 165 on skilled nursing facilities. And generally speaking, this bill provides a one-year extension of the Skilled Nursing Facility Quality Assurance Fee and Long-Term Care Reimbursement Act to December of next year, 2027.

The next bill is AB 166, which is the Resources Trailer Bill, and this is a Natural Resources and Environmental Protection trailer bill that extends the Plastic Market Development Payment Program to 2029 and provides clarification, technical cleanup, and necessary updates to the California Fire Service Training and Education Program, the California Fire and Arson Training Program--sorry--Training Act, and the Generation and Handling Fee.

And let me say thank you. When I was a Resources secretary, one year the Resources Trailer Bill was never approved. In another year, it went to the last week, so this is unbelievably timely. So thank you.

Okay. The next bill is AB 168, the Public Resources or the Energy Trailer Bill. This bill establishes a new incentive program for first-time buyers of light-duty zero-emission vehicles. The budget includes 135.5 million one-time Special Funds for this purpose. It authorizes funds previously provided for the Distributed Energy Backup Assets Program to be used for the Demand Side Grid Support Program.

It adjusts the annual salary of the Vice Chair of the California Energy Commission, it clarifies that contracts with the Western Climate Initiative to operate the cap-and-invest auctions are part of a membership agreement, and finally makes clarifying and technical changes to the Wildfire Fund. And the next bill is AB 169, Transportation Trailer Bill.

AB 169, among various changes, supports modernization efforts at the Department of Motor Vehicles through efficiencies, as well as an increase in the number of Californians that can receive a mobile driver's license through DMV's pilot program. And the bill also includes enabling statutory changes and accompanying safeguards for DMV to meet federal real ID requirements and authorizes automated enforcement for the Games Route Network that Caltrans will stand up on the state highway system for the 2028 Los Angeles Olympics. The next bill is AB 170 which is the Governor's Reorganization Plan of 2025 or on housing.

The Housing and Homeless Trailer Bill codifies the Governor's Reorganization Plan, or GRP 2025, which dissolves the Business Consumer Services and Housing Agency and creates two stand-alone cabinet level agencies, the first being California Housing and Homelessness Agency and second being Business and Consumer Services Agency, and this becomes operational July 1 of 2026.

The next bill is AB 171, and it is a labor trailer bill. This bill adopts comprehensive reforms to the Subsequent Injuries Benefits Trust Fund Program to refocus the program on its original intent and protect the viability of the program and the benefits it provides to injured workers. It includes 3 billion in Proposition 2 funding for the CalPERS Supplemental Pension Payment in the budget year. It includes 1 million General Fund for administrative cost to implement the Fair Share Act if enacted by AB/SB 177. It makes other various technical changes.

And the next bill is AB 172, which is the State Government or General Government Trailer Bill, and this bill increases fees for the California State Athletic Commission. It authorizes the Office of Land Use and Climate Innovation to establish and collect fees for the submission of California Environmental Quality Act documents to support the cost of operating, maintaining, and enhancing the State Clearinghouse database.

It codifies the Farm to School Program at the Department of Food and Agriculture that shifts clerical responsibility for the State Race Track Leasing Commission from the Department of Finance to the Department of Food and Agriculture, and it authorizes certain expenditures from the Food and Agriculture Fund to be exempt from the cap on administrative costs for the fund. And the next bill is AB 174, the Courts Trailer Bill.

The Courts Trailer Bill extends the deadline for superior courts to provide court users access to lactation rooms from July 1, 2026 to July 1, 2029, and it extends authority for courts to conduct remote court proceedings in specified cases to January 1 of 2032. And the next bill is AB 179, the trailer bill-- another trailer bill on housing. Most notably, the Housing and Homelessness Trailer Bill language does the following.

It aligns local policies to lower costs for state-funded housing programs by directing state dollars towards building affordable housing rather than offsetting locally imposed costs. It establishes the Disaster Rebuilding Fund, which is aimed at supporting residential rebuilding in disaster-impacted areas and has funding included in the budget bill. It further integrates and strengthens the state's affordable housing finance system by improving the alignment of affordable housing programs to better coordinate state housing resources.

It makes programmatic changes to the Affordable Housing and Sustainable Communities Program to streamline administration and better leverage complementary housing subsidies. It includes the enhanced accountability and performance measures for the Homeless Housing Assistance and Prevention Program, as we all know-- we all know this is HHAP.

And moving on to the next trailer bill. AB 180 is the Taxation Trailer Bill. This bill replaces the 1% cap of the Property Tax Postponement Program with a fixed annual allocation of up to 300,000 for manufactured home postponements. It extends the California Competes Tax Credit Program for five years, providing certainty for house-- for California businesses regarding this economic development incentive, and it excludes contributions to the new federal savings accounts for children referred to as Trump Accounts from state taxable income conforming with federal law. Okay.

And those were the budget related bills and trailer bills, so moving on to AB 181, which is the Education Governance Bill. So this bill establishes the position of education commissioner appointed by the governor and confirmed by the Senate to be responsible for the daily management of the California Department of Education beginning on January 1 of 2027. The State Board of Education would continue to serve as a governing and policy determining body of the department.

The bill also leverages the roles the Superintendent of Public Instruction has on the CSU Board of Trustees and UC regions by adding the superintendent as a voting member to both the State Board of Education and the California Community Colleges Board of Governors, empowering the superintendent to be a policy leader across our public education system.

And the last bill is another policy bill, AB 182. This policy bill is an urgency statute that has no fiscal impact. This bill is necessary for the Secretary of State and county election officials to prepare ballots and related materials for the November 3rd, 2026 Statewide General Election and therefore must take effect immediately. This bill specifies that five particular measures submitted to the voters at the November 3rd Statewide General Election will be the first five measures to appear on the ballot.

The bill will not affect the placement or numbering of any other measure that will be submitted to the voters at the same election. And the ballot measures are to be numbered as follows: Proposition 1 is the Veterans and Affordable Housing Bond Act of 2026, Proposition 2 is the Save for California's Future Act, Proposition 3 is the California Children's Education and Health Care Protection Act of 2026, Proposition 4 is the California Fair Elections Act of 2026, and lastly, Proposition 5 is the Senate Constitutional Amendment 1 of the 23-24 regular session. And with that, I am done with the presentation of the bills. Thank you.

Thank you very much. Let me ask-- okay. Nothing from the LAO, but they are here. Let me just say to members or member staffs if you're listening, we only have seven people here. We're three short of a quorum. We are about to move to questions and comments from committee members. You could miss that if you don't come to the room. So let me ask who would like to ask questions or comments. I'll create a list. Okay. Smallwood-Cuevas. Okay. Senator Richardson, did I see your hand?

Yes.

Okay.

Of course.

I'll go after her.

Okay. Anyone else? Okay. Great. Then we will bring the matter back, and we'll start with Senator Smallwood-Cuevas, and Senator Durazo is on deck.

Thank you, Mr. Chair, and good morning, colleagues, and really appreciate the very speedy overview of all of the budget items and some of the punch lines on the budget. I think we have been in a long conversation. This budget has been certainly a difficult one in so many ways and it really is a moment for us to demand some honesty here in terms of where we're going, in terms of who we're leaving behind, and what are we going to do to fix that.

These are-- you know, these votes are not accidental today. A lot of it has come from Washington. A lot of it has been about the decisions made at the federal level and Washington essentially turning its back on working people, particularly those working in low-weight sectors who rely on Medi-Cal services, food services, and the Safety Net. In states like California, it's really our responsibility to make sure that those working families are not are not standing alone, and I think this budget attempts to do that in a serious way for some, but certainly not for all.

And I want to call attention to AB 171 in particular, Section 26 of this measure for funding for the Fair Share for Big Corporations Act. This is something a lot of our colleagues in the Senate, including myself, worked on because our constituents felt it was an issue of fairness, that it was about making sure that working people alone were not carrying the burden themselves, and we tried to get as far as we could with this, but appreciating this landing place, which to me is really a springboard into the work that we have to do next year.

Right now, we are asking communities, particularly our low-wage communities, our undocumented communities, our immigrant communities to absorb an incredible burden while at the same time we have some of the most profitable corporations in the world who are essentially shifting their costs for their healthcare onto working families.

This is not a balanced formula, and I think Fair Share is about getting us to a balanced and fair formula. We cannot build a strong economy on unstable communities, and I want it to be clear that this is kicking the can down another year, but in this time, we are already seeing about 300,000 folks lose their Medi-Cal benefits in LA County already. Folks are very confused about their food benefits, and when you take food and you take healthcare away, those are the things that are rights.

Those are the things that make us human in terms of our safety net and our care for one another, and when we take those things away, it creates a level of desperation that causes a very serious ripple effect. And I wanna say South Central has been a testing ground for these kinds of dramatic shifts in our economy and dramatic cuts to our safety net, and that desperation turns into an unsafe situation for families, for neighboring communities, for our entire state.

So we know this is a step, but a step is not enough. We need a system, a system where we can share responsibility and share prosperity, and for me, I think Fair Share is how we're going to do it. I will be fully supporting this bill and will continue to work and hope that the Senate will work--both sides of the aisle--because this issue of Fair Share is one that is understood and supported by Republicans and Democrats and Independents alike in terms of what the data is showing us.

And certainly, we don't want California to be the outlier as New Jersey and Colorado, and other states--Maryland--are moving forward with these initiatives in this budget year to deal with the HR 1. So I wanna support that. I want to ask one question on the item, and forgive me. Where is this item? On the delaying of resources on AB 163--I'm sorry--AB 164, I'm curious. Do we have a sense of what will happen to these populations who stand to lose their benefits on January 1, 2027? Do we have a sense of what recourse will they have in terms of their access to care? And do we have a number of how many families will be impacted by these new rules to drop services for these populations?

Okay, and that's for moving the unsatisfactory immigration-- those with an unsatisfactory immigration status to fee-for-service? Okay.

Thank you, senators. Malakueva. So, oh, sorry. Megan Spa, Department of Finance. So, in terms of of the transition, the budget in or the bill includes 39,000,000, for care coordination services, and and this will provide for a contract to facilitate, things like an advice nurse line, and and resources to stand up, coordination of care for these individuals as they transition to the fee for service, delivery system.

And and I just Sorry.

I just would like to point out that that 39,000,000 is is on top of what was we discussed at the two party plan. After having further discussions with legislature in terms of their concerns, we worked with the department in order to create, a pathway so that we could have, coordination better coordination of care. So I just wanna point that out that that was in response to some of the concerns that were raised at the two party plan. Okay.

And fee for service, those families that can't afford that system and process or who are and are acutely ill, where will they go to get their care?

So, if I'm understanding your question correctly, the individuals who currently qualify in the system under managed care, they'll they'll still qualify under fee for service. As as it is now. They're just transitioning to a different delivery system.

And under that system, how how is is the care covered by the state of California?

So in the fee for service delivery system, unlike managed care, there's no longer a a plan, that that facilitates payments to providers. The, payments are provided directly through the, what we call the fee for service system by the state. So there's not that that in between of a plan.

Okay. And is there a sense of what's the total number that we're shifting over? I understand the population, but can you give me a sense of the numbers of individuals?

Sure. I think yeah. I think approximately 2,000,000 individuals will transition to fee for service who, currently are,

considered individuals with unsatisfactory immigration status. Okay. Another question I have. So, if a constituent of mine is undocumented in Southeast Los Angeles And is not in any of these existing buckets in terms of fee for service, in terms of, you know, currently enrolled. Where would they go to get care under this new system?

And I want to clarify because we've gone through so many different changes, and shifts over time. I just want to make sure I'm understanding where they will go for care under this new funding rubric.

If that individual is currently a Medi Cal member, they will continue receiving services through Medi Cal providers who also provide for, fee for service. And and perhaps it's helpful to also mention that, with a preliminary analysis that looks at six months of data, the Department of Health Care Services found that approximately 79% of, managed care providers who serve the, we call them UIS individuals with unsatisfactory immigration status, who serve UIS members are currently, fee for service providers.

79%. Correct. And so the remaining percent, where where where what safety net or system do they fall into?

So the 79% is providers. So 79% of managed care providers are also fee for service providers.

Got it.

So I guess I'm trying to under Okay. I'm sorry. We're talking about the providers. I'm trying to understand where do the individuals, where are those individuals able to go for care under the new funding systems. Sorry, I'm trying to

It's okay. It's okay.

So are you asking about if someone is currently a Medi Cal member? No. If they're not a Medi Cal member. So if they're not a Medi Cal member, then then they would fall into a category of individuals who who would not receive fee for service care. They they need to be a Medi Cal member to receive care.

Senator Smallwood Cuevas, if you would hold that thought, a quorum walked in the room. And I'm gonna ask for a call of the role.

Senators Laird.

Nilo. Here. Archuleta?

Here.

Here. Banksphere? Here.

Cabaldon? Choi? Durazo?

Here.

Grove? Here. Hurtado? McNerney? Menjivar?

Ochoa Bogue? Perez? Reyes? Here. Richardson.

Here. Seardo. Smallwood Cuevas. Present. Weber Pearson.

Here. We have a quorum. Thank you very much. Let me go back to Senator Smallwood Cuevas.

Yeah. I'm I'm I guess what I'm getting at and I'm I wanna just clarify the the different buckets of resources. And it sounds what we're saying is there is a percentage of folks who are not enrolled who will not have care. And ultimately, if they become ill, acutely ill, they will need to seek care. And that care will likely be at a neighborhood emergency room.

Correct. Okay. The other, the other question that I had is is there is there a because that's 1 group of folks who are gonna be coming to the emergency room as we are just finalizing where these different buckets of resources are today. The other group I'm concerned about are those workers who are, working families who are required to meet these arduous eligibility requirements under the new HR 1 system.

One of the things, raised was that, as we're trying to create a way to streamline the eligibility process, we're also investing in eligibility workers on the ground to support those workers.

My question is, is there and my question earlier in in the in the process, just trying to clarify if there are resources put toward this, is there a investment in workforce training programs or employment opportunity that would help our working families who may fall in and out of employment in the midst of their being eligible for benefits.

Or maybe there's just a timing issue in terms of they have a job, but it's not on the record yet, and their eligibility, review process is is is is pending. What is there a way that we or is there investment in some program that could help hold folks in that temporary training opportunity that would allow them to qualify and meet the eligibility requirements.

The reason I ask this question is there are some communities as as you know in parts of my district, particularly in the black sections communities of of South LA, we are seeing unemployment rates now of about 12%, which is far into recessionary levels. There is, the the the the impact of of the Federal Government on our business community has created a chilling effect for the hiring of workers, particularly at the entry level.

That's also documented. And so my question is, given these economic workplace forces, what is the safety net to ensure that we continue to, support the ability for workers to document that, the the challenging opportunity that we have right now, for consistent employment through this arduous eligibility process is is is resources devoted to ensuring that there are safety net workforce programs to help us increase eligibility.

I I can't speak to workforce programs, but, I do wanna mention that the bill does include 197,000,000 general fund. 32,000,000 of which is a cost of doing business adjustment for county eligibility workers to to, to to process workload associated with HR 1, and that includes the working community engagement requirements that you're you're speaking about. No.

I I'm appreciating that, and I think that we need we need both and, and I I I do agree that, we need the the greater capacity for our eligibility workers. But at the same time, the employment situation is so tenuous. And I think investing in our workforce system to be able to support both county and our, state workers, would be incredibly important as we look at, what is happening particularly for vulnerable populations with barriers to employment and in this, economic reality.

I know we have to vote, Mister Chair, on this bill, but I'm saying there are I know more opportunities to work these things through. I'm very concerned about those populations that have challenges around employment sustainability, And I think that this is something that we have to continue to watch and account for moving forward.

And why fair share is so important. Why fair share is so important. We need more resources in the system to be able to to protect all of our workers and particularly all of the challenges that they face in this poem moment in time.

I I would just add that we will continue to monitor what's happening on the ground and a lot of, things are changing even real time, in regards to HR 1. The changes in what we anticipated would be case load drops have changed since January, have changed since even May revision. And so I think some of what we've added in is is to help support counties and the state as we transition HR 1.

But we obviously will be looking to see what else might might be required or changed in the future.

Does that complete your questions? Thank you very much. We'll go to Senator Durazo and Senator Richardson is on deck. Thanks.

Thank you Mister Chair. And I appreciate the comments just made by my colleague. This is an agreement we have and I'm voting for it. But passage does not mean resolution. We delayed cuts to immigrant health coverage, dental and clinic payments until July 2027, we did not reject them.

We kept work requirements for immigrants who will be frozen out of healthcare if they cannot prove their employment status. We started a process on fair share and that's a good next step. But we will not collect a single dollar from corporations that are already shifting or have shifted their employees onto Medi Cal. Another cycle of large corporations paying nothing while their underpaid workers stay on Medi Cal, and we foot the bill as taxpayers. This is a budget that bought time.

Medical delayed, not resolved, not restored. Nothing in AB 111 creates a restoration mechanism. However, I am grateful, very grateful to our budget committee staff. I know you have worked tirelessly in these impossible conditions. I am grateful for eight years of working with you through a pandemic and economic crisis, through the creation in fact of new life changing programs.

We've heard hundreds of hours of budget hearings where we heard policy experts and we heard from the working poor about the billions of dollars in wage theft that they have to go through and the impact on their families. We heard from garment workers and farm workers and truck drivers all coming forward talking to us about what they're going through on the ground. What it means and what it means to our economy. Why we should all care and the impact on their families. You are so smart.

You are so committed. You are so caring. I'm proud to have worked with you and and feel that from you. Your work is changing the lives of so many and I'm truly grateful to you. Thank you to my colleagues for your thoughtfulness and care.

I look forward to working with you in my next capacity. I know California will continue to weather this storm of human cruelty coming from the Trump administration. I know California will weather the fiscal harm and we will come out stronger. But let's not forget for any moment, for any time, forget the working families who build our economy every single day. And I appreciate thank you for giving me some time, Mister Chair.

Thank you. We're going to move on to Senator Richardson and Senator Blake Spears on deck.

Thank you Mister chairman. Let me first start off my comments really for the public to say that, how grateful I've been to have been a part of this process. This is my second year, being or yeah. My second year, being Chair of budgets of five. And, I can definitely say that this year, there was inclusion, there was transparency, and frankly, there was also accountability, on us to make sure that we were doing the right things for Californians.

So I want to applaud, PT, Pro Tem Limon, and our Chair, Laird, for really working, from day one to craft, something that I'm gonna share with you just some highlights that I think are monumental. Second, I want to build on, Senator Durazo's comments. I don't think staff get enough credit. I was a staff member for ten years. So I can speak to the fact that, what you see us doing up here is only a glimpse of what they've been doing for quite some time.

And that includes the Department of Finance, LAO and our, staff that we've had. The team that I've had of Nora, Eunice, and Diego have been just, amazing. But I'm sure all the staff more recently, I've worked a little more with Scott and Alyssa and also Chris Woods. But, you guys have been extremely responsive, available twenty four seven And we certainly would not be at this point without you. So I think we would be remiss without, saying thank you.

In terms of accountability and responsibility of what I reference, Chairman Laird, I think it should not go unnoticed that we have now doubled, our commitment to reserves from 10% to 20%. That is not an easy feat for a state that has tremendous needs. So for this legislature to take the responsibility and say that we realize our, economy is volatile. We realize that there are tremendous challenges. But in light of that, we know that we also must be fiscally responsible.

And so, I want to applaud from the LAO to Department of Finance to our Chair for just really hitting a home run of getting us to that point. With that, I'm just going to focus on three sections of all of the bills and the trailer bills, and I will go in order. AB 164 of health, that has to do with, distressed hospitals and public hospitals. I just want to, go on the record for a couple points, and I may have a few questions.

Number one, the current distressed hospital loan program, that has been explained to me by staff.

Currently that hospitals that sought, money for that have the ability to one, request a forbearance, which is an extension of twelve months to make payment. And two, to begin to ask for forgiveness of those payments. What I want to clarify for the record, because it hasn't always been, clear and, I just want to make sure people understand that hospitals have to ask annually for that forgiveness. That's not just a you get a forbearance for twelve months and then you can request forgiveness. No.

They're having to do it annually. And I learned that this morning at 08:00. So what I'd like for us to consider from now until we go into August of doing possibly, junior trailers and other discussions that we might have, is that we would consider a couple things. One, consider that hospitals not have to do this annually. If they're clearly a distressed hospital, they were a distressed hospital before and they're still a distressed hospital now.

Why are we adding to this continual reporting and time and all of that? The other issue of having it on their books annually is that impacts them financially. So if we know ultimately by 2030, we are going to allow a forgiveness, I think it should seriously be considered to do it now. Because that would clear their books. It gives them the ability to do financing of important equipment and other things.

The second thing is I wanted to make sure that by participating in the first current distressed hospital loan program, which is also I think called DISH, that that would not hinder those same hospitals from then applying for the new program that is before us today. So I just wanna make sure for the record, it's my understanding that's the case.

But I just wanna make sure that hospitals then that have an outstanding loan, under the current program, that that would not hinder their application and potential award for the new program. And so I'll pause for confirmation on that.

Good morning. Sunil Patel with the Department of Finance. Yes. Senator Richardson. It is correct.

So long as they meet the other eligibility criteria, there would not be anything prohibiting them in current statute from applying for, the new grant program and also being a recipient of other, funding.

Okay. Perfect. Thank you. And then my second part has to do with the assemblies portion of the public hospitals. I'd like to respectfully request that we work on the definition going forward of public hospitals.

And what I mean by that is, as I've reviewed the current program, public hospitals are hospitals that are funded, by the county. In many cases, they have university affiliations. And they're obviously serving the public. What's interesting is a major hospital that's serving all of Los Angeles is not considered a public hospital. And the reason, as I've been delving into this, Mr.

Chairman, is that back in 2018 when, the hospital that I'm referring to was closed, CMS refused to give them a new license if they continued under county management. Because frankly, there were very serious issues that were well publicized on the news and so on. So they were not afforded to be in that quote, just only called public hospital, but they are called a private non profit hospital.

And so, I would respectfully request that between now and August when we return, that we really look at that definition and potentially consider public and private non profit hospitals that are serving more than 80% of, you know, medical patients that clearly would meet every other category except for the fact that they are not governed by the county. And it's my understanding, that this was a requirement of CMS, that they could not be governed by the county.

And so they certainly should not be penalized when they are more than exceeding all of the other hospitals. Patients, the most patients in the entire state of California. Public patients. The highest hospital that, is receiving, the lowest reimbursement from government and I'm sorry. Has the highest amount of medical, Medicaid patients, and yet the lowest amount of private insurance coming in.

So I would just respectfully request and hope to work with you all to seriously look at that definition to make sure that we are not unintentionally missing the mark on a major, hospital that should qualify for all intensive purposes under the public, section as well. That's, I'm assuming we're open to that. I'm getting some nods and smiles. So I I think we're good. The second bill I'd like to talk about is AB 169 of transportation.

And on that one, I want to commend, staff, the chairman again, and PT Lamone, for their extensive work in getting some really good points, to protect Californians such as number d, under one d that requires annual reporting to the legislature. E, that requires DMV to adopt and maintain a monitoring plan. J, that requires DMV to notify the legislature at least thirty days in advance.

And the one I would like to highlight that maybe should be considered, and that is k, which requires the state auditor to conduct an audit of DMV's compliance with these requirements no later than 01/01/2030. That date seems a little far out to me given the vulnerability of what we have of the data.

And for that, I just want to make note for the record, I have two questions, that I think the public needs to make sure that they understand. One, upon us approving this and participating in this program, the full data of commercial and non commercial drivers would be provided, to this organization. So it's not like some people have described it that, oh, California DMV, we still hold the information. And as individual requests are made, then information is provided. And it's my understanding that's not the case.

We will be providing, and people need to understand this, the full data set, name, date of birth, social security number, and so on, at the point of the implementation of this program. So could you first of all, please confirm that the DMV will be providing AAMVA, the full tranche of data.

Good morning. Eamon Albin, Department of Finance. And yes, I said, once the DMV initiates the system, there will be a check against all other states for duplicate records. And so there will be a transfer of data initially. Yes.

Okay. So that's very important that we all understand. And then the second piece is, I didn't understand this in the hearing as clearly as I do now. But it's also my understanding that the full social security number of non commercial drivers is provided. The I'm sorry, of commercial drivers.

Five digits are provided of non commercial, but ultimately, the remaining social security numbers, could be provided of the non commercial.

Eamon, that one once again, that's correct. Yes. The initial ping of the system is against five digits and if there's a match, we do provide the full vehicle record which would include the social security number.

Okay. And so for that reason is why these protections are so important and why I also think we should hopefully consider, that this 2030 of doing the audit, that one particularly stands out to me. That should potentially be a shorter time frame given our vulnerability of having the data out there. The third and last, bill that I'd like to talk about, has to do with the courts. And that bill number

is 174.

174. Yes. Thank you, Mr. Chairman. For that one, I would just like to make three points.

One, and this is something you and I spoke about, Mr. Chairman. Some of the reports, for regarding courthouse construction, courthouse deferred maintenance, and judgeships are older reports. Some of them dating back to 2018, 2022. And given the substantial investment that we're gonna be making, I really do believe the language should include, and I'm willing to work with you and the third party, the speaker, as well as Department of Finance.

But I really think we would be amiss not to include something to ask for some revision, update, something to be allocating this kind of money. And now I'm talking about, for example, with the construction. When you're talking about almost $2,000,000,000 and then to make the investment in judgeships as well without making sure that the most current information is available before we make these investments, I think would be, a dereliction of duty, frankly, on our part. Because courthouses have changed.

What was a courthouse, for example, in my district maybe in 2018, is very different today, almost ten years later in 2026, where we've had flooding, repeated flooding, many, many issues.

And so, I would respectfully request between now and August, that we continue to have those discussions about whether language could include some sort of update, revision of formulas, and so on. And then, the second piece has to do with, the updated language specific, to the courthouse's judges and, courthouse construction judges and, maintenance. It should include, if we were to do an updated or revised report, it should include an update of the current status of the facilities, the current courthouse workloads, and the current populations served.

All of that is important because what may have been a busy courthouse, we all know populations have moved throughout the state of California. So what might have been a very busy courthouse ten years ago may now be not as busy.

And courthouses that maybe weren't busy now are. And so the importance to update that information is clear. And then my third and final point is that, I hope that the third party group, meaning the administration, the chairman, and the speaker would consider language to include, contracted, construction project management, prior to work being done. Now, when I say contracted, construction project management, I mean, of course, in line with P L A's and all requirements of, labor, forces.

But this is something, Mister chairman, you and I have also talked about that the current capacity of the courts department to do effective prior to doing all of this construction, to be able to properly do timely, construction project management to make sure we could maximize the funds in a timely fashion, not taking two or three years to do project management and then finally get to do construction.

That I would strongly suggest we engage a party that is authorized with the state following state labor requirements, to assist us in doing this project management, quick revisions, and so on, that we're properly, maximizing and putting the dollars where they should be. So with that, those are my comments. Again, I appreciate the work of everyone. Don't take my comments as complaints. They're making things better, which is what all of our role is.

But everyone has really done a yeoman's job, I would say. And, I feel very fortunate to have been a part of this process. Thank you.

Thank you very much. We're gonna go to Senator Grove next and then Senator Blake Spear on deck.

Thank you. I wanna echo my colleague's comments about thanking staff. Our staff, got all this information piled on them Friday night or Friday afternoon and they worked, over the weekend probably forty, fifty hours just on one weekend to make sure that we got the information that we were provided to see what you guys have been working on for all these months. I do have some questions and I'm gonna just start, I guess, with the AB and SB 111.

I do, and I'll just try to get responses.

The budget continues to spend unsustainable at record high levels. They're projected to leave operating deficits in the range of 8 to $10,000,000,000 annually. And I know that my colleagues brag that they've reduced the ongoing deficits. I'd like to see where that money's coming even when the nonpartisan LAO office has said and pointed out that increases, in recent years are not sustainable.

So can the LAO back up that comment or is that do you think the increased spending that we've got when we've gone from a total, again, $251,000,000 general fund, $352,000,000,000 state funds, federal funds.

So a total of $3,039,000,000,000 dollars in total dollars for the budget. And just four years ago or two years

ago, it was 320,000,000,000.

Do you think this fund the spending that we have in the state is sustainable?

Ross Brown with the LAO. Yeah. So this is an issue that we've been highlighting for the last year or two where over the last several years, the, state's budget has gotten out of balance in terms of the expenditures and the revenue structure. And so earlier in this year, those estimates of sort of that structural imbalance was in the 20 to $30,000,000,000 range. This budget package here, the estimates from the Department of Finance are that it would shrink it to, a little less than 10,000,000,000.

I think it's about 8,000,000,000 in sort of structural deficits. Some of that is due to Annually. Program annually. Excuse me.

Yes. Going forward.

Correct.

Okay.

Some of that is due to some of the spending reductions that were proposed in the May revision and the package here adopts those with some delays and some changes as well as some of the revenue increases that were adopted as part of the bills that were adopted last last week, I believe.

So I guess my question is that the LA's office, how come nobody's listening to you if I mean, I'm just how come nobody's listening to you? You are the legislative analyst office. You're independent. And you are saying that California's gonna have a 8 to $10,000,000,000 billion with a b deficit every year and the spending is not sustainable.

It's a very ethereal question to ask why people aren't listening to him.

Can I just add, Senator? Okay. Thank you for the question. I appreciate that you are highlighting something that I think we evolve, both the LAO as well as the Department of Finance administration has been highlighting for over a year now as I think the the word we've been using is persistent.

A persistent, structural deficit. So we solved for the budget year as well as budget year plus one. That's the short term. But we also recognize that our revenue growth was not keeping up with our expenditure growth, and expenditure growth is far exceeding that. And so last year, this body and the the governor made very tough decisions and reduced ongoing spending by $12,000,000,000 in last year's budget.

This year, we wanted to address the structural deficits in the out year. And I would say one thing, two things. One thing is we did listen to the LAO because at the governor's budget, we were over 20,000,000,000 in deficit in the budget year February. So the out years. As part of the May revision, we offered both revenue, proposals as well as solutions for reductions in programs, to shrink that by more than half.

And as well as a two party plan, they did something similar. Or the legislature's plan included but included 5,000,000,000 in extra revenue that we didn't anticipate coming in. So as part of the three party agreement, that 5,000,000,000 is no longer there because we don't anticipate at this point that that we should depend on those revenues. But we still address the ongoing structural deficit. And as my, colleague said, that 26,000,000,000 that was in 2728 is now 10,500,000,000.

So more than half negative. And then the 22,000,000,000 and 23,000,000,000 deficits in 2829 have shrunk to almost a little over 8,000,000,000. So while we couldn't eradicate it completely, we have addressed it I think significantly. Both by increasing revenues and, which we discussed last week. As well as some of the difficult decisions that this body has made in, in terms of reducing programs.

Even with delaying them, but still counting some of the the the reduction in general fund costs. So I would say that we did listen. In fact, I don't know if it was so much a listen as we agreed that something had to be done. And the legislature, this administration, is doing a difficult task of making that happen through this budget.

Thank you. There's been a lot of talk about president Trump and HR 1. It came come what came from the Federal Government. So HR 1, did not allow California to use any taxpayer resources to fund undocumented immigrants, medical unless they were in emergency room or pregnancy.

Correct? That's correct. Okay. So I noticed that you scored a savings on health for 471, excuse me, $471,600,000 in general fund savings. And it says for unsatisfactory immigration status.

So did the Federal Government force you guys to save $471,000,000 in taxpayer money for Californians?

I think what that is, is a sort of realization that some of the new requirements would likely restrict, caseload. So that there would be a fall off of individuals that are currently receiving, health care would not be eligible or would have difficulty reenrolling. And so this is just sort of eyes wide open, understanding that that case load would be reduced. And as a result, the cost on the state would be reduced.

We are trying to mitigate some of that as discussed earlier by, providing some additional funding to assist counties.

So administrative county administration funding to help mitigate some of that. But I think the reality is that there will be more, people that are knocked off roles and are we're able to help maintain their in insurance.

And that's because we're switching them from managed care to fee for service?

No. I think it's largely because some of the work requirements that are involved. The shift from managed care to fee for service is as a result of the requirement, as you mentioned, for HR 1, and what the Federal Government will allow, won't allow. But some of a lot of the savings, as you noted, are going to become from the reduced roles.

The reduced roles. So there's no reduction in you don't see a reduction in any way, shape, or form of going from managed care to fee for service.

I will let my colleague speak a little bit more about the system. She's much more expert at that than I am.

Hi. Meg, it's department of finance. So there there is a savings, associated with the shift to fee for service. It's it's about 506,000,000.

506,000,000? General fund? And the explanation for that is that managed care right now will take somebody with unsatisfactory immigration status and undocumented individual. And they will say the person comes in for cancer or some type of treatment that they need. And, that managed care system will go, I will get you in with this cancer doctor, this whatever doctor, cardio doctor, doesn't matter, whatever the situation is.

But now that individual that is looking for treatment will have to go online, find their own doctor, make sure it accepts Medi Cal. So there's no like facilitator, I guess. And most people will drop off that situation for, I don't know, any number of reasons. Language barriers, no education out there, not them being educated, but no, like, how do we go and get our own doctor and all of those things. Is that part of it?

Okay. So there's a few points to address and I'll try to address them in order and if I miss anything.

No. It's okay. I'm just trying to understand it.

So the the savings assumed is associated with a few things. One is that, currently, in the managed care delivery system, plans receive a capitation rate. Right. So with fewer members, the capitation goes down. It does the the savings does also assume decreased utilization.

So that is correct. And then, your point about the process of someone finding care in the fee for service delivery system, that gets back to that 39,000,000, that we talked about a little bit earlier. So that's funding for the Department of Healthcare Services to prop up care coordination and that includes a provider directory, nurse advice line, to try and create, systems and supports for these individuals as they transition.

Okay. Thank you for that. I also noticed that, I wanna go back to the front, I believe. So, this budget, on, AB 111 includes about $200,000,000 in, like, handouts. It also has an unsustainable record high of, projected operating cost, which I just talked about.

And then, it provides, up to a 140,000,000, but only 90,000,000 guaranteed for financially distressed hospitals. So my question is is that we've been working on the financially distressed hospital system for at least four years with Senator Caballero, when she started it. And, we did an emergency allocation a few years ago, forget the budget year, where they could apply for it. Thank you for getting my hospital in Rich Crest $5,000,000 or they still wouldn't be here today.

And also, Cahuilla Health in the Central Valley where Fresno and after Madera closed, Cahuilla and Fresno were taking an abundant amount of patients because there wasn't a hospital up north of them.

So I appreciate that. But my concern is that on the financially distressed hospital, situation, just a month ago, I sat with the budget Chair and we allocated $25,000,000 in emergency, money that, seven hospitals were about gonna close. They had, what, thirty, ten days worth of cash left. Was it ten or thirty? Yeah.

Ten days worth of cash left. And we allocated them $25,000,000. They requested a $100,000,000 to stay afloat. And I know we've been sending them more money as they go forward. We just recently had a committee hearing where we had Martin Luther King Hospital in here, not being able to be sustainable on drop offs and things like that because of the low again, it's because of the reimbursement rate.

We keep putting band aids on it. We see raise medical reimbursement rates. It'll solve it. They'll treat people and there won't be a lack of, funding. But my question is is that the seven applicant hospitals for the emergency ten day notice were, requested more than a $100,000,000 worth of money to be able to stay afloat.

And yet, this budget decreases the amount that was committed to them from a 140,000,000 down to 90,000,000 on the total state budget. How is that gonna help our constituents maintain, adequate health care, and keep our hospitals open? Or do you guys have a plan to give them another 100,000,000 in a couple of months and we're just gonna do that every few months, like in August and then back in January?

Guadalupe Manriquez with the Department of Finance. So the the final budget includes, as you noted, 90,000,000 for the distressed hospitals.

The budget also allows for an augmentation of 50,000,000. So as you noted, one of the data points to inform this number was for the current year grant program for immediately distressed hospitals. Hospital submitted request for a 123,000,000. So as we have more data, this budget also establishes the hospital stability unit who will be providing technical assistance to hospitals who are in distress.

So, as we, as the Department of Healthcare acts as an information, develops the program design, and evaluates, you know, what what what we're hearing in the field.

We do have the ability to augment by 50,000,000 more, next in the next fiscal year.

So I just wanna make it clear to the public that we gave we're securing, $90,000,000 for all hospitals across the state of California. Even they're financially distressed hospitals. And we know of at least 22 of them. K?

Seven of them are on the brink of bankruptcy closing because of the ten day running out of cash thing, not being able to pay employees. We're giving all of them $90,000,000. And that's all available online where the people can have access to what hospital gets what. And basically, I think the hospitals have to report to the state government about how they spend that money. Correct?

Yes.

That's correct.

Submit, information, on the the how they're gonna spend the grant funds. Got it. Yes. It is all public, so people know where that their taxpayer dollars are going. And they can be assured that it's going to health care to make sure that they still have a hospital to go to when needed.

It's to ensure that the hospital stays open and continues to serve. And again, it's $90,000,000 In the final budget, yes. 90,000,000 with the authority to augment 50,000,000 more.

Let me move over to the parenthood allocation for $90,000,000. So there's a $90,000,000 allocation equal to financially distressed hospital.

But that has some type of, that has some type of, language in it. SB 106 language that was adopted. And it actually says, that that where that money goes is not available to the public records act. Why is planned parenthood's $90,000,000 not available to the public records act? And I think every well, other than the annex, that's not available either.

But every other government entity has to have it available. What's the purpose of that? Yep. So that is due to the sensitivity of the information and the patient data related to reproductive health care. The rationale for that 90,000,000 as you recall is because we HR 1 prohibits prohibits entities such as Planned Parenthood from claiming federal dollars.

And so, given the sensitivity of the data that was included in that language, So you're saying that it when the Federal Government said no more federal dollars to fund abortion taxpayer dollars to fund abortion, We backfilled you guys, backfilled with the budget proposal is to backfill Planned Parenthood's loss. And you said it's sensitive information. Somebody going for cardiac, whatever happens in the hospital. I mean, I ended up there last Thursday. So all of that is sensitive information or not sensitive information.

And there are protections like HIPAA for Yeah. HIPAA information. The same with Planned Parenthood under HIPAA too. Correct? Not asking for patient information.

I am going to, call, deputy director Scott Christman to help me with, this response. No. Absolutely.

I'm asking where Planned Parenthood spends their money. Why is that confidential?

Sorry. Sorry. So I guess this is my question I'm trying to get to. Is it agencies that get money from the state government, we require some type of public disclosure. I'm not asking for patients that go in and use services from planned parenthood.

I'm not asking for a patient list. I'm asking where how come we as the public doesn't know where planned parenthood sends that money?

So I just want Scott Crispin Sure. HCAI. So I just want to clarify. On the distressed hospital loan program.

Yes, sir.

We don't actually publish the turnaround plans. They are privy to public records act request.

Yes.

So the distinction on the planned parenthood, I think there's transparency that the funds are going to planned parenthood. There's not specific transparency or or not released to public records.

So there's no public records act request to see where that money, that $90,000,000 goes to I mean, to planned parenthood. No one is allowed to know that.

Well, correct. Well, the fact that it's going to Planned Parenthood is known. The assumption is it's used to backfill services that aren't being funded by the Federal Government.

I know that's the assumption that you're saying. I'm just I just want you to make it clear that the public has no availability for a public records act for ninety million dollars going to Planned Parenthood.

That's all I'm

That's how the that's all I needed.

That's correct.

Thank you.

Thank you. Appreciate that.

Certainly.

Okay. And then, going to just a few things that are on here. You know, I it's $12,000,000 to Jennifer in performing arts. It is also $5,000,000. And these are, like, small things, like, you know, for the California men's service challenge.

What is that? Like, what are these things? All these things add up to roughly almost a billion dollars, $1,400,000 for Cal export for newly named international trade export promotion program. I mean, all of this money when we're trying to save money, I was just curious about and again, it's just five pages of, you know, $500,000 Orange County United Way, which that's common. You you would see that.

I know what that is. But there are a lot of things in here that go to, the general fund or come from the general fund that aren't, they're strange to me. So who picks those things? Hi.

Good morning. Justin Needleman.

So just wanna note that a lot of these were in the two party plan that Okay. And, there was a bigger bucket as well for general fund expenditures that has been significantly reduced in this three party act. So I just wanna note that and also acknowledge that there are, several small, generally small, general fund allocations to various entities. Again, many of which were a part of the the two party.

Okay. No. I got it. Thank you. So and then, again, just to reflect that $471,600,000 savings of, reflected that we just talked about for medical for those individuals who are either gonna fall off or can't get medical or whatever.

And you said there were other programs out there like the county services, you know, propping up some dollars for them. So how much of that or if roughly $471,600,000 and you're offsetting some of that loss, how much of that is gonna go towards, like the county services that you mentioned earlier? And it doesn't have to be an exact number. Just be sure.

And I just wanna say that a lot of the savings that you're seeing across our solutions are going to help the the budget, the baseline budget. So we needed those savings because we were we were coming in again, higher expenditures than revenues. The 39,000,000 that you're referencing is something that was newly added since the two party, legislative agreement. Acknowledging that we wanna do the most we can to keep people from falling off and to keep them on.

And so there isn't necessarily it's it's an additional cost to that savings.

So it's, again, a a lot of the the savings, the revenue generation was, part of the overall budget framework in order to get us to a positive state fund for economic uncertainty in both budget year, as well as budget year plus one. Okay.

And so that makes sense when you said that it reflects part of the savings, but then we have expenses to offset some of those savings. So like, it reflects a cost of $303,200,000 for delay in transition transition for the population. So the you scored the $471,600,000 savings, but we're gonna spend 303,200,000 to delay the transition that is caused by, HR 1. Right.

So there there are a lot of solutions

Okay.

In the budget, that together with the revenues, give us that positive SFU. There are also, negotiations with the legislature to put off some of the the start dates for some of the solutions because that was an important priority for for the legislature. It was not part of our May revision necessarily, but we came to negotiation as we always do with, the final budget. And so in totality, the the savings, the revenue generation is offset some by some of these additional costs.

But again, as we discussed earlier, the overall reduction is both in budget year budget year plus one, as well as in the out years.

Okay. So, I'm gonna go to the, developmental services, AB 163. There's a lot of changes to the competency requirements for the regional center governing boards. And then there's also, a structure that, for contract code exemptions and then, some other issues. I guess my question is is that I was here in the Assembly when we shut down the developmental centers where we just basically, when I went and visited Sonoma and Fairview, it made me sick to my stomach.

You know, they what they have sixteen deaths. They had, injuries, broken arms. There was a history of abuse in these facilities. People described what they said was dummy slipping slide. Like, they would soap up the hallways and throw people down the hallways.

Like, staff, it really I mean, it's there's articles about it out there. So we had I worked with Holly Mitchell. And we actually closed down those facilities and we used that funding, the savings in those facilities to fund community care. And so individuals weren't just warehouse. They got to be in the community.

And maybe they required a twenty four hour friend so they didn't run out in the middle of the highway or whatever the case may be. But it was less expensive and it saved the state a significant amount of money.

And now it looks like you guys, this three party deal between the governor, the speaker, and the pro tem, it looks like to me that what they have done is they're trying to dismantle the community organization that takes care of our IDD and most vulnerable members of our society. So I have a huge concern with that.

We're reducing the dollars that go to them and we're restructuring their board to where individuals with IDD, with individual intellectual disabilities, there is a member of that population that sits on some of these governing boards so that they have a real life experience input.

And that's not gonna be allowed under the new current structure. And then, I realize that you know, it says in the positive things, you know, regional centers must have some type of state oversight. We don't oversee our hospice programs. There's rampant fraud there. We don't oversee.

And there has been no evidence of fraud in our IDD communities. And as a matter of fact, because of the wage increases that are calculated and the decrease in funding for these organizations, they are really struggling to deliver services to the individuals who really need them. Whether it's daycare, whether it's, where it's classes, where there's an opportunity for a work program so they have an opportunity to work, and match wages. So I have huge concerns of that.

You wanna tell me why you cut IDD funding and not high speed rail funding?

Just for an example. It doesn't have to be that exact comparison.

Omar Sanchez, Department of Finance.

Thank you.

I will know on this one. So for the Department of Developmental Services, what you're referencing in regards to the regional center oversight is not cutting resources for the developmental services, but it's to improve transparency and oversight of the resources that flow to the regional center governing boards and to the regional centers.

So the intent behind the proposal, is really to do a few things, to and and please let me know if this is what you're referencing, but to to professionalize the board, and and really equip the board to oversee the resources and the functions of the regional center, to do that in a way that, really focuses on the, you know, just the resource allocation and the way that the regional center is actually functioning.

In addition to that, it also requires that the board so you mentioned the layout of the regional center board and how that function layout works. It adds board member, professionalization and also experience that's needed as part of the board to really as part of the professionalization to, make sure that the folks that are working on the boards, who are participating part of the boards, are equipped with those skill sets needed.

So you're you're saying there's no cuts to DDS in the budget?

This is maintaining the the budget hole. Yes. For the department of developmental services.

And you're saying there's no cuts?

That's correct. For the Department of Developmental Services.

Okay. I'm gonna check you on that as soon as I pull up this number. As soon as I find it. But I'm gonna move on to something else. I don't even wanna go over file item eight nine which is the one sixty AB 165.

Our war on seniors is just upsetting in this budget. And I'll probably cry, because I had to, take care of my mom when she was dementia related, the whole bit. And what you guys are doing to these skilled nursing facilities is completely unacceptable. I do have a concern about, Again, I'm just gonna make a comment. You're requiring transparency, which they already provide transparency for developmental services boards, but no transparency under $90,000,000 given to Planned Parenthood.

This bill on file item 12 which is the AB 169, it allows the higher speed rail inspector, to keep certain audits and reviews associated with these materials confidential. Again, no public records act request. Is that true?

This this bill on file item 12 which is the AB 169, it allows the higher speed rail inspector, to keep certain audits and reviews associated with these materials confidential. Again, no public records act request. Is that true?

Oh, hi. Sorry.

I didn't see you coming up. I apologize.

Good morning. Amin Albin, Department of Finance. Yes. For the Inspector General, it allows him to protect certain records that are related to whistleblower complaints and sensitive data while continually reassessing whether or not the need for that confidentiality is required.

And what would be defined as sensitive data? There's no definition. Cost?

It would be specific information that could be compromising either to the individual or as determined by, I believe, the Inspector General. Sorry.

What would be compromising to the Inspector General for the public to know?

I think this is largely to do with whistleblower complaints that are provided directly to the Inspector General. And in order to protect that, that those complaints or those people who complain that would be reporting to the Inspector General. But he's required to particularly publicly articulate the rationale for holding report or a portion of the report confidential and continuously reassess every 120 days whether or not that report or portion of the report should remain confidential.

So just based on what you're what you said like in just like real world. So the two people who got killed or died and were stashed in one of the, the electrical panel boxes underneath the high speed rail in Fresno, like somebody who whistle blowed that would be protected or the people who did it would be protected?

I'm not specifically familiar with that case.

Okay. And what about the sinkhole that's causing one of the bridges to be not stable that's already been built? I mean, it's billions of tons of cement and it's on a sinking valley floor. So there are sinkholes out there and they're trying to desperately try to fix one of the so, is that whistleblower complaint?

No. I do not believe that would be part of this.

Okay. Okay. So just for personal comment, in 2008, a proposition 1A guaranteed the voters that it'd be $9,500,000,000 in bonds. And if we have a high speed train from San Francisco to Los Angeles, it would take two hours and forty minutes. It is now 2026.

The total cost of that bond was, voters were told was $33,000,000,000 to $45,000,000,000 and we would be on that train in 2020. It is in 2026 now. There is no active there's not track laid. There's nothing. I drive by this monstrosity everyday on Monday or Sunday and on my way back on Thursday.

We actually videotape it. You can be it's probably the length of this building. We've spent all these years and a portion of that project is probably the length of the O Street Building. You can walk it and I walked it with a TV camera in like four minutes. It's not a it's not a long walk.

And we continue to to fund billions of dollars into this. And it says that it's gonna be built in 2020 or excuse me, 2033, but that's only Bakersfield to Merced. The voters were lied to and we why do we LAO? I'll ask you. Why do we continue to appropriate money?

Do you recommend this? That we continue to offer money for high speed rail?

I mean, I think our view is excuse me. This is a matter of legislative priorities and of how it would like to allocate its different resources. I think our main message has been, if the legislature wants to proceed kind of moving forward with the project to try to come up with a funding plan because we have you know, there's a gap in sort of the available funds and the funds would be needed.

What's that for the public's awareness? $230,000,000,000?

I'm gonna have to get back to you on on the specific number.

Okay. So I'd be curious about how California's gonna come up with $230,000,000,000 to fund high speed rail. And I'd also be curious about what the position is as the voters were guaranteed or told on the ballot measure. Because it was a pretty classy looking project, but now it's estimated to be the largest, most expensive infrastructure project in the world. So at completion.

And again, completion is only gonna be estimated at 203- excuse me, 2033 from Bakersfield to Merced. I drive it. Even if I was still up here, you if I drove from Bakers if I took it from Bakersfield to Merced, how would I get the rest of the way here to come to work? And what would I do when I got to Merced?

I guess, are my questions. I think you guys should take a tour of this project. I think it'd be very interesting.

So, the last thing I have on, the questions that I have is, I have to find the senior citizens and disabled citizens property tax postponement program.

I met a lady named Hazel. She's homeless.

She's a black lady. She's carrying some shopping carts because I come down 12th Street and it's just a horrific sight down there. She said that her property tax went up so much even after her husband died. She owned her home, but her property taxes were so much she lost everything because taxes went up.

How come we don't let senior citizens in disabled communities and our United States military veterans have property tax exemptions in the State of California?

And what's the purpose of making them? What's the purpose of that? In the State Controller's Office, it says, the State Controller's Officers administers a property stack postponement program. How come we're postponing it in this budget? Hi. Sorry. Bringing you all back.

Mary Halterman, Department of Finance.

Thank you.

So this program is for seniors, blind and disabled homeowners that are deferring their current year property taxes. So we're increasing the cap to allow all of the applications that are in backlog to be processed to allow that this to happen.

Okay. So I misread that. Thank you.

Thank you. I apologize. That's not the way I read that. Thank you. Okay.

That's all I have, Mister Chair. Thank you. And I appreciate you. You know that. You always give me good information.

Thank you.

Thank you very much. I'll just say I still have I've been really respectful. I have not shortened anybody in any way, but we still have public comment and voting to come. So we have Senator Blakespear and Senator Weber Pierson on deck.

Okay. Thank you. Well, thank you. I wanna reiterate the thanks, to the budget Chair and also to the budget subcommittee chairs and also, you for being here today and the work that you put in to getting this all together in the last just several days, which I know is also many weeks and months of work. I was grateful to serve on budgets of two.

So I wanna start with some of the things that are related to that budget sub. And just note that I was happy to see a reappropriation of 14,000,000 for projects consistent with the natural and working lands climate smart strategy. These investments matter because conservation, habitat restoration, public access, and climate resilience are all connected. Healthy lands and waters help communities adapt to climate change, and they are crucial for us, as humans and animals on this planet.

I also appreciate the targeted investments in Point Reyes Invasive Species Prevention and Mojave Desert Tortoise Recovery.

I wish there were a few more things in there. But I also just want to note that I am disappointed that the budget does not include funding for Wildlife Coexistence Program. The human wildlife conflict that we increasingly are seeing throughout the state, it is a statewide issue, and proactive conflict prevention is cheaper, more humane, and more effective than responding only after conflicts escalate. And we can also with education, about how to avoid conflicts between human and wildlife, we could really do so much more in prevention.

But people have to understand not to feed animals and film them, posting them on social media, a lot of different things that we do see happening and that does lead to more conflicts.

So I just wanna make sure to note that. I also want to recognize that I'm grateful that we're continuing the State Parks Library Pass program. There is there was $6,750,000 in the general fund ongoing for that. That is so important for people to access our state parks in California. And then also, there was $17,500,000 for the State Park and Recreation Fund.

Essentially, it sounds like it's related to the reservation system agreement. And I do that's this has been an ongoing problem that people, campsites are sitting empty and that people, the reservation system we had was promoting reserving large numbers of days, only showing up for one of them or none of them, having almost no penalties. And then us, the park system not being able to adequately fill those sites by opening them to the public who might even be in line to get in.

So having this money for the reservation system, I am hopeful that that is going to continue to, work toward improving that. We did talk about this extensively in the budget sub, and it seems like everybody is aware of the problem and working on it.

So I just wanna give voice to the recognition that it's important we continue to do that. Also, the there was no longer the elimination of position sweeps. So that's also a really important thing. And then also, Cap and Invest, it seems has been punted to maybe further negotiation. And I hope that we're able to make sure that the legislature's priorities and some of the important things we funded through Cap and Invest don't all get zeroed out.

So reopening of that negotiation is something that's important. So I look forward to seeing what comes of that and just want to make sure it's noted. So I do have a couple questions, but I'll also continue just making some general statements. I I'm really happy to see $900,000,000, for HAPP around seven. It is really critical that we have resources for local governments who are trying to move people off the streets and into shelter, housing, and services.

I also appreciate that that money money is paired with accountability because taxpayers deserve to know that homeless dollars are being spent effectively and also that governments are making progress. And we really have to continue to focus on outcomes, not just progress being someone was handed a flyer or several dozen meetings were held.

But what is actually happening for people so that they are actually being able to move out of homelessness and stabilize their lives. I, I remain concerned about the lack of predictable funding though. It is really hard for cities and counties to enter into contracts and leases when they don't have any certainty about the ability to fund those programs into the future.

So I wish that we could get on a three or five year funding schedule when it came to HAPP. And I also just wanna recognize that I continue to see a major lack around our both policy and funding for interim housing, which is the level of housing directly up from being homeless and living on the streets. And so the, we don't have money that funds interim housing in the housing bond that we, will be putting in front of the voters.

And, we don't I don't see that also in this funding document. But we know that when people raise their hand and say, I would like a bed inside tonight to stay in, only 1 in 10 is actually able to get one because we just are not providing enough of that.

And that's really starts with the state. I'm also supportive of Orange County's United Way Program Pilot Program, because people do need to know about the opportunities that are available. And I, I'm hopeful that that will help reduce barriers. I wanna talk a little bit about transit. So transit, I strongly support the $300,000,000 that is the Low Sand Corridor Liquidation Extension.

Because this low sand corridor is not just a regional line. It's a critical passenger rail, freight, military, economic corridor for Southern California. And the extension will allow the corridor resiliency work to continue taking place. The planning, permitting, inter agency coordination, and sustained funding. I also support suspending fare box penalty requirements for transit operators.

Ridership patterns have changed, and agencies should not be punished for operating essential services while they recover. But we also need to remember that fare box relief is not the same as transit stabilization. And we are still, really not meaningfully addressing the operating deficits that are going to lead and already are leading to service cuts in transit. And that really undermines our equity goals, our climate goals. And I remain concerned that we're we're doing this short term transit stabilization funding.

But if we want cleaner air, safer mobility, and reliable transit, we have to help our transit agencies to maintain their service levels. And that's not something that, that really we're currently doing in our budget. I wanted to ask a little bit about Prop 36. So when when we have this quote Net Zero Prop 36 shift increase implementation, what what exactly is that doing? What is what is Net Zero Prop 36 shift increase implementation capacity mean?

Good morning. Justin Adelman, Department of Finance. So the AB 109, the two party agreement included $50,000,000 one time for Proposition 36 and that was all allocated in the Judicial Council of the Court's Budget. The Net Zero shift was to disperse that as part of the three party agreement so that $20,000,000 goes to Department of Mental Health Services, $20,000,000 to courts, and then the final $10,000,000 also to courts for their workload.

Okay. Okay. Yes. So we in order for that to be effective, I think we do need to continue to support it. So we've had a $100,000,000 the the first year and now $50,000,000.

You know, there was an ask that was substantially higher than that. And you know, there are a lot of elements to that. But the one that's particularly related to our behavioral health system, you know, that is really important for us to be able to be successful. So I am I wanna continue to advocate for us to support that. I wanted to ask about the care referral and petition pipeline.

So there are a lot of parts of care and I'm just trying to understand what problem is the state addressing with that exact part. Care referral and petition pipeline. Is that meant to address the lack of referrals or incomplete petitions or delays? I mean, care court is really not serving anywhere near the number expected. But so I wanted to understand that.

So the budget includes $3,500,000 one time general fund for public defenders to increase Care Act petitions and referrals, helping to integrate Care Court as a first intervention. It also includes $1,500,000 one time general fund to the California Health and Human Services Agency, to train and support first responders, homeless outreach workers, and street medicine teams to strengthen again that Care Act referral process.

Okay. Okay. It sounds like there's there's a lot put in there. So we'll see where that trickles down to more specifically. Did you have something to add to that?

No? Okay. Care Court is only useful if families and providers and local systems can actually move through it, access it, have it help people.

I was really fortunate to witness Care Court in action and it was helping the people who were able to utilize it. So. people were grateful to be there it was definitely demonstrating that they were receiving care and housing that they wouldn't be otherwise. So helping more people access it in a way that's effective, cost effective is really important.

I also strongly support the $15,000,000 for journalism fellowships. I think journalism is civic, is part of our civic infrastructure. And we communities need reliable fact based reporting to understand what's happening. But we also so, you know, $15,000,000 is a really great investment.

But I just wanna emphasize the continued need for broader civic journalism funding. Because fellowships are really important, but the local news ecosystem needs to have sustained support.

And then the last thing I'll mention with this was mentioned by, I wanna uplift what was said by Senator Richardson about courts and judges and needing to continue to support that and dive into making sure that works because that's really an access to justice issue when we don't have if we have long back delays, for people to be involved in our court system, it's really truly deeply problematic. And then I also wanted to just recognize the distressed hospital funding. I have a hospital.

My district Tri City Medical Center. And financial stability is really critical for our hospitals. So I support the creation of a healthcare access stability unit at HCAI because we need better information before the hospital's on the brink. You know, we took action to help the hospitals that were so close to closing. But I think we need to be looking more at that long term loan forgiveness where it's appropriate.

Because keeping hospitals open should be where we're heading toward, not just delaying our next crisis. So with that, thank you Chair for the opportunity and I'll turn it back to you.

Thank you very much. We're gonna go to Senator Weber Pierson and Senator Gomez Reyes is on deck.

Thank you, Chair. I will be very quick with my comments. I wanna thank, all of the staff that have worked on this, in the legislature but also in the Governor's Office and the LAO. We definitely appreciate all that you've done. It has not been easy.

This is not an easy budget year. Last year was not an easy budget year and I'm sure, unfortunately, our next couple of years won't be easy as well. Wanted to just point out, an issue in, the AB 164 or SB 164 that deals with menopause. I know that there were some amendments from I believe ACOG that were not addressed. And I want you all to, as we're thinking about trailer language in the future, really reconsider that.

So I know one section was Subdivision C3 of Section 1367.252. Where it talks about establish and maintain a policy to provide enrollees who may experience menopause and who are 40 years of age and older. Blah, blah, blah. So, you know, any female with a functional uterus and ovaries may experience menopause and will be very clear that menopause is not hot flashes, irritability, mood changes. That's not what menopause is.

Menopause is when you stop having cycles. Right? Everything before that is called perimenopausal period, and those are symptoms. So any functional female, any female with a functional uterus and ovaries may stop having menses at some point, but not all of them may experience perimenopausal symptoms.

And that's what we're trying to get at with this particular bill and legislation to ensure that we are, counseling and addressing individuals who are at risk for hot flashes, mood changes, sleep disturbances, memory issues.

So if I'm a 40 year old patient and I'm on hormonal therapy, and eventually my Doctor gradually tapers me off, that is very different than a 40 year old who's not on any form of hormones, who has that sudden drop or sudden fluctuation in their hormone levels, therefore having those symptoms.

And so when the recommendation was to change it from may experience menopause to perimenopausal, which is actually what you're trying to get at symptoms, I would strongly recommend that you look at that again.

Additionally, when you look at Subdivision C5 of that same section, It says establish and maintain a policy to contract with providers, just delivering primary care, who are credentialed in menopause. When we had this conversation in committee, I believe last year, it was not about contracting. It was about providing an incentive.

When you're talking about who and who you are going to contract with as far as a health policy, and who you're not going to contract with or who you're going to give preferential contracts to, what you're doing is decreasing the availability for providers within the network.

And I know that at this time when we're having so many issues within our healthcare space, when we talk about the fact that we have provider shortages, whether it's MD, DOs, NPs, whatever, the last thing that we need to do is be putting in a policy that would allow for less providers to be covered via contract. The incentive that we discussed with CME, or however they want to incentivize people is very different language than who you are going to contract with.

So I wonder if I, me for example, I see patients who are, you know 40, but I do not. I am a very specialized kind of OB GYN.

Along with others who do high risk pregnancies, we don't, I'm not doing anything in the menopausal space. They don't do anything in the menopausal space. Will we still be contracted to provide care with this particular language? So, you know, I would strongly, you know, recommend that you go back during your trailer language and look at the way in which this is worded.

Because we want to make sure that what we're putting out is medically factual, sound and also is not something that's gonna ultimately decrease the ability for people to get providers for comprehensive health care, women's health care coverage in the future.

And so, thank you for all that you've done. But really need to make sure that we're getting this right. Thank you.

Thank you very much. Senator Gomez Reyes and Senator Smallwood Cuevas, if she comes back, had a follow-up question. So let's go to Senator Gomez Reyes.

Thank you, Mister Chair. I want to also echo the comments of my colleagues in thanking you, Mister Chair. Thank you thanking our PT Limon, Speaker Rivas, the Governor and his team, our Vice Chair, Senator Niello as well. All the sub chairs that have worked so hard to try to make sure that we take care of our sections so we can then present it to the rest of the committee and have sound comments to be made about it.

Chris, Scott, and Alyssa have been just absolutely necessary in this process to make sure that we are asking the right questions and we're getting the right answers.

And when we don't have the answers, that they are very resourceful. And for me personally, Joanne and Eunice have been invaluable to make sure that our sub 2 is able to have meaningful hearings. I also wanna thank my colleague, Senator Durazo, who will be leaving us, is going to be a County Supervisor in Los Angeles. It's good to have partners outside of the state building, whether it's our County Supervisors or other members of the of City of their cities.

They're the ones that are suffering the most with many of the the cuts that we put together.

And I'm looking forward to new leadership in Congress. We have a number of people that I think will be joining and I'm very excited about that as well. My comments are more general. I think that what we have in this budget is that we're able to look at issues that we've been talking about. Affordability, health protections, justice, air quality, education, housing, broadband, veterans.

So many issues that are being covered within this, within this budget. In education, I'm pleased to see that there are higher education protections. I'm glad that we're finding a way to make sure that those who qualify are going to get CalFresh and we don't have them go through all of these hoops to try to get the benefits. We're providing more research, career, online, high school, getting high school diplomas online, teacher recruitment, so important to make sure that we have teacher recruitment.

Our dream resource centers, our LGBTQ resource centers. These are all things that make make it easier, better for our students as they're getting their their degrees.

In housing, affordable housing opportunities, first time home buyers, the $10,000,000 dollars for disaster rebuilding. These are things that are extremely important for our communities. In labor, I'm really good I'm really glad to see the workforce development, whether it's through the Department of Industrial Relations or Community Colleges. For those in the ports who are losing their jobs because of automation, jails to jobs, and also outreach.

These are things that are so important as well as the Social Entrepreneurs for Economic Development Program, the SEED Program.

In transportation, our zero emission vehicles, whether it's our light duty, our medium and heavy duty, medium and heavy duty has been something that has been so important to me and I'm glad to see a 135,000,000 being put specifically for HVIP, to make sure that we continue providing those incentives to those heavy duty, especially heavy duty, diesel trucks that are looking to transfer to ZEVs. These are extremely important.

I appreciate my colleague, Senator Chair Richardson and her leadership, especially regarding the new judgeships. Care Court on Prop 36, $20,000,000 for pretrial services, $10,000,000 for the courts, and another $20,000,000 for behavioral health.

Making sure that in Prop 36, we're covering all of those areas that that the voters wanted us to cover and making sure that it's funded. And I appreciate that was put that was put in there. In health, a lot of this has been talked about. The reimbursement for our community clinics, especially for our UIS MediCal patients. For our asylees and victims of human trafficking who are MediCal.

Also, the distressed hospitals and the public hospitals providing some assistance to them. We can always say it's not enough and it'll never be enough. And I think that as things progress and we find that there are there are greater gaps just as we did earlier this year when we found those hospitals that were within ten days of being without cash, we found a way to try to help there.

The delay in the elimination of dental benefits, we've heard from so many of our constituents about how important that was. And midwifery, we're finding that we don't have enough OBGYNs to cover all of our rural areas.

And so on the education and training for our midwives, something extremely important. I appreciate that some money was put into that. Additionally, the $15,000,000 for the promotoras. We know that we need to get the message out to the community about what is and isn't covered and where the resources are and the promotoras have been an invaluable part of providing the outreach to our communities. And I appreciate that they were included.

Child care spaces, I know that's been mentioned. I appreciate the expansion of another 22,700. For adoption assistance programs, for the wrap around services. That's extremely important. And these may sound like small things, but for those who require these services, they are extremely important.

For our developmental, development services. The extension of remote access, that was going to sunset. And now with this inclusion in the trailer bill language, it will be, it will be extended. And they are so grateful, and we're hearing from them about that. There is so much in this budget, so much work that went into it.

I as I said at the beginning, I'm grateful to all those who took a leadership role, who spent countless hours in putting this together. It'll never be perfect, but it never has been perfect just as we are not perfect. But we sure did our very best, and I think that, this is a budget that I'm very proud to support and to vote on later today. Thank you so much and thank you Mister Chair.

Thank you. That completes our list and I was gonna go back to Senator Smallwood Cuevas and I think Senator Weber Pierson is going to ask the question for her. Okay. Just signal to me. I'll add you to the list but I'm gonna let the question be asked and then I'll go to you.

So go ahead.

Thank you. So I am asking this on behalf of Senator Smallwood Cuevas but is definitely a concern and a question from every member of the California Legislative Caucus. So one of the issues that we, noticed is that with the legal services that we're funding, immigration dollars this past time, very few was being funneled into other immigrant, Non-Hispanic or Latino communities.

And, you know, although black immigrants make up only about 7% of non citizens in The United States, they account for more than 10% of people in removal proceedings and more than 20% of those facing deportation on criminal grounds. They also face distinct barriers to relief, including limited access to culturally competent, multi lingual counsel and to country conditions, experience for certain black nations.

Many have no choice but to represent themselves in an extremely complex system. These are our communities that speak Amharic or Ethiopian, French, Swahili, and have been reportedly underserved, in the past as far as some of the funds that we have earmarked. Prior to this, in in an earlier version of the bill, there was $5,000,000 that was allocated to BAJI, the Black Alliance for Justice Immigration. Is that still, a part of this budget?

It, she noticed that it wasn't here and wasn't sure if it's because this is only noting changes or was wondering if it was actually removed.

Lourdes Morales with the Department of Finance. I believe you're referring to the $5,000,000 that remains on the budget.

Okay. Thank you.

Great. Senator Seyarto.

Thank you very much. And I think a lot of the really good parts of the budget have been, been talked about, by my colleagues up here. And and I too appreciate that, you know, our budget staff, stayed up all weekend, trying to prepare something that we could digest overnight and then responsibly come in here and vote on. I have just a couple of questions.

Number one, so, you know, reading through the list of things that got funding for $5,000,000 here and $10,000,000 there and $15,000,000 in other places, how much do we have a list of what were, what portion of this budget is district asks and and where those asks came from so that we understand how much is going into member requests?

The finance person is looking at me. At this point, at this point there are no Senate District requests in the budget. But there's a chance that we will come back in August. And deal with that.

And and the reason I asked that is because it's hard for me to believe that somebody actually woke up one morning and thought and and some of these requests here that are in there that made it into the budget.

The one thing and maybe you didn't ask the right question. The one thing is that some of the caucus requests are in the budget from individual caucuses but not from individual members.

A little bit of semantics.

But anyway, that would be helpful for us to understand where some of these come from because in the big scheme of things, when some of us are out there, at the mercy of the structure that we have, trying to get projects in their communities addressed, whether it's an interchange project, whether it's a fire station project, something to do with public safety.

All of those are are things that we see as as high priority items that come before we spend all our money on the other stuff. Because what it leaves us with what it eventually leaves us with is doing bonds. You know, borrowing for the money the stuff that we need and while we spend money on all this other stuff that actually should come in the back of the budget.

If we have if we have leftover money after we've taken care of all our real needs, then that's when we should be divvying up that money to be able to to help some of these organizations out and start spending some of that money.

So, yeah. So that was one of my major concerns. The other concern I have was regarding the last item here, and I think that's 182. Yeah. 182.

Yeah. And and that regard that's regarding the Proposition. What's the normal process for, determining what ballot or what Propositions go where on the ballot? Because I don't recall this being part of the process prior to this year and and probably the last time we had some ballots. Because I know there are 15, 15 Propositions, I think that have qualified, and most of them are are citizen initiated.

But somehow, we come up with this policy and this policy says all of the government ones that they want are are upfront. So who thought who thought that one up?

I'm not familiar with that process, but this AB 182 is not a budget bill. It's a policy bill that we are hearing today, in part because of the urgency and the the timing.

So it's not a budget bill, but we're in budget? Okay. And I think the reason it's an urgency item is because they need to get it done by when. Because this is it's clearly a a policy that we're developing a new policy for how to put things on the ballot, how to number what goes first and what goes first and what goes in front of the other thing.

I can't give you a a sort of specific date on when when it needs to be adopted, but I think there, you know, there clearly is a sense of urgency in order to prepare the ballot materials, in time. And I'll I guess I will add there have been some instances in the past where the legislature has specified, a proposition number for different propositions.

Otherwise, there's a process that goes on at the, I believe, the Secretary of State where they go in order and then it resets after a specific time period.

Thank you for that. The last comment I'm gonna wake work make is concerning. What I feel is an intrusion of policy into our budget, and it's a lot of this policy should have gone through the process we have for developing policy, which is the legislature in the form of bills, so that we can discuss those and the public can hear them.

Putting them into the budget and and trailer bills, because I hope you would agree, there's a lot of policy in here that has not been vetted through our normal process. So it feels like there's two tracks.

There's the legislative process and there's the three person agreement process and or three party agreement, that's what we call it. And, and that's not the transparency that the public seeks when we're changing policy on them, just like changing the policy for how we put things on the ballot. So those are a few things that I have concerns about the budget. Very hard for me to support a lot of this because frankly, I just haven't.

I didn't spend twelve hours last night staying up all night so I can read this because we got committees today that we have to be awake for.

So, there are some good things, some bad things, and, you know, a lot of the things that, like I said, it's hard to support something that you have no idea what's in it. Thanks.

Thank you very much for your comments. We'll go to the last person.

Last. I like that. Two questions and some of it

You were first before.

Yes. First and last. Two questions. Some of this, maybe clarification. Because I'm not sure I fully digested it.

But if I understand correctly, this bill removes legal immigrants like refugees, people here on asylum, domestic traffic victims off of full scope MediCal and yet preserves it for immigrants that are not here legally. I don't understand that.

And maybe I'm mistaken.

Megan Sabah, Department of Finance. The bill maintains coverage for those individuals in the budget year. But it, it delays it.

Beg your pardon?

The bill maintains MediCal coverage for those individuals full scope in budget year.

But delays it?

It delays the shift of those individuals to restricted scope MediCal from full scope MediCal in 2027-28.

So in the following budget year, they will not be covered?

Correct.

But undocumented immigrants will be.

Can I can I just add that? I think the the the the point of, I guess they're called qualified non citizens, is that's the group that you're speaking about. That there was a change at the federal level in in terms of their eligibility for federal coverage. And so, the proposal, I think it was at May Vision that, was included was to move this population to limited, restricted scope, Medi Cal because they would otherwise be full fully state covered.

It would be a cost of over $1,000,000,000 for the state to take that on. That is something that we, could not afford. It was again, part of the may revision. The other population I believe you're talking about is the, UIS or the Unsatisfactory Immigration Status.

Whatever that be

And that yes. And that was the expansion that and these individuals are covered under the expansion as was, approved by this legislature and the administration. And that solution last year was to move, well, was to freeze that enrollment, but they would still be eligible for full scope MediCal. So just wanna those are the two populations. Understand your question.

I think what we would say is the the qualified non citizen population was moved off as a result of federal policy changes. We cannot afford to backfill unfortunately for them. And then the other population was a part of the that expansion population that is now frozen but is covered based on last year's decision in the 2025 budget act.

That other population as you describe it also is not eligible for federal funding. Correct?

That they are a state only population. That's right.

So at this point, both of those populations are not eligible for federal funding. Is that what you're saying?

Largely, that is correct. I think there are some emergency services that are available. But again, I

Right. But in terms of MediCal. Federal government won't pay for either of those. So we're we are prioritizing undocumented immigrants over legal immigrants. Correct?

Well, and I think again going back to the decision that was made last year was I understand that.

But circumstances change. And so we made a priority decision.

I think we made a decision based on what we could fiscally, what we could actually afford. So yes.

I understand that. A budget is really nothing more than a statement of priorities. The entire budget is a statement of priorities. Obviously, we differ across the aisle on some of those. But the point is that circumstances change.

I'm not saying whether it was correct or incorrect but circumstances changed and, we eliminated one population but we maintained the benefits for another population. That is a statement of priority. I don't expect you to answer that because you're not the priority setter but I just think it's important to note that. The other question has to do with, homeless funding. If I understand correctly, this budget for the first time requires a local match in order to receive homeless funding?

Yes. I believe that was part of the accountability language.

That's never happened before. Why?

I am not exactly sure why the locals haven't. And I wouldn't say that that they haven't been providing. I think this is to ensure that there is local match to state dollars. And the accountability language is something that we have been discussing with legislature and with locals for a couple of years a couple of years now.

It would seem to me that, I mean we all have budget pressures. Locals do also. Coincident with ours. And if we can't afford as much as we were allocating previously. Well certainly a way to save money is to say you need a local match and if you don't have it you don't get any money. That's one way to save money.

Seems that may be what we're saying here which doesn't make sense to me. It would make more sense just to allocate less. It is the state's responsibility, State and Federal Government's responsibility to fund these Health and Human Services Programs and local governments carry them out, counties in particular.

And so we've made the decision that because of our budget pressures, we're going to push those budget pressures back on the local governments requiring a match which is exactly what we're complaining about the Federal Government doing.

That is a statement.

If I may. I believe the rationale for having a local match is really so that locals have some skin in the game. And that it isn't just the state pouring dollars into local entities. I would say that is the driving factor.

Not that there is a, that we wanted. Clearly, we are in tight budget frame type, tight budget times, but we continue as a body to allocate one time funding to housing and homelessness programs. We, it is a priority. But I think it was very clear. The Governor has said this a couple of budget cycles now that he wants to see some accountability at the local level.

And I think many Senators on the stand today have said similarly that we want results. And so this is one way that we can help better ensure those results if locals do have a match. And so I would say that it is the rationale and not because we want less state money and more local money.

The Governor has indeed made that very clear ever since the top down approach to homelessness funding when we spent $20,000,000,000 and the numbers went up. And after all of that failure, then it was all the fault of local governments. That's an editorial comment on my part. But also, if the point is that you want local government skin in the game, maybe that's a similar rationale from the Federal Government relative to things that we're complaining about, their budget process having on our spending.

Maybe the rationale is the same, at least partially. So thank you for that.

Just before I go to public comment and take a survey about who wants to comment and if you're in the hall, no I haven't done it yet but clearly you've been waiting. Clearly you've been waiting. And for those of you in the hallway that think you'll sneak into the end of the line, you should come in, in a moment because I'm gonna ask who who wants to testify.

I was just going to respond to one thing as my comment and that is the legislative analyst was asked why nobody listened and actually this budget is the listening because it was don't spend the excess money this year. It's being held for two years.

Cut the structural deficit. It's cut in half. Have large reserves. There's $35,000,000,000 of reserves. Balance the budget for two years.

That's what we've done. So I think that the budget was responsive to the direction outlined by the legislative analyst. People are clearly voting with their feet here. And so let me just see is there is there anybody that's not in line that wants to speak? One person, two people.

Okay. Then I'm gonna ask that you not take more than a minute and if you can be more succinct, that's great. If you find somebody that you can agree with that already spoke, that's great. And I will hope to be done by 12:30 so that we can move to discussion and a vote. So with that, for some reason, Mister Micheli has always knows how to manipulate the beginning of the line.

So welcome to the committee.

Morning, Mister Chair. Chris Micheli here on behalf of the Los Angeles County Metropolitan Transportation Authority. Hopeful that by the end of this summer, we'll see Olympics funding for 2028 projects. LA Metro also supports fully funding TIRCP and LC TOP as well. Thank you, Mister Chair.

Thank you very much. Welcome.

Thank you. Christine Smith, Health Access California. We appreciate the legislature and the Governor delaying the worst of the cuts for California's immigrants and for ensuring that humanitarian populations will receive full scope MediCal through this budget year.

As one of the leaders of the fight for our health coalition, we thank you all, including the Governor and the Assembly for reaching a final budget agreement that advances a fair share contribution to hold the largest corporations that responsible for for contributing to MediCal when they push their workforce onto the safety net. Thank you for all your hard work.

Thank you very much.

Thank you very much. Welcome.

Thank you very much. Vanessa Cajina with KP Public Affairs, first on behalf of the California Academy of Family Physicians. Greatly appreciate Senator Doctor. Weber Pierson's comments on the menopause trailer bill language. We'll continue to work on that to refine it for clinical indications.

Then on behalf of CALPACE, the Statewide Association of Programs of All Inclusive Care for the Elderly, thank you. And then on behalf of Encompromiso, Promotoras, thank you.

Thank you. We have reached the shy part of testimony.

Mister Chair.

Welcome to the committee.

Thank you very much, Mister Chair members. Amy Brown. On behalf of the, Big City Mayor's Coalition, really wanna extend our appreciation to the legislature and the Governor's office with, AB 179 and and crafting some trailer bill, language that also allocate the $900,000,000 and the flexibility that we have for implementation. Appreciate it.

Thank you very much. Welcome.

Morning, Mister Chair and members. Andrew Shane on behalf of the County Welfare Directors Association. In sincere gratitude to the entire senate. We are just you heard from county directors. You heard from eligibility workers, and this budget really reflects that input.

It's gonna save lives by making sure that we have the human touch needed to help people fight through the red tape and keep their health care and their food assistance, as well for rejecting the cuts and cost shifts in IHSS, APS, the critical investments in child welfare that were mentioned.

We're gonna need to sustain these investments in our county eligibility workers, but we again thank the Senate for the original plan which did that along with a broader set, of actions to support our health and human services programs. Thank you.

Hi. Good morning.

Thank you very much, you're welcome.

Hi. Beth Malinowski with SEIU California. Once upon appreciate tremendous work that's gotten us to this point, particularly his leadership on revenue including creating that pathway for addressing corporate revenue and MediCal. Wanna align my comments with those of health access and our commitments to health for all population or immigrant community and their health in this budget. Definitely wanna align my comments with CWDA, especially it relates to county eligibility and for IHSS.

Wanna also acknowledge the dedicated funding for public hospitals so important. Thank you for that. Additionally, for everything we got right on this budget for health, do Wanna acknowledge a couple of areas. One, disappointment not seeing any funding for urgent care or an alternative. Look forward to continuing the conversation on that.

Additionally, to bring to the long term care space, specifically skilled nursing facilities. Looking for that one year bridge for W quib. Disappointed not to see that there. Moving on briefly to early childhood and education. Just want to acknowledge and appreciate the 200,000 plus additional spots for low income families.

Wanna appreciate the 2% cola, the disaster childcare funding, and look forward to working for the department implementation of that urgently for families in LA County impacted by the fires. Wanna appreciate the future work we'll keep on doing together around implementing alternative methodology, providing a competition keeping up. And for K through 12, Wanna acknowledge the needs for additional work on Smur Bridge. Thank you.

Thank you. You packed a lot in that. Welcome.

Good morning, Chair and members. Gabriela Chavez with United Domestic Workers, representing 250,000 home care workers. We wanna thank the Senate, the Senate pretend budget leaders, and administration for working together to reject all cuts to IHS, strengthen the medical asset test, and we appreciate your commitment, to protect seniors and people with disabilities.

We also appreciate the funding for the adult learning demonstration project, and we look forward to continue working with you on long term revenue solutions that ensure corporations, pay their fair share and preserve the programs that strengthen California. We also echo our comments with CCPU regarding childcare.

Thank you.

Thank you very much. Welcome.

Hi. Justin Garrett, California State Association of Counties. I just really wanna express our gratitude for a budget that understands the critical role counties play in delivering services that our communities rely on.

In particular, we are appreciative of the increased funding for HAPP, the $50,000,000 for VOCA, the robust funding for county eligibility for Medi Cal and CalFresh in response to HR 1, the funding for public hospitals in response to HR 1, funding for distressed hospitals, rejecting the IHS cost shift, and the funding for counties to put on the election in November 2026. However, we do wanna highlight our concerns with no funding for Inogen Care or an alternative to Inogen Care.

There are going to be people who still lose Medi Cal because of HR 1, and County Inogen Care programs are underfunded, and there's a critical need for health care for this community. And then finally, on Prop 36, appreciate the Senate's leadership and continue to fight for Prop 36 implementation funding. Unfortunately, one time funding for one county department falls short of what's needed and we look forward to continue to highlight that as well. Thank you.

Thank you very much. Welcome.

Good morning, Sara Bachas with Children Now. Thank you so much for your leadership in taking a bold and long call for step forward. I don't know, more effective, accountable, and equitable educational system for our students and their families. We support AB 181 and the investments in early education and care, the preschool shift, paid pregnancy leave, and the creation of CalNas, as well as the investments in educator in workforce, as well as bilingual educators. Thank you for the strong investments in higher education as well.

Thank you very much.

Welcome. Good afternoon, Chair and members. Melissa Barto on behalf of Ed Trust West aligning our comments of appreciation and urging an aye vote on AB 181, education governance. Also expressing appreciation and an aye vote for strong investments in schools and community colleges including community schools, college and career access pathways, and new proposed investments and expanding pathways to the educator workforce. We urge an aye vote. Thank you.

Thank you very much. Welcome.

Thank you. Sarah Petrovsky on behalf of the California Association of School Business Officials and also my colleagues at the Association of California School Administrators and California County Superintendents. First, thank you so much for your work on the budget. Second, we are in strong support. We are in strong support of AB 181.

We think this is a long overdue shift to make sure education governance system is aligned and can more effectively support our schools in delivering a high quality instruction and support to our students. Thank you so much.