Legislature faces deadline week for CA budget

The state’s 2023-24 budget has been subject to a lot of political wrangling this year as California faces a $31.5 billion spending gap. The constant push and pull of balancing the budget means that if one program, agency or proposal receives funding, something else could lose out. 

The Legislature plans to pass its budget by Thursday, otherwise lawmakers won’t get paid. Sunday night, the bill was published that contains the spending plan agreed to by Democratic Assembly and Senate leaders.

In a joint statement today, Senate President Pro Tem Toni Atkins and Assembly Speaker Anthony Rendon said: “The Senate and Assembly have reached a two-party agreement on a balanced and responsible budget, and we are continuing to negotiate and make progress on three-party final budget.”

But legislative leaders must also reach agreement with Gov. Gavin Newsom on a final budget by July 1. Concerns remain about programs that could be slashed or hampered by budget cuts. Some that may be on the chopping block include:

• Public transit: As they face a dire “fiscal cliff” of declining revenue, plummeting ridership and an end to federal aid, transit agencies are seeking $5 billion from the state to stay afloat. The legislative deal allocates $1.1 billion in cap-and-trade funds over three years for transit operations — “a very positive first step,” said their champion, Sen. Scott Wiener, a San Francisco Democrat. The agreement also reverses a $2 billion cut by Newsom to transit construction funds, Wiener said.

• Student career training: Last year California created Golden State Pathways, a $500 million program that offers high school and middle school students college and career academic programs. But lawmakers want to take back $400 million from the program, writes CalMatters’ higher education reporter Mikhail Zinshteyn. The California Department of Education, which received the money in February and is responsible for distributing the funds, opposes the proposal. But one Senate staffer said because the department hasn’t spent the funds yet, the money was being “reallocated” rather than cut.

• Food stamps: With food banks across the state already overwhelmed, efforts to boost the state’s CalFresh program face a tough challenge. Sen. Caroline Menjivar’s proposal to raise benefits from $23 to $50 per month will cost an estimated $95 million a year. Newsom doesn’t include a similar measure in his budget plan, and his May revision also does not include any money for Market Match, a nutrition incentive program that lets CalFresh shoppers double their benefits for fruits and vegetables at farmers’ markets.

• Homelessness programs: In both his January and May spending proposals, Newsom set aside $15.3 billion to tackle the state’s homelessness crisis. In an effort to increase accountability, the money also includes $3 billion in grants for local government agencies that can submit specific “action plans.” Today, former San Diego Mayor Kevin Faulconer, a Republican, will hold a press conference about the city administration’s “failure to act” on homelessness as the San Diego City Council prepares to vote on whether it should ban encampments on public property.

How did California go from a $97 billion budget surplus last year to a $31.5 billion shortfall the next? To answer this question, CalMatters’ data and interactive editor John Osborn D’Agostino and data journalist Jeremia Kimelman examined how the state makes its money, the impact the stock market has on tax revenue and the potential solutions to stabilize revenue. Read their full explainer here.

Youth journalism: CalMatters is ramping up its youth journalism initiative for high school students and educators. That includes an educator fellowship, with a July 10-13 workshop at CalMatters’ offices in Sacramento. Here’s a FAQ, and the application, with a priority deadline today. Read more from our engagement team.

Police shootings panel: The next CalMatters event, at 8:30-9:30 a.m. Tuesday, focuses on Attorney General Rob Bonta’s investigations into police killings of unarmed civilians. “Fatal Shootings: California’s Bid to Police Its Police” will be moderated by CalMatters criminal justice reporter Nigel Duara, who has been tracking these cases. Sign up here to attend in-person or virtually.

Fresno housing discussion: A CalMatters live event, in partnership with Fresnoland, will focus on housing affordability in Fresno. It is scheduled for 6-7 p.m. on Thursday, in person at the Fresno Art Museum and virtually. Sign up here to attend.

Other Stories You Should Know

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1 A poster child for broken government

By now, the failures of California’s Employment Development Department during the pandemic have been well-publicized: $32 billion lost to fraud, 5 million workers with delayed payments, as many as 1 million people wrongly denied unemployment benefits and 150,000 workers stuck in an appeals backlog. 

To a former U.S. deputy chief technology officer hired by Newsom to analyze EDD’s shortcomings, the whole debacle served as a prime example of a broken government bureaucracy.

As CalMatters’ investigative reporter Lauren Hepler explains, Jennifer Pahlka is a founder of Code For America and co-led the Strike Team that Newsom created in 2020 to evaluate the EDD’s long benefit delays and high incidence of fraud. In her new book Recoding America, Pahlka says incompatible regulations and flawed oversight contributed to the department’s dysfunction. 

“The bureaucratic confusion ultimately lands on the people,” Pahlka wrote.

EDD’s mishandling of pandemic-era unemployment benefits was brought to light again last week, during a hearing of the U.S. House Committee on Education and the Workforce. At the nearly three-hour meeting, Rep. Kevin Kiley, a Rocklin Republican, asked former California labor chief Julie Su if she accepted “any responsibility” for the fraud that “occurred on your watch in California?” President Joe Biden has nominated Su as the U.S. Labor Secretary, which Republican lawmakers strongly oppose.

“I certainly know that I and many of my colleagues, and others that sat in the same position that I did when the pandemic hit, wish that we had a system that was capable of meeting the need,” Su replied.

The department, which declined to comment for Hepler’s story, has been working on fixing some of the problems. It has contracted with third-party companies for services, including call center support and an online identity verification system. It also is working on another tech modernization project called EDDNext. 

2 A long, hot labor summer?

State workers may go on the picket line when their union contracts expire in early July, but more private sector employees may go on strike sooner. These labor tensions across various industry sectors have been culminating in what KCRW dubbed “hot labor summer.”

On Thursday, Unite Here Local 11 — which represents more than 32,000 hotel, restaurant, airport and other hospitality workers in Southern California and Arizona — voted to strike, reports the Los Angeles Times. The union contracts of 62 Southern California hotels are set to expire on June 30, and workers are advocating for higher pay by leveraging the fact that the 2026 World Cup and 2028 Olympics will be held in Los Angeles.

The Writers Guild of America, representing film and television writers, is entering its seventh week of strikes and may be soon joined by members of the Screen Actors Guild, who voted last week to strike if they do not reach an agreement with employers by June 30.

“We have the very rich and these mega-million corporations who keep paying their CEOs and and their stockholders enormous amounts of money. There’s tons of corporate profit,” Lorena Gonzalez Fletcher, head of the California Labor Federation, told KCRW. “And yet none of that is getting to the average worker who’s doing the work.”

Fletcher added that more workers are “showing support for one another” as they become more aware that inequitable working conditions are not exclusive to minimum wage workers. 

Some politicians also are showing their support for labor: In early May, U.S. Senate hopefuls and Democratic Reps. Adam Schiff of Burbank, Katie Porter of Irvine and Barbara Lee of Oakland appeared together in a panel discussion to curry favor from the Labor Federation and other organized labor groups. With 2.1 million members from 1,200 local unions, its members can be a key source of campaign money and volunteers.

Other things worth your time

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IRS apologizes for telling some Californians to pay taxes early // San Francisco Chronicle

Sen. Wiener is amassing women leaders’ support in Congress bid // San Francisco Chronicle

To get abortion training, some medical students leave their states and come to CA // KQED

Rep. Pete Aguilar might be the future of the Democratic Party // Politico

Migrants say Florida contractors pushed for them to fly to California // Los Angeles Times

Frustration after a fire: Recovery for rural schools can be long and complex // EdSource

Cows help reduce wildfire risk, restore native habitats // The Orange County Register

CA’s 2020 smoke storm was horrific. What did the state learn? // The Washington Post

A new Hiroshi Sugimoto sculpture in SF reaches for infinity // The New York Times

Homelessness in San Diego County rose 22% last year // The San Diego Union-Tribune

Renting a Bay Area home now half as expensive as buying // San Francisco Chronicle

Oakland police response times to violent crimes skyrocket // The San Francisco Standard