Many California policy veterans find the budget process shrouded in mystery. Many think that the budget passed ahead of the start of the fiscal year on July 1st is the end of the story. As someone who has closely observed and participated in the California budget process, I know that it is not just a one-and-done deal that happens once a year.
Each year, August brings about additional budget items. Often people do not understand what items are discussed in August and why. As someone with experience in legislative, administrative, and advocacy roles concerning budget items, I know the dynamic nature of the budget process. Given California's budget dwarfs those of many nation-states--it stands to reason a stagnate budget done and dusted by July 1st is virtually impossible.
Here is an expert's guide to some of the issues we might see in August which runs the gamut between mundane to significant.
Technical Cleanup: As one can imagine, in a bill as voluminous as the budget, mistakes happen—including typos. There is always a Budget Bill Jr. to clean up these issues or "fatal flaws" that would make the appropriation of the funds difficult. These changes are in a Budget Bill Jr. or a new bill that amends the Budget Act. During my time at the Department of Finance, during one budget cycle, we had six Budget Bill Jrs.
There is More Work to be Done!: Often, there are issues that, given the tight timeline between May Revise and the new fiscal year, there just is not time to get done. These issues can vary from an agreement that was simply not reached between the parties to the issue not being mission-critical to the General Fund Budget. The General Fund or primary budget is done, but smaller funds like this may not be ready, and policymakers need the legislative break to sort out the details. This includes special funds such as the Greenhouse Gas Reduction Fund that in previous years was punted to August. (This year, the Greenhouse Gas Reduction Fund package was finished in the final budget agreement).
Policy in the Budget?: There is an old complaint in Sacramento about policy being in the budget. The rationale seems to be there is some bright line between what policy should be heard in the Budget Committees versus Policy Committees. I always found this distinction strange. Merriam-Webster defines policy as:
1.a. prudence or wisdom in the management of affairs
1.b. management or procedure based primarily on material interest
2.a. a definite course or method of action selected from among alternatives and in light of given conditions to guide and determine present and future decisions
2.b. a high-level overall plan embracing the general goals and acceptable procedures, especially of a governmental body.
The Budget is the ultimate high-level overall plan for the State.
As a process matter, the budget is debated by policymakers and voted upon in both committee and full floor sessions like any other bill (in years past it was heard in Conference Committee). The mere allocation of finite resources is a policy decision. Primarily this policy argument is centered around "trailer bills." Trailer bills must accompany the Budget. Generally, trailer bills are statutes required to appropriate the funds allowed for in the Budget Act. If the Budget Act is the purchase price of an item, then the trailer bills are the instruction manual. The Department of Finance website hosts all trailer bills and a trailer bill tracker. At the end of the day, the venue bills are heard is the providence of the Legislature be it budget or policy. But rest assured we will likely see trailer bills passed in August that are not on that tracker and maybe not even on your radar!
The budget is a dynamic process and must reflect the changing realities of the state. As one can imagine in a state as large as California, there are complexities, and things can change drastically between July 1 and August 31! This year the Democratic National Convention also takes place in August and given many will want to attend we may see the budget cleanup handled early in the month. We often forget that the initial budget is just a blueprint, a starting point for countless adjustments and re-evaluations. It’s a living document that needs to adapt to new economic data, unforeseen emergencies, and evolving priorities.
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