Transcript Highlights:

• Given that we seem to be getting almost daily reports of another school district that's issuing layoff
• We'll have some employees on the receiving layoff notices and resources that are just starting to show

Summary: The Assembly Budget Subcommittee on Education Finance met for its annual Proposition 98 overview, with Chair Alvarez outlining the committee’s focus on K-12 funding, student outcomes, and use of one-time funds. Superintendent Tony Thurmond gave an update on education issues, including wildfire recovery support for affected school communities, ongoing concerns about federal threats to education funding and immigration enforcement, progress on literacy and math, dual-language immersion, educator housing, and support for dual enrollment. Members broadly expressed support for these priorities, while also raising concerns about implementation, funding stability, and the need for schools to remain safe places for students. The committee then reviewed the Governor’s Proposition 98 proposal. The Department of Finance said the 2025-26 Proposition 98 guarantee is projected at $118.9 billion, with higher revenues and TK-related rebenching driving the increase. The LAO said the budget adds about $7.5 billion over two years and discussed the volatility of the guarantee, especially in 2024-25, when changes in revenue could have an outsized effect on school funding. Members questioned the proposed $1.6 billion delayed settle-up payment, the legal basis for delaying it, and the impact of possible federal funding freezes. The LAO presented alternatives such as a reserve deposit or delayed disbursement, while Finance said the proposal is intended to manage uncertainty. Members also raised concerns that ethnic studies implementation was not funded in the January budget, and Finance said the administration was not proposing funding for it. The committee next heard on the Proposition 98 rainy day fund and education deferrals. Finance said the reserve would receive a mandatory deposit of about $1.2 billion in 2024-25 and a discretionary deposit of $376 million in 2025-26, leaving a balance of about $1.5 billion. The LAO supported rebuilding the reserve as a way to manage volatility. On deferrals, Finance described the Governor’s plan to eliminate remaining deferrals by 2025-26, and the LAO said paying them off improves cash flow and budget resilience. Members generally supported eliminating deferrals and rebuilding reserves, though some asked about acting earlier if revenues allow. The committee also reviewed the proposed $1.8 billion student support and professional development block grant; Finance said it would fund professional development, recruitment and retention, and dual enrollment, while the LAO recommended clearer language on local discretion and use for one-time costs. Members were divided, with some supporting flexibility and others warning that one-time block grants can create instability and confusion for districts.

Transcript Highlights:

• When you see Amazon, UPS, everybody's ordering online, when you see those layoffs coming, you see that's

Bills: HB97, HB280, HB183, HB151, HB202

Keywords: Shaken Baby Syndrome, abusive head trauma, child safety, training and education, healthcare funding, youth internships, workforce development, education, grant funding, employment, drinking water, water quality, environment, public health, water filtration, private well testing, federal funding, childhood sexual abuse, time limitations, civil actions

Summary: The committee took up House Bill 2, the General Appropriations Act, and reviewed the Senate Finance Committee substitute and amendments. Staff described the budget as balanced, with recurring growth of about 2.65% and reserves maintained at roughly 28% if the related disaster reform bill passes. Members discussed the bill’s major spending areas, including health care, child care, public safety, economic development, natural resources, and education, along with technical corrections, cleanup items, and where the public could find the revised bill online. There was also discussion of contingent appropriations that depend on other bills passing, and staff said a hot list of those items would be circulated. Several members asked about specific allocations, including university athletics and facilities funding for UNM and NMSU, tourism, the State Racing Commission, the Spaceport Authority, and school-related items. The committee also discussed reserve levels, oil and corporate income tax revenue assumptions, disaster and fire recovery funding, and concerns about fraud, waste, and abuse in emergency spending. Members raised questions about a Gallup DA funding issue, online school funding, and a personal care/health care item in the Health Care Authority budget. Staff clarified several line items and explained that some appropriations were tied to future legislation or temporary provisions. After debate, the committee adopted the Senate Finance Committee amendments and then voted on the committee report for House Bill 2. The motion to do pass House Bill 2 as amended passed 8-3. The chair noted that the committee would need to return later because of caucuses and the floor schedule, and staff thanked members for the process and preparation.

Transcript Highlights:

• The revolving door of leadership, along with layoffs, office closures, and a disconnected landowner hotline

Bills: HB647, HB791, HB1242, HB1729, HB2003, HB2029, HB2061, HB2775, HB3751, HB4804, HB3611

Keywords: driver's license, vision correction, medical verification, Texas Department of Public Safety, renewal fees, HB 791, Central Catholic High School, San Antonio, specialty license plate, specialty plates, license plate, Texas Department of Motor Vehicles, Transportation Code, general revenue fund, With Loyal Hearts, Catholic school, private school, religious school, school spirit plate, commemorative plate

Transcript Highlights:

• administer the scholarships, taking those people away because cutting operating adjustments means layoffs

Bills: HF2436, HF2929

Keywords: child welfare, economic assistance, child care, grant program, video security cameras, HF2929, SNAP, Supplemental Nutrition Assistance Program, food assistance, nutrition assistance, public benefits, eligibility determination, income eligibility, federal poverty guidelines, poverty level, county agency, Tribal agency, human services, children and families, benefits administration

Bills: HB2323, HB2324, HB1509, HB2164, HB2165, HB2367, HB2619, HB1765, HB2187, HB1864, HB1452, HB2314, HB1898, HB2558, HB2319, HB1643, HB2121

Keywords: workers' compensation, treatment plans, vocational rehabilitation, electronic submission, reporting requirements, occupational safety, hoisting machines, discrimination protection, Department of Labor, safety standards, treatment plan, injured worker, medical treatment authorization, employer response deadline, secure electronic transmission, facsimile, fax, mail submission, denial of care, medical necessity

Summary: The committee heard several administration bills related largely to workers’ compensation and unemployment insurance. On HB 2323 HD1, which would modernize workers’ compensation notice and filing procedures, DLIR and other agencies testified in support of the original bill language but said HD1 removed key components and weakened the bill’s clarity and continuity. HB 2324 HD1, which would repeal state hoisting-machine certification requirements and the separate crane operator certificate, drew support from DLIR; members asked about whether the change would affect safety or local operators, and DLIR said OSHA-compliant certifications already exist and the union supported the change. HB 1509 HD1, which would require faster employer responses to treatment plans and impose penalties for nonresponse, received support from DLIR and others, while DHRD said it wanted an amendment. The committee also took up HB 2164 HD1 on compounded prescription drugs in workers’ compensation. DLIR supported the bill as a way to define compounded drugs and curb inflated pricing, but DHRD and a medical provider opposed it and asked for amendments. Testimony focused heavily on whether the definition should include 503B compounding facilities and whether physician dispensing should be limited to the first 30 days after injury. HB 2165 HD1, dealing with unemployment insurance eligibility and removing the two-year limit on recouping overpayments, was supported by DLIR but opposed by Unite Here Local 5, which argued it would make it harder for striking workers and other claimants. Members questioned the impact of changing reporting deadlines from calendar days to business days and raised concerns about future benefit offsets; DLIR said the bill was needed for federal conformity and that the committee would revisit the offset percentage and effective date. Later, the committee heard HB 2367 on pay transparency, requiring salary ranges in job postings and removing the small-employer exemption. The Hawaii Civil Rights Commission, AAUW, Hawaii Women Lawyers, and an individual testifier supported the bill, saying pay transparency promotes fairness, trust, and pay equity; one testifier described being underpaid compared with a predecessor and said posting ranges would save applicants’ time. HB 2619 HD1, concerning homemade food products and farm kitchens, received generally supportive comments from the Department of Health, which requested an amendment to preserve flexibility in future rulemaking. HB 1765 HD1, on spear-fishing safety warnings, drew support from a safety educator and comments from DLNR; supporters said warning labels would help prevent hypoxic blackout deaths and were low-cost and easy to implement. No votes or final committee actions were taken in the portion of the meeting provided.

Bills: HB14, HB 106, HB146, HB267, HB274, HB 1127, HB1359, HB1393, HB1584, HB1640, HB1710, HB2152, HCR101, HJR8, HR51, HB106, HB146, HB267, HB274, HJR8, HR51

Keywords: nuclear energy, advanced reactors, energy security, grant programs, Texas Advanced Nuclear Energy Office, HB 106, oil and gas, Railroad Commission of Texas, overhead electrical lines, electrical distribution system, power line maintenance, administrative penalty, Natural Resources Code, oil and gas lease, well operator, energy safety, utility infrastructure, regulatory compliance, cleanup fund, oil and gas regulation and cleanup fund

Transcript Highlights:

• The way that those positions were supported with that $200 million and us facing significant layoffs
• respond to the crises, the disasters, the trauma that upend our lives in terrible ways, including mass
• upend our lives in terrible ways, that upend our lives in terrible ways, including<01:30:51.440><c> mass
• casualty</c><01:30:52.480><c> events</c><01:30:53.280><c> such</c><01:30:53.520><c> as</c> including mass
• casualty events such as including mass casualty events such as the<01:30:53.840><c> enunciation</c><

Keywords: 1187, senate, all

Transcript Highlights:

• We don't look at mass data. We don't look at scientific reports.
• Let me finish the layoff here briefly.
• Relating to mass balance attribution of renewable biomass feedstocks used to produce renewable chemicals
• Currently, right now, in many of our counties, companies—very large, mass companies that have huge government
• contracts—currently have seasonal workers that come. ...in mass, of course seasonal, during certain

Bills: HB46, HJR35, HJR47, HJR182, HB 113, HB983, HB4847, HB1449, HB3833, HB5151, HB265, HB1845, HB782, HB 108, HB1960, HB158, HB1954, HB1955, HB2512, HB605, HB2581, HB2803, HB627, HB2667, HB1738, HB636, HB3679, HB2638, HB2655, HB871, HB2438, HB 1107, HB1765, HB1822, HB2153, HB4099, HB3732, HB3171, HB3178, HB3182, HB3749, HB2814, HB3977, HB4204, HB4207, HB4449, HB1820, HB1876, HB1939, HB1347, HB2593, HB2136, HB2132, HB2658, HB2413, HB2757, HB2080, HB3154, HB3063, HB3009, HB3448, HB3006, HB2844, HB3241, HB3680, HB3169, HB2078, HB2507, HB4559, HB3946, HB3460, HB3405, HB475, HB3463, HB3441, HB3520, HB2060, HB4731, HB4991, HB1991, HB5596, HB2014, HB2142, HB2673, HB2731, HB2417, HB2399, HB2301, HB3335, HB3234, HB3320, HB5573, HB4848, HB4748, HB4769, HB4795, HB2086, HB2234, HB2203, HB4916, HB5624, HB4505, HB139, HB5093, HB5302, HB5402, HB5606, HB2333, HB4630, HB4701, HB2583, HB2983, HB4924, HB3339, HB3793, HB3631, HB4882, HB5509, HB5499, HB5430, HB5561, HB5611, HB5043, HB5064, HB3733, HB3781, HB3219, HB32, HB4515, HB5348, HR559, HB4506, HB1646, HB3185, HB3388, HB2761, HB3233, HB1534, HB5129, HB5394, HB3619, HB2867, HB3672, HB2434, HB4903, HB3687, HB3675, HB4609, HB4582, HB3866, HB4534, HB2446, HB3984, HB700, HB4088, HB229, SB2419, SB842, SB1257, SB2550, SB996, HB 1186, HB4327, HB3221, HB2588, SB552, HB4870, HB2494, HB3940, HB4838, HB3177, HB1441, SB1841, HB3962, HB2225, HJR112, HB897, HB2695, HB4670, HB3602, HB3317, HB3717, HB3138, HB3704, HB1403, HJR218, HB4921, SJR37, HJR138, HJR144, HB3892, HB4, HB46, HJR35, HJR47, HJR182, HB4234, HB722, HB4136, HB4105, HB4413, HB170, HB551, HB2858, HB3053, HB3142, HB3180, HB3722, HB2200, HB1794, HB1784, HB1581, HB2530, HB4308, HB1896, HB2974, HB3359, HB4580, HB2458, HB2215, HB3332, HB2278, HB3015, HB3151, HB1368, HB40, HB 101, HB 112, HB146, HB168, HB214, HB413, HB1523, HB493, HB521, HB594, HB557, HB305, HB549, HB854, HB 1057, HB 1052, HB842, HB3174, HB3311, HB2486, HB3196, HB824, HB 1039, HB2529, HB2713, HB4936, HB4995, HB4830, HB4864, HB5219, HB5263, HB5154, HB2674, HB5525, HB5623, HB2545, HB2587, HB2625, HB5520, HB5436, HB4926, HB1573, HB5165, HB4811, HB5081, HB4755, HB3179, HB4310, HB4611, HB2159, HB4626, HB3637, HB3153, HB3066, HB2786, HB2966, HB638, HB640, HB876, HB497, HB5539, HB4809, HB5308, HB4687, HB4070, HB4421, HB4412, HB3284, HB3369, HB3420, HB3449, HB4098, HB4281, HB4120, HB4504, HB4370, HB 1106, HB2370, HB2404, HB3863, HB2407, HB2253, HB2273, HB2040, HB1586, HB3788, HB3993, HB4690, HB4309, HB4696, HB2308, HB 1142, HB1533, HB1621, HB2242, HB2012, HB2193, HB2442, HB2464, HB2348, HB2313, HB2289, HB1942, HB2011, HB1629, HB2993, HB3592, HB3824, HB4076, HB4535, HB4623, HB4773, HB 1091, HB5115, HB5515, HB3372, HB5659, HB 127, HB386, HB 115, HB2868, HB 1249, HB4766, HB3720, HB4656, HB4879, HB 105, HB5383, HB4621, HB5431, HB5678, HB5534, HB4174, HB4212, HB3954, HB3966, HB3636, HB3918, HB1422, HB4765, HB4732, HB4742, HB5122, HB4518, HB5084, HB3986, HB4045, HB4144, HB3911, HB3976, HB4473, HB3425, HB3641, HB3642, HB3475, HB3509, HB3424, HB3383, HB4744, HB4531, HB4539, HB3159, HB5228, HB5370, HB4359, HB4398, HB4443, HB4466, HB3861, HB3849, HB4240, HB4706, HB4685, HB5354, HB5141, HB5686, HB3629, HB3554, HB3567, HB2015, HB3575, HB5381, HB1431, HB3514, HB4614, HB4546, HB4683, HB5681, HB5673, HB5663, HB4271, HB4350, HB4035, HB3807, HB3812, HB3552, HB3540, HB3715, HB3710, HB3664, HB4196, HB4233, HB4173, HB1998, HB3333, HB3510, HB4222, HB2070, HB2854, HB2347, HB 113, HB983, HB4847, HB1449, HB3833, HB5151, HB265, HB1845, HB782, HB 108, HB1960, HB158, HB1954, HB1955, HB2512, HB605, HB2581, HB2803, HB627, HB2667, HB1738, HB636, HB3679, HB2638, HB2655, HB871, HB2438, HB 1107, HB1765, HB1822, HB2153, HB4099, HB3732, HB3171, HB3178, HB3182, HB3749, HB2814, HB3977, HB4204, HB4207, HB4449, HB1820, HB1876, HB1939, HB1347, HB2593, HB2136, HB2132, HB2658, HB2413, HB2757, HB2080, HB3154, HB3063, HB3009, HB3448, HB3006, HB2844, HB3241, HB3680, HB3169, HB2078, HB2507, HB4559, HB3946, HB3460, HB3405, HB475, HB3463, HB3441, HB3520, HB2060, HB4731, HB4991, HB1991, HB5596, HB2014, HB2142, HB2673, HB2731, HB2417, HB2399, HB2301, HB3335, HB3234, HB3320, HB5573, HB4848, HB4748, HB4769, HB4795, HB2086, HB2234, HB2203, HB4916, HB5624, HB4505, HB139, HB5093, HB5302, HB5402, HB5606, HB2333, HB4630, HB4701, HB2583, HB2983, HB4924, HB3339, HB3793, HB3631, HB4882, HB5509, HB5499, HB5430, HB5561, HB5611, HB5043, HB5064, HB3733, HB3781, HB3219, HB32, HB4515, HB5348, HCR76, HCR127, HCR9, HCR40, HCR118, HR559

Keywords: low-THC cannabis, dispensing organization, Texas Compassionate-Use Program, medical use, patient access, registration, healthcare, legislation, Grow Texas fund, economic stabilization, infrastructure, oil and gas, constitutional amendment, severance tax, Texas STRONG defense fund, funding, public health, workforce development, revenue transfer, Veterans' Land Board

Transcript Highlights:

• increasingly replace humans when making decisions about hiring, performance evaluation, promotion, layoffs
• 01:16.160><c> promotion,</c> performance evaluation, promotion, performance evaluation, promotion, layoffs
• job</c><00:01:17.480><c> assignments,</c><00:01:18.360><c> discipline,</c><00:01:18.920><c> or</c> layoffs
• , job assignments, discipline, or layoffs, job assignments, discipline, or termination.<00:01:20.000>

Keywords: 1187, senate, all

Transcript Highlights:

• an additional projected $16.7 million in reductions that would mean hundreds of additional staff layoffs
• reductions that hundreds of additional reductions that hundreds of additional staff<00:30:45.039><c> layoffs
• > that</c><00:30:45.679><c> will</c><00:30:45.840><c> impact</c><00:30:46.159><c> class</c> staff layoffs
• that will impact class staff layoffs that will impact class sizes,<00:30:47.440><c> programs,</c><00

Keywords: 1183, house

Transcript Highlights:

• We have 35-year record highs in teacher layoffs.
• employee we have 35e record highs in employee we have 35e record highs in teacher<00:50:56.240><c> layoff
• </c> teacher layoff teacher layoff you<00:50:57.880><c> had</c><00:50:58.079><c> 50</c><00:50:58.400>

Bills: HF827, HF1258, HF2387, HF2388, HF2534, HF2016

Keywords: education, school funding, consolidation aid, financial support, Minnesota Statutes, education finance, ice arena, school districts, cooperation agreement, equal sports opportunities, school milk program, nutrition, food waste, kindergarten, public schools, supplemental revenue, charter schools, funding, state appropriations, general education funding

Transcript Highlights:

• When school districts throughout the state of California are issuing layoff notices, the Governor is
• When school districts throughout the state of California are issuing layoff notices, the governor is

Keywords: 988, house, all

Transcript Highlights:

• closure over the last several years, and so we do have established processes and practices to mitigate layoffs
• forward-thinking about working with labor and CalHR on how to get individuals placed so that there are no layoffs

Summary: The Senate Committee on Rules first established quorum and took up several routine items, including two governor’s appointments to the Court Reporters Board, references of bills to committees, and floor acknowledgments. Heather Lynn Gonzalez’s appointment was approved 3-1, Allison Salton-Sall’s appointment was approved 4-0, and the other routine items were approved 4-0. The committee then heard testimony on two Department of Corrections and Rehabilitation appointments, Kathleen Ratliff and Joseph Tuggle, both associate directors in the Division of Adult Institutions. Senators focused heavily on the California model, staff safety, prison violence, sexual abuse prevention, retaliation concerns, and visitation. Ratliff and Tuggle said the California model is meant to balance rehabilitation with safety, that CDCR has improved communication and training, and that incidents such as the pepper-spray event at Central California Women’s Facility led to discipline, investigations, retraining, and policy review. They also described PREA reporting systems, anti-retaliation protections, statewide visiting meetings, and efforts to make visiting more family-centered and consistent. Public commenters largely supported both nominees, citing their work on rehabilitation, reentry, and sexual abuse response. The committee unanimously voted 4-0 to send both Ratliff and Tuggle to the Senate floor for confirmation. It then heard from Jason Johnson, nominated as CDCR Undersecretary of Operations. Senators questioned him about parole supervision, public safety, contraband, prison rape prevention, workplace culture, whistleblower retaliation, and repeated allegations in late-filed opposition letters. Johnson said parole risk is assessed through established scoring and supervision levels, that sex offenders are subject to GPS monitoring and treatment, and that operations use investigations, training, and collaboration with law enforcement to address contraband and misconduct. He emphasized rehabilitation, culture change, accountability, and his commitment to staff and public safety, while acknowledging criticism and the difficulty of leading a large institution. No vote on Johnson was taken in the portion provided.

Transcript Highlights:

• And so we do have established processes and practices to mitigate layoffs.
• forward-thinking about working with labor and CalHR on how to get individuals placed so that there are no layoffs

Summary: The Senate Committee on Rules first handled several routine items, including governor’s appointments not required to appear, references to bills, and floor acknowledgments. The committee approved the appointments of Heather Lynn Gonzalez and Allison Salton-Sall to the Court Reporters Board, and then moved on to appointments required to appear from the Department of Corrections and Rehabilitation (CDCR). Kathleen Ratliff and Joseph Tuggle, both proposed associate directors in CDCR’s Division of Adult Institutions, testified about their backgrounds and emphasized staff safety, rehabilitation, trauma-informed practices, and the California model. Senators focused heavily on the rollout of the California model, the August 2024 use-of-force incident at Central California Women’s Facility, sexual abuse prevention, retaliation concerns, and prison visitation. Both nominees said the department had improved communication and training, had disciplined or removed staff in response to misconduct, and was working to strengthen PREA reporting, investigations, and family visiting consistency. Public testimony was strongly supportive, and the committee voted 4-0 to send both nominations to the Senate floor. The committee then heard from Jason Johnson, nominated as CDCR Undersecretary of Operations. Johnson framed his work around rehabilitation, public safety, and culture change, and addressed concerns raised in late opposition letters and a lawsuit alleging retaliation, hostile work environment, discrimination, and whistleblower issues. He said he could not discuss pending litigation in detail, but described his leadership as focused on accountability, professional standards, and improving relationships with staff and community partners. Senators questioned him about parole supervision, risk assessment, contraband interdiction, and the Prison Rape Elimination Act response; Johnson said adult parole uses risk-based supervision and GPS for registered sex offenders, operations is working with correctional safety and law enforcement on contraband and drone interdiction, and CDCR continues to expand reporting channels and training. The committee also discussed the importance of rehabilitation and reentry programs, with Johnson saying most people return to the community and that CDCR must prepare them for successful reintegration.

Transcript Highlights:

• And so we do have established processes and practices to mitigate layoffs.
• forward-thinking about working with labor and CalHR on how to get individuals placed so that there are no layoffs

Keywords: 987, senate, all

Transcript Highlights:

• sustain access to those courses, because they will want to ensure those reserves can be used to avoid layoffs
• sustain access to those courses, because they will want to ensure those reserves can be used to avoid layoffs

Summary: The subcommittee first noted that item one on the Imagination Library update was being pulled pending review of newly received receipts, invoices, and backup documentation from the State Library and the Department of Finance. The chair said the committee would continue reviewing the materials and later determine whether additional oversight and accountability measures are needed regarding taxpayer funds and implementation of the program. The main discussion focused on the California Community Colleges budget request. Chancellor Christian described strong post-pandemic enrollment recovery and asked the Legislature to fund 3% enrollment growth, change the funding formula to use the highest of the three years rather than a three-year average, and remove the 10% growth cap to avoid unfunded FTES. She also urged support for the Governor’s proposals on COLA, deferral repayment, the Common Cloud Data Platform, credit for prior learning, and Calbright College, while adding requests for AI literacy funding, a Rebuild L.A. workforce effort, veterans services, and support for the Chancellor’s Office. Senators raised concerns about high district reserves, part-time faculty conditions, veterans’ credit pathways, and enrollment fraud; Christian said reserves are complex but should be addressed district by district, and that identity verification and AI tools are being used to prevent fraudulent enrollments. Finance and LAO staff then reviewed the student-centered funding formula and enrollment growth proposals. DOF said the Governor’s budget fully repays $408.4 million in deferrals, provides a 2.41% COLA, and includes funding to cover current-year apportionment costs; LAO recommended prioritizing those proposals but suggested beginning enrollment growth funding in 2026-27 rather than revising the current-year target. Chris Ferguson said most districts are growing, that 54 of 72 districts would benefit from a formula change favoring current-year enrollment, and that unfunded growth remains a concern. On facilities, staff explained that deferred maintenance needs are about $2.2 billion, with projects prioritized by life safety, modernization, and capacity needs. The final item was Calbright College. President Menon said Calbright serves more than 6,200 adult learners statewide, with strong completion and wage gains, and asked for the Governor’s proposed $38 million ongoing increase. She and staff emphasized Calbright’s flexible, competency-based model, its partnerships with employers and other colleges, and its role in serving working adults and caregivers. LAO questioned the proposed funding level and recommended moving Calbright onto the student-centered funding formula in the future to better tie funding to enrollment and outcomes, while Calbright argued its structure is different from traditional colleges and needs separate treatment. No votes were taken during the portion of the meeting provided.

Transcript Highlights:

• I had my county hospitals visit me yesterday and explain that they're looking at about 1,300 layoffs
• I had my county hospitals visit me yesterday and explain that they're looking at about 1,300 layoffs

Summary: The Senate Budget and Fiscal Review Committee heard opening remarks on the Governor’s 2026-27 budget, which the chair described as roughly balanced in the budget year but still facing large out-year structural deficits. The vice chair criticized the revenue assumptions as overly optimistic and stressed the need to review recent program expansions and address the state’s $20 billion federal unemployment insurance debt. The Department of Finance said the budget is a “workload” plan with about $350 billion in total spending, $23 billion in reserves, a projected $2.9 billion budget-year deficit, and out-year gaps above $20 billion, while the LAO warned of downside revenue risk tied to stock market volatility and urged earlier action on the structural deficit rather than waiting for May. Finance and the LAO discussed major budget components, including Proposition 98 funding, higher education base increases for UC and CSU, climate and wildfire spending, a new ZEV incentive, child care COLAs, and tax proposals involving marketplace facilitators, renewable aviation fuel, and an extension of the California Competes tax credit. Members raised concerns about proposed Medi-Cal and CalFresh changes tied to federal HR1 impacts, the MCO tax extension, hospital finances, county costs, and the decision not to backfill all federal funding losses. Finance said the administration is not in a position to replace all lost federal funds, but wants to work with the Legislature on priorities and timing before the May Revision. Several senators used the hearing to preview subcommittee priorities and request more detail on spending growth, reserves, and program cuts. Topics included homelessness funding, Care Court throughput, wildfire and climate investments, AB 617, data centers, the judicial branch’s facilities backlog, displaced workers, transit funding, and preparations for the 2028 Olympics and Paralympics. No budget action or vote was taken at this hearing; the committee mainly received presentations and member questions, with public comment scheduled later.

Transcript Highlights:

• with some of the localities and public entities that are already walking down the service reduction, layoff
• with some of the localities and public entities that are already walking down the service reduction, layoff

Summary: The Assembly Budget Committee opened its hearing on the Governor’s 2026-27 budget with remarks emphasizing the start of a months-long process, the need for fiscal responsibility, and concerns about structural deficits, federal funding losses, housing and homelessness, and oversight. The vice chair echoed those concerns, warning against budgets built on short-term fixes and urging accountability. The Department of Finance presented a balanced budget year proposal of about $349 billion in total expenditures, including $248 billion General Fund, while acknowledging a structural imbalance in the out years and proposing a workload budget with limited new spending or cuts. Finance said the budget relies on stronger-than-expected revenues, but also on constitutional obligations such as Proposition 98 and Proposition 2, and on suspending a rainy-day fund true-up deposit to cover a projected $2.9 billion budget-year deficit. The administration highlighted higher education funding, climate and wildfire resilience investments, a new ZEV incentive, added Health and Human Services costs tied to H.R. 1, child care funding, and three tax proposals: third-party delivery tax compliance, a sustainable aviation fuel tax credit, and an extension of the California Competes tax credit. The LAO, by contrast, warned that the budget is “precariously balanced,” cited downside risk from stock market-driven revenues, and urged the Legislature to use reserves, avoid suspending rainy-day deposits, and begin shrinking multi-year deficits sooner rather than later. Member questions focused on wildfire mitigation and insurance, transit and GGRF funding, federal cuts affecting CalFresh and Medi-Cal, the proposed tax credits, homelessness accountability language, and education funding. Several members pressed for earlier partnership on deficit solutions and for more scrutiny of budget choices. The committee also discussed declining enrollment in K-12, community colleges, and CSU, with concerns about whether funding formulas are aligned with actual student demand. No formal votes or final actions were taken in the hearing.

Transcript Highlights:

• I'm also preparing the campus for extensive employee layoffs.
• This will result in thousands of layoffs and will have ripple effects across regional, state, and national

Summary: The Assembly Budget Subcommittee on Education Finance held an extended hearing focused primarily on University of California budget issues, enrollment, housing, and Title IX. Chair David Alvarez opened by noting the governor’s proposed 8% ongoing General Fund reduction to UC, the deferral of compact funding, and the College of the Law budget item, while emphasizing that no votes would be taken that day. Public commenters, including UC Davis employees and lecturers, urged restoration of UC funding and opposed the hiring freeze, saying cuts would worsen staffing shortages, reduce research capacity, and harm students and patients. On UC core operations, the Department of Finance said the governor’s budget maintains the compact but defers $240.8 million in ongoing support and continues a planned 7.95% reduction, while the LAO recommended rejecting the deferrals and instead making any changes in the budget year. UC San Diego’s chancellor and UC Office of the President argued the cuts and deferrals would create major campus shortfalls, force hiring freezes, larger class sizes, fewer course offerings, delayed projects, and possible layoffs. Committee members questioned whether cuts could be shifted away from students and toward administration, discussed UCOP reserves and bond debt, and noted that UC’s budget structure makes the campus-level impact larger than the headline reduction. The committee also reviewed enrollment trends and nonresident replacement. The LAO said UC resident enrollment has grown and recommended revisiting 2026-27 targets and pausing the nonresident replacement plan if state funding does not improve. UC said it has exceeded California undergraduate enrollment and nonresident replacement goals, but warned that continued growth without funding would force enrollment reductions and harm quality. Members discussed the role of nonresident and international students, tuition rates, and the value of UC as a pathway for California students and a source of talent for the state. A separate housing item covered the state’s Higher Education Student Housing Grant Program. UC reported that recent bond savings could support additional affordable beds at UC Davis and UC Santa Barbara, but the LAO and Finance noted the Legislature would need to decide how to use the $6.2 million in savings from the original projects. The committee also heard a Title IX update from UC’s systemwide civil rights office, which described campus Title IX structures, training, and policy enforcement, and said the system has been working to improve confidentiality guidance and streamline complaint processes after survey feedback showed confusion and lengthy procedures.

Transcript Highlights:

• While the big companies have had layoffs, Clearly AI has created jobs here.

Bills: SB5893, SB6229, HB1376, SGA9306

Keywords: forest health, wildfire reduction, appropriations, environmental policy, natural resource management, capital gains, taxation, small business, state revenue, investment, economic growth, tax prepayment, tax regulation, financial planning, economic policy, 904, all

Summary: The Ways and Means Committee began with a hearing on the governor’s appointment of Kristen L. Frazier to the Board of Tax Appeals. Frazier described her long career as House fiscal counsel, her teaching and writing on Washington constitutional law, and her recent service on the board. Members praised her experience and confirmed they would vote on the appointment at a later meeting. The committee then heard Senate Bill 5893, which would transfer $65 million from the Natural Climate Solutions Account to the Wildfire Response, Forest Restoration, and Community Resilience Account to help fully fund wildfire response and forest health work. Staff explained the bill’s relationship to prior Climate Commitment Act and wildfire-resilience funding, and testimony from forest landowners, industry groups, and the Department of Natural Resources strongly supported the measure as necessary for wildfire suppression, forest thinning, and community protection. DNR said the funding would support current strategies and avoid major cuts to firefighting, detection, and partner pass-throughs. Next, the committee heard Senate Bill 6229, which would remove the state capital gains tax exemption for gains from qualified small business stock beginning in 2026. Staff estimated the bill would affect about 260 taxpayers and raise about $1.2 million in fiscal year 2027. Startup founders, venture capital representatives, and tech industry groups opposed the bill, arguing it would discourage entrepreneurship, investment, and job creation; a policy advocate supported it as a way to make the tax code less regressive and raise revenue from wealthy taxpayers. The committee also heard House Bill 1376, which would allow taxpayers to prepay capital gains tax up to six months early without interest; testimony was brief and opposed the bill as an additional tax burden. In executive session, the committee received briefings on a proposed substitute for Senate Bill 5395 on prior authorization transparency and AI use in health care, and on Substitute Senate Bill 5860 regarding school board compensation. The committee adopted the proposed second substitute for SB 5395 and voted it do pass to the Rules Committee. It then moved SB 5860 without recommendation to the Rules Committee. The meeting adjourned after those actions.