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Time After Time: Managing the Budget Clock

In NFL Football, we often hear about the importance of "clock management" as a pivotal strategy to secure a win. This concept of meticulously managing time to avoid fumbles is just as crucial in the California budget process. Clock management helps evade last-minute chaos and ensures a smooth passage of the budget per the law.


California's constitution mandates that a state budget must be passed by June 15th each year, a deadline that underscores the importance of timely and efficient clock management in the legislative process. This requirement ensures that the final budget passes well before the start of the new fiscal year on July 1st. Furthermore, the budget must be balanced, meaning that expenditures do not exceed revenues. Given this year's projected deficit, this balanced budget requirement makes negotiations more difficult, as policymakers weigh proposed cuts against the need for vital services and a multitude of programs with many constituencies. 


The period between 2008 and 2012 marked a turbulent chapter in California's budget history, often requiring multiple adjustments throughout the fiscal year. Coming out of these years mired with budget instability,  a number of reforms passed that impacted the California budget clock and how this work is managed.  The passage of Proposition 25, which changed the budget approval requirement from a two-thirds vote to a simple majority changed the dynamics of budget passage. This change comes with a strong incentive for legislators: they forfeit their pay if the budget is not passed by the constitutional deadline of June 15th. 


Additionally, Proposition 54, passed in 2016, mandated that all bills must be in print 72-hours before any legislative action can be taken. Given the extensive statutes passed as part of the annual budget process, completing everything 72 hours before the June 15th deadline is no trivial task. To navigate these constraints, key budget players must work backward from the June 15th deadline, ensuring not only that all parties reach an agreement but also giving themselves enough time to prepare the bills for voting and 72 hours in print.  The key issue that needs to be resolved first is the Budget Bill, which includes the vast majority of the appropriations.  The “trailer bills” often go into print shortly after the June 15 deadline and in recent years have extended to the end of the legislative session in some cases. The Governor has 12 days to act on bills sent to his desk outside the end-of-session timeline and this becomes another critical date as budget players drive to finalize all of the details in a three-party agreement between the Governor, Senate and Assembly.   


The period between the release of the May Revision and the end of the fiscal year is a whirlwind of activity.   All those involved in the budget process are working around the clock to reach an agreement.  Just as in football, effective clock management in the California Budget process is essential to avoid fumbles and the game clock running out.  The decisions policymakers face are significant but the time afforded to make them is fleeting. 

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