Warp Speed Ahead: The State Budget Process After the May Revision

In dozens of hearings over the past few months, state lawmakers have taken a close look at Governor Brown’s budget proposals for the 2015-16 fiscal year, which begins this coming July 1. Now, with the release of the Governor’s revised spending plan — the May Revision — last week, the budget process is about to shift into warp speed as legislators race to meet the June 15 deadline to pass the 2015-16 budget bill.

How is the budget process likely to unfold over the next several weeks? Barring a significant breakdown in negotiations between the Governor and legislative leaders, the process of crafting the 2015-16 budget is likely to play out as follows:

  • Committees in the Assembly and Senate complete their review of the Governor’s proposals and finalize their versions of the 2015-16 state budget. Budget subcommittees have begun reviewing the May Revision. (Members of the public often — but not always — have an opportunity to testify during these hearings.) Subcommittees will be voting on new May Revision proposals as well as on the scores of other budget issues they’ve been reviewing since the Governor released his proposed spending plan in January. Many of the Governor’s ideas will win approval, while others will be modified or rejected. In addition, budget subcommittees are likely to adopt new spending proposals that the Governor did not include in his proposed budget. Subcommittees in each house will report their recommendations to either the Senate Budget and Fiscal Review Committee (with a final vote scheduled for this coming Friday, May 22) or the Assembly Budget Committee (with a final vote scheduled for next Wednesday, May 27).
  • The Legislature convenes a budget conference committee. Inevitably, there will be differences between the Assembly and Senate versions of the 2015-16 budget. The two houses are likely to convene a joint committee — starting either in late May or early June — with the goal of ironing out many of these differences. (Controversial and/or “big-ticket” items will most likely go to the “Big Three” for resolution, as described below.) Budget conference committee meetings are open to the public, although public testimony generally is not permitted. However, members of the public can schedule meetings with the Governor’s staff and with legislative staff during this period to continue sharing their budget priorities and areas of concern.
  • The “Big Three” meet to negotiate the final budget deal. While the Governor and lawmakers will see eye to eye on many budget issues, there are likely to be significant differences in a number of areas. The task of bridging these differences and crafting a final budget deal falls to the Big Three: Assembly Speaker Toni Atkins, Senate President pro Tempore Kevin de León, and Governor Brown. These negotiations will take place behind closed doors, possibly continuing well into June.
  • The Legislature passes the budget bill — by midnight on June 15 — and related “trailer” bills. The budget deal struck by the Big Three will ultimately go to the floors of the Assembly and Senate for final passage, possibly after being ratified by the budget conference committee. The budget package will consist of the budget bill as well as a number of trailer bills — possibly two dozen or more — that contain changes to state law that are generally related to the budget bill. The budget bill and trailer bills can be passed by a simple majority vote in each house. Yet, while trailer bills can be approved at any time, the state Constitution requires the Legislature to pass the budget bill — and send it to the Governor — by midnight on June 15. If lawmakers miss this deadline, they permanently forfeit their pay and their reimbursement for travel and living expenses for each day that they’re late.
  • The Governor signs the budget bill and trailer bills, possibly after issuing “line-item” vetoes. If the process has gone reasonably smoothly up to this point, Governor Brown should have the entire budget package for his signature soon after June 15. As is well known, the Governor has veto power, which allows him to say “no” to legislative proposals. However, the Governor can do more than veto a bill. He can also sign a bill while reducing or eliminating any of the appropriations contained in that bill. (For example, he can reduce a $1 million budget item by half, to $500,000.) This line-item veto authority gives the Governor significant leverage in budget negotiations with legislative leaders. While the Legislature can override a veto by a two-thirds vote of each house, overrides are rare, and vetoes tend to stick.

As always, we’ll be closely tracking state budget negotiations in the coming weeks, providing timely analysis and commentary on both the big picture and the minute details via our website and this blog. Stay tuned.

— Scott Graves