Legislative Watch with Ted Toppin

Let me say first that I hope you and your loved ones are healthy, safe – and at home.  In compliance with Governor Newsom’s stay at home executive order, this report is written from my basement, which is cold, dank, and, well, smells like a basement.

In the last month, in response to questions from family, friends, co-workers, and clients, I have found myself leaning, almost like a crutch, on the word “uncertain.”  Uncertain, of course, is just a fancy way to say “I don’t know.”  Needless to say, I do not like to say “I don’t know.”  It makes me uncomfortable – after all, as part of my job, I’m expected to know stuff.    

But that’s the world we live in right now.  As our state, and every other part of the world, respond to a life-threatening pandemic, just about everything is uncertain.  Uncertain is also the operative word for the path ahead for our legislative session, the state budget and, the hundreds of bills still pending. 

There are, though, two certainties.  Per the California Constitution, the Legislature must pass a budget by June 15 and adjourn on August 31.  On March 13, the Legislature approved $1 billion in emergency aid and shutdown legislative activity until April 13.  Last week, the Pro Tem and Speaker extended the suspension of full legislative activity until May 4.  But on April 9, the Senate announced there would be a budget meeting on April 16 to review state COVID-19 spending to date.  It is possible, of course, that by the time you read this, legislative scheduling will have changed again.

On the budget, it is expected that the Governor will release a May Budget revision as usual in mid-May that will propose a FY 2020-21 “baseline” or “workload” budget – which will roll over the current year spending authority with minor adjustments for changes in caseload.  A workload budget most definitely will include the money necessary to meet retiree health care and pension contribution statutory requirements.  Additional funding to prevent the spread of the virus, and rebuild the lives of Californians devastated by it, will also certainly be part of it.

But long gone is the somewhat ambitious budget proposal the governor unveiled in January.  It projected a $5.6 billion surplus, over $20 billion in rainy day funds, and proposed expansions in health care, early childhood education and a supplementary payment of $500 million to bolster CalPERS. 

Today, according to Governor, that budget is “inoperable.”  In memos to his committee, Assembly Budget Chair Phil Ting wrote “we will have to adjust to the realities of the COVID-19 impact… we will have less money and less time to adopt a balanced budget… We must lower expectations about our budget outlook to reflect our new reality.”

With this year’s tax filing delayed until July 15, the Governor and Legislature are contemplating a so-called August revision to makes budget changes to reflect the realities of the revenue that shows up in state coffers in July.  According to Ting, “given the initial projections of the virus’s impact on the state economy, it is possible that the State will need to consider sizable ongoing reductions to major programs during this time.” 

What happens to the hundreds of bills that have been, or normally would be, introduced this legislative session?  Legislative leaders in each house have been contemplating tightly restricting the number of bills each legislator can introduce.  Committee chairs are politely, but urgently, asking legislators to drop all bills that do not “address a time-sensitive issue related to COVID-19” or have “urgent public safety implications.”  On April 10, Senate Pro Tem Atkins formally requested that Senate committee chairs hold off on evaluating existing bills that would normally be scheduled for hearings upon their return and instead focus on legislation responding to immediate COVID-19 related concerns. 

In less than a month, the COVID-19 outbreak has turned the state economy upside down, cut tax revenues, put millions out of work, and thrown the normally regimented state budget and legislative calendars out the window. 

We know the Legislature will pass a balanced budget by June 15 and adjourn the regular session for the year by August 31.  What happens in between, and after, is all subject to change dependent on the arc of the pandemic, updated public health directives, and the speed at which California’s economy recovers.

There is one other thing that is certain – the state, our country, will bounce back at some point.  Life will return to normal.  We’ve endured wars, recessions, terrorist attacks, natural disasters, and countless other interruptions to normal life.  It is these difficult times that make the good times that follow that much better.