SACRAMENTO, Calif. (CN) — Tempers flared briefly Monday as California lawmakers discussed early action on bridging a budget gap that is either $38 billion or $73 billion, depending on whose numbers are examined.
The Monday hearing of the Assembly’s Budget Committee came less than a week after Governor Gavin Newsom, Assembly Speaker Robert Rivas and Senate President pro Tempore Mike McGuire, all Democrats, announced fiscal moves that will save $17 billion.
The monetary maneuvers, in the form of a bill, could reach a vote this coming Thursday.
Calling himself optimistic, Newsom has said the budget deficit currently is estimated at some $38 billion. The Legislative Analyst’s Office has pointed to a possible deficit of around $73 billion.
Assemblymember Bill Essayli, a Corona Republican, pointedly noted that the early action — the focus of the hearing which includes moves like pulling back one-time spending, deferring expenditures, and borrowing — only addressed the $38 billion shortfall.
“I don’t feel like the governor is taking this seriously,” Essayli said, noting that the deadline to pass the budget is about two months away. “My message to the governor’s office is you’ve got to wake up and you’ve got to take this seriously.”
Assemblymember Jesse Gabriel, an Encino Democrat and committee chair, quickly pushed back. Gabriel noted that over 60 public hearings on the budget have been set. Additionally, at this stage, the committee isn’t attempting to write a final budget. Instead, it’s focused on early action. He expressed a desire to hear from people in a thoughtful manner.
“I just want to back everybody up for a second,” Gabriel added. “This is not the state budget. This is not the June budget. This is a first step.”
The deadline to pass the budget is June 15.
Assemblymember Steve Bennett, a Ventura Democrat, said lawmakers could make soundbites or dig into the budget and see what needs changing.
“That’s certainly the more productive way to move forward,” Bennett said of the latter choice.
Some of that digging included questions about proposed borrowing to make ends meet.
Assemblymember Vince Fong, a Bakersfield Republican and the committee’s vice chair, asked how much debt service would be owed on the proposed borrowing of $1.4 billion.
Staff with the state Department of Finance didn’t have an immediate answer.
“Well, it’s a good thing I ran some figures,” Fong said, saying his math shows some $4.6 billion would be owed.
The borrowed money would come from a special fund, meaning the state is lending to itself.
A handful of committee members expressed the need to increase the state’s financial reserves. Assemblymember Cottie Petrie-Norris, an Irvine Democrat, asked for more opportunities to talk about how they can grow their reserves.
Newsom has proposed using about half of the state’s reserves, about $19 billion, to help bridge the fiscal gap.
Petrie-Norris also wants more data from state officials about the efficacy and return on investment for state programs. That information would help legislators as they make difficult funding decisions.
The Legislative Analyst’s Office announced the budget deficit late last year. Delayed tax returns were one reason, as was a slowdown in the California economy.
The deficit includes financial gaps in the current fiscal year and the upcoming 2024-25 year.
The analyst’s office said recently that tax revenues weren’t meeting expectations, leading to a revision of its estimate to $73 billion.
On Monday, Legislative Analyst Gabriel Petek told the committee that April is an important time for tax collections.
Newsom will release an updated budget that includes April’s numbers next month, called the May revise.
Gabriel, the committee chair, praised some people for doing the hard work of the committee. However, he also noted that some people didn’t attend certain committee meetings.
Essayli tried to interrupt, with Gabriel tersely telling him that the committee operates under procedural rules.
“You can explain to your constituents why you didn’t show up to these meetings,” Gabriel said.
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