Transcript Highlights:

• Does that savings go back into the General Fund, or does it stay with the prison system? Yes.
• going to create a more efficient CDCR and lead to General Fund savings.
• But just to note that as their vacancy savings have declined, it's become a less stable fund source,
• We expect net General Fund savings in the next year at $99.6 million.
• We expect net general fund savings in the next year at 99.6 million.

Summary: The subcommittee heard an overview from the Board of State and Community Corrections on its budget change proposal for 11 additional permanent positions, which BSCC said are needed to manage a rapidly expanded grant workload, increase technical assistance, and strengthen oversight and audits. BSCC also updated members on its new In Custody Death Review Division, created under SB 519, reporting that it has begun collecting and reviewing local jail death investigations, has hired about one-third of its staff, and has received access to medical records and related documents. Members raised concerns about family notification practices, local jail deaths, and whether BSCC’s increased administrative use would reduce grant dollars; BSCC said the change is intended to be permanent but should not substantially affect local assistance. The LAO supported the position authority request but flagged a methodological issue in the administration’s Proposition 47 savings estimate, and Finance said it would update the estimate by May Revision. The committee then reviewed CDCR’s overall budget, population, and facility issues. The Secretary said the incarcerated population is holding around 90,000, parole around 33,000, and described major cost pressures from retirements, workers’ compensation, medical transport, violence, and aging infrastructure lacking air conditioning and ADA features. He defended prison closures as creating overcrowding and reducing programming capacity, while also highlighting successes such as declining recidivism, expanded college and reentry programming, and the completion of the San Quentin Rehabilitation Center. Members pressed CDCR on fiscal discipline, the effect of closures on savings, community impacts from prison shutdowns, vacancy and staffing issues, and climate-related facility needs. CDCR said it clusters medically vulnerable and ADA-needing populations at more suitable facilities, uses heat plans and temperature monitoring, and is developing a 20-year infrastructure plan. A separate item addressed CDCR’s request for $91 million ongoing for lump-sum leave payouts for correctional officers and nurses. CDCR said these costs have historically been covered by vacancy savings, but declining vacancies and facility closures have reduced that source. The LAO said the funding is reasonable in the near term but recommended limited-term approval with reporting, and urged the Legislature to scrutinize unallocated savings assumptions and the ongoing Boston Consulting Group efficiency contract. Finance argued the lump-sum request should be ongoing because the costs are recurring and vacancy savings are less reliable. Members questioned whether CDCR is doing enough to reduce leave liability and whether the department will actually achieve the budgeted savings from the consultant work. Finally, CDCR presented updated population projections through June 2030, estimating a 6.5 percent decline in the institution population and a 10.4 percent decline in parole, while revising its Proposition 36 methodology based on actual admissions data. CDCR said Prop. 36 admissions are increasing but at a lower level than previously projected, and that the law’s long-term effects remain uncertain. On the California Rehabilitation Center closure, CDCR projected about $99.6 million in net General Fund savings next year and roughly $150 million ongoing, with 522 positions eliminated. The LAO said the state could close another prison within a few years and identified the Correctional Training Facility in Soledad as a strong candidate, recommending against approving new capital projects there unless another closure is identified. Finance said the administration has not proposed any additional closure at this time.

Transcript Highlights:

• TSP values the energy savings when it happens and encourages longer-term savings.
• happen and how long that saving lasts.
• happen and how long that saving lasts.
• If the decision is made to move these funds to the General Fund, and the fluctuating state budget is
• Moving energy efficiency funding to the General Fund at a time when GGRF auction proceeds are unstable

Committee: House Utilities and Energy

Transcript Highlights:

• Does that savings go back into the General Fund, or does it stay with the prison system?
• But just to note that as their vacancy savings have declined, it's become a less stable fund source,
• We expect net General Fund savings in the next year at $99.6 million. into account population needs for
• We expect net general fund savings in the next year at 99.6 million.
• General Fund savings in the next year is $99.6 million, with the elimination of 522 positions, and ongoing

Transcript Highlights:

• It would increase the maximum size of the Rainy Day Fund from 10% of general fund revenues to 20% of
• general fund revenues.
• Fund... ...capital gains in excess of 8 percent of total General Fund taxes.
• And so what we're saying now is that we should treat that savings as savings, not as an expenditure.
• We're going to put it in savings.

Summary: The Assembly Budget Subcommittee on Accountability and Oversight heard ACA 20, the Safe for California Futures Act, a constitutional amendment to strengthen the state’s Budget Stabilization Account (rainy day fund). The authors, Assembly Members Gabriel and Valencia, said the measure would raise the reserve cap from 10% to 20% of General Fund revenues, change how reserve deposits are treated under the Gann limit so deposits would not count against the spending cap until withdrawn, and update eligible debt repayments to include items such as budget loans, Proposition 98 settle-up obligations, and unemployment insurance debt. They emphasized that the proposal was intended to protect schools and core public services and to help California better withstand revenue volatility and future downturns. Committee discussion focused heavily on the technical effects of the measure, especially its interaction with Proposition 98 and the Gann limit. LAO and Department of Finance staff explained that Prop. 98 funding would not be changed directly, that the reserve deposits would be treated as exclusions from the appropriations limit, and that withdrawals would count when spent. Members asked about current reserve levels, mandatory deposits, and whether the measure would create more room for discretionary spending; supporters argued it would simply allow the state to save more in good years, while one member expressed concern that it could function as a slush fund and expand spending opportunities. Several members cited recent budget volatility, record revenues, and the need for stronger reserves, while others stressed that the measure should be understood as a future-oriented savings reform rather than a response to this year’s budget choices. Public testimony was uniformly supportive. California Forward, Elevate California, and the California Chamber of Commerce all backed the proposal, with the Chamber noting support for the policy and highlighting the importance of addressing unemployment insurance debt for small businesses. The chair concluded by thanking the authors, staff, and witnesses, and said ACA 20 was expected to move to the Assembly floor the next day.

Transcript Highlights:

• TSP values the energy savings when it happens and encourages longer-term savings.
• happen and how long that saving lasts.
• happen and how long that saving lasts.
• At San Jose Clean Energy, our PPP-funded programs have delivered more than $13 million in customer savings
• Moving energy efficiency funding to the General Fund at a time when GGRF auction proceeds are unstable

Summary: The Assembly Committee on Utilities and Energy held a hearing on how California Public Utilities Commission energy efficiency programs are budgeted, evaluated, and measured for cost-effectiveness. The chair framed the issue as not whether energy efficiency works, but how to ensure ratepayer-funded programs continue to deliver value as the portfolio has shifted from simple measures like lighting to more complex retrofits, electrification, workforce, and equity programs. CPUC staff outlined the statutory framework, the four-year budget cycle, recent spending of about $795 million in 2025, and the use of total system benefit (TSB) and the total resource cost (TRC) test, noting that some programs are exempt from cost-effectiveness requirements at the individual program level but not at the resource acquisition portfolio level. Utility, regional network, implementer, and advocacy witnesses offered differing views on the current metrics. PG&E described its portfolio as cost-effective overall and argued that cost-effectiveness should remain at the portfolio level to allow innovation and multi-year program flexibility. SoCalREN and the Energy Coalition emphasized the value of local government delivery, equity-focused programs, and the need to credit programs for broader benefits such as workforce development, market transformation, and electrification. The Public Advocates Office argued that ratepayer-funded programs should produce benefits greater than costs and raised concerns about the growing share of budgets going to programs that have not met cost-effectiveness thresholds. Several witnesses said the current math is too complicated and that different program types may need different metrics. Committee members repeatedly pressed witnesses on the complexity of the TRC and TSB calculations, the treatment of participant costs, and whether the state should use a simpler or more transparent framework. CPUC staff said the relevant issues are already being addressed in two open proceedings, with one budget application proceeding expected to conclude in roughly the second or third quarter of next year and a broader policy rulemaking ongoing. No votes were taken and no formal action was reported; the hearing functioned as an informational discussion and policy review.

Transcript Highlights:

• Does that savings go back into the General Fund, or does it stay with the prison system? Yes.
• they're going to create a more efficient ...more efficient CDCR and lead to General Fund savings.
• But just to note that as their vacancy savings have declined, it's become a less stable fund source,
• We expect net General Fund savings in the next year at $99.6 million.
• General Fund savings in the next year is $99.6 million, with the elimination of 522 positions, and then

Summary: The Senate Budget Subcommittee on Corrections, Public Safety, Judiciary, Labor, and Transportation heard an overview from the Board of State and Community Corrections (BSCC) on its budget change proposal and grant administration. BSCC requested authority for 11 additional permanent positions to handle a workload that has nearly tripled over five to seven years, with more than 600 grant agreements and about $1.5 billion in grant funds in the field. The board also reported on its new In-Custody Death Review Division, which has collected data since July 2024 and received 136 jail death reports; staff said the division is still building out reviews and has identified overdose, natural causes, and suicide by hanging as the leading manners of death. Members raised concerns about family notification practices, oversight of local grants, and the impact of taking more administrative funds from local assistance, while the LAO and Department of Finance did not oppose the position request but urged correction of the administration’s Proposition 47 savings methodology before May Revision. The committee then reviewed CDCR’s overall budget and operations. Secretary Jeffrey Macomber described a relatively steady prison and parole population, ongoing structural budget pressures from retirement payouts, workers’ compensation, medical transport, violence, and aging facilities lacking air conditioning and ADA features. He emphasized rehabilitation, recidivism reduction, college programming, and the department’s 20-year infrastructure planning effort, while also defending the closure of the California Rehabilitation Center and warning that additional closures can increase overcrowding, double-celling, and waitlists for programming. Senators pressed CDCR on fiscal discipline, vacancy savings, staffing shortages in medical and mental health classifications, the use of tablets for incarcerated people, and community impacts from prison closures, including the Norco site. A separate item focused on CDCR’s request for $91 million ongoing for lump-sum leave payouts to separating correctional officers and nurses. CDCR said these costs had historically been covered by vacancy savings, but lower vacancy levels and facility closures have reduced that funding source. The LAO supported the funding only on a limited-term basis with reporting, arguing the need may change as the system reaches a new normal, and also urged the Legislature to scrutinize the broader structural shortfall and the Boston Consulting Group efficiency contract. Finance supported ongoing funding, saying the costs are recurring and vacancy savings are less reliable. The committee also discussed CDCR’s fall 2025 population projections, which forecast a 6.5% decline in the institution population and a 10.4% decline in parole over five years, while updating Proposition 36 assumptions based on actual admissions data. CDCR and Finance said the California Rehabilitation Center closure would generate savings and that no additional prison closure had been formally proposed, though the LAO argued the state could close another prison and recommended not funding certain Soledad projects unless another closure is identified.

Transcript Highlights:

• It would increase the maximum size of the Rainy Day Fund from 10% of General Fund revenues to 20% of
• General Fund revenues.
• Fund... ...capital gains in excess of 8 percent of total General Fund taxes.
• And so what we're saying now is that we should treat that savings as savings, not as an expenditure.
• We're going to put it in savings.

Transcript Highlights:

• So the updated savings associated with the proposal would be $13 million General Fund.
• for DSS of $75 million General Fund in 2025-26, and growing to $500 million General Fund savings in
• for DSS of 75 million general fund in 25, 26, and growing to 500 million general fund savings in 28
• So we're working to share additional. general fund savings in 28 to 29.
• To be clear, yeah, the $18.2 million in funding is savings that normally county staff would utilize,

Summary: The hearing began with opening remarks on the Governor’s May Revision for child care and human services, with committee members and advocates stressing that the budget should not be balanced on the backs of low-income families, children, and providers. Legislative members and public witnesses strongly opposed the proposed suspension of the child care COLA, reductions to the Emergency Child Care Bridge Program, and the lack of codified rate reform tied to the alternative methodology. Several speakers also urged more support for providers affected by the Eaton fire and other disasters, and called for child care to be funded at the true cost of care and for additional slots to be restored. Administration, LAO, and Department of Education staff described the child care proposal as maintaining existing funding levels while adding administrative resources to prepare for federally required prospective payment changes and single-rate reform. The administration said the May Revision would suspend the 2025–26 COLA and reduce Bridge Program funding to align with utilization, while the LAO raised questions about the size and purpose of the proposed rate-reform and prospective-payment funding and recommended rejecting a Department of Technology exemption. CDE supported continued early education investments but said it would need additional resources if prospective pay were extended to state preschool, and it objected to a proposed reallocation of preschool funds for inclusive education grants. The committee then moved to the IHSS portion of the May Revision. DSS outlined five major proposals: capping provider work hours at 50 per week, eliminating IHSS for undocumented adults age 19 and older, shifting certain Community First Choice reassessment penalties to counties, reinstating the Medi-Cal asset test as a conforming IHSS reduction, and automating the termination of IHSS when Medi-Cal eligibility ends. DSS also discussed funding to implement a federal HCBS access rule and a separate reassessment of IHSS administrative methodology that found counties would need additional administrative funding. Finance said the proposals were intended to slow program growth and improve sustainability, while the LAO said it was still analyzing the package and raised concerns about implementation, county workload, and the potential loss of services. Committee members and public commenters criticized the IHSS cuts, especially the overtime cap and the elimination of services for undocumented adults and people affected by the asset test. Advocates argued that IHSS workers and recipients depend on these services, that county administration is already underfunded, and that the proposals could destabilize vulnerable consumers. The chair closed by saying the committee would continue to fight for child care and would not pause on child care, and the meeting recessed before moving on to the remaining May Revision items.

Transcript Highlights:

• It was for protecting misuse of funds.
• a $10 savings.
• The goal of this bill is to protect our pension funds, base the funds on performance, not on politics
• The goal of this bill is to protect our pension funds, base the funds, is to protect our pension funds
• Senator Buller, just for the record, would you state the funding levels, current funding levels of each

Bills: SB1415 , SB1714 , SB1962 , SB26 , SB172

Committee: Senate Retirement and Government Resources

Summary: The Committee on Retirement and Government Resources heard several bills dealing with state employment, purchasing, and retirement policy. Senate Bill 1415, by Senator Brooks, would prohibit nondisclosure agreements when a state employee resigns or is terminated, with exceptions for statutorily protected confidentiality such as physician or attorney privilege. Members questioned how the bill would interact with whistleblower protections and sensitive information, but the bill passed 6-1. The committee then considered Senate Bill 1714, by Senator Jett, which would expand an existing state employee suggestion/incentive program to encourage agencies to identify cost savings and efficiencies, require agencies to review recommendations in good faith, and report back on accepted or rejected ideas. Members raised concerns about open meetings, employee notification, written documentation of suggestions, and possible disputes over the value of savings. The author agreed to work on amendments, the title was struck, and the bill passed as amended 5-2. Senate Bill 1962, by Senator Bullard, would move certain purchasing exemptions out of statute and into the administrative rules process so exemptions must be periodically renewed and justified. Supporters said this would reduce personality-driven exemptions and improve oversight, while concerns were raised about ongoing needs and emergency situations. The bill passed unanimously 7-0. The committee also passed Senate Bill 26, which would allow retired teachers to return to work after a 90-day break with a salary set by local districts and a 3% contribution back to the retirement system, and Senate Bill 172, which would tie cost-of-living adjustments for pension systems to funding benchmarks and a rolling average, rather than legislative discretion; both bills passed, with SB 26 passing 7-0 and SB 172 passing 6-1. The chair noted the committee expected at least one more meeting and hoped to finish the following week.

Transcript Highlights:

• This would save about $43.8 million ongoing General Fund and $30.1 million in 2025-26.
• There are General Fund savings from no longer covering community supports.
• For community supports, we estimate $26.9 million General Fund savings in 2026-27.
• general fund savings in 2627, 58.8 million in 2728 and 2728 and 51 million ongoing.
• fund savings in 26, 27, and 99 million ongoing.

Transcript Highlights:

• It was for protecting misuse of funds.
• it's a $10 savings.
• Fund would actually require a 3% commitment back into the TrS fund, which they're not going to get back
• The goal of this bill is to protect our pension funds, base the funds on performance rather than politics
• I also disagree in the fact that we keep on some of these funds, firefighter fund for example, if We

Bills: SB1415 , SB1714 , SB1962 , SB26 , SB172

Committee: Senate Retirement and Government Resources

Keywords: nondisclosure agreements, state employment, employee rights, transparency, government accountability, employee suggestions, cost savings, state agencies, incentives, performance awards, efficiency, Oklahoma Central Purchasing Act, state procurement, state purchasing, State Purchasing Director, Office of Management and Enterprise Services, OMES, exempt entities, purchasing exemptions, state contracts

Transcript Highlights:

• Law Fund.
• savings.
• We use a marginal cost, and then we basically fund counties for those state savings that would have otherwise
• fund in 1.2BH-S-A-F funding, which is Behavioral Health Services Act, and 37. fund in 1.2 BHSAF funding
• First, the VOCA funding, $25 million General Fund.

Summary: Assembly Budget Subcommittee No. 6 heard the Governor’s May Revision proposals for the judicial branch, the Board of State and Community Corrections, the Department of Justice, and the California Department of Corrections and Rehabilitation. The Legislative Analyst’s Office opened with a warning that the state budget remains structurally imbalanced and urged the Legislature to avoid new ongoing spending unless offset by reductions elsewhere. In the judicial branch discussion, the Judicial Council highlighted language access funding, appellate court security, a backfill for the state court facilities construction fund, and an extension of the lactation room mandate; Finance supported most items but suggested reporting language on interpreter costs and reducing the General Fund backfill. Members raised concerns about judicial vacancies, long-term salary freezes, remote hearings, and the lack of progress on court staffing in some counties. For the Board of State and Community Corrections, the administration proposed $10 million one-time each for the Missing and Murdered Indigenous People grant program and a human trafficking vertical prosecution grant program. The LAO said both should be weighed against other priorities and suggested the Legislature consider whether the Tribal Nations Grant Fund could support MMIP work, while Finance said it preferred General Fund support and wanted more review before any fund swap. Members strongly supported MMIP funding and asked whether ongoing support would be considered. On the human trafficking grant, Finance said BSC was a good fit because of its grant administration experience and prior vertical prosecution work, while legislators asked why the program was not placed with the Office of Emergency Services as originally contemplated in prior legislation. The Department of Justice presented antitrust litigation funding, Medi-Cal Fraud and Elder Abuse staffing, completion of organized retail criminal enterprise cases, and trailer bill language for a continuous appropriation from the Victims of Consumer Fraud Restitution Fund. The LAO supported the antitrust account use but questioned the Unfair Competition Law Fund’s ability to cover the full request without General Fund repayment, and recommended against a continuous appropriation for the restitution fund in favor of a more limited mechanism with legislative oversight. Finance said the fund would remain solvent and defended the continuous appropriation as necessary to pay victims promptly. In the CDCR portion, the largest discussion centered on the Boston Consulting Group efficiency review and sharply reduced savings estimates; LAO said the department had not fully explained the proposed position eliminations or future $100 million savings target, while Finance said the work reflected deeper analysis and ongoing efforts to find savings. Members repeatedly pressed CDCR and Finance on the gap between earlier promised savings and the revised figures. CDCR also outlined population projections showing continued declines in prison and parole populations, while LAO again urged the state to close an additional prison to save ongoing costs. The department then walked through several May Revision items, including workers’ compensation funding, a Corcoran honor housing dorm, incarcerated firefighter pay implementation, an incarcerated menopause program, mental health receiver staffing, mental health resource teams and crisis intervention teams, medical classification staffing changes, and AI note-taking for the electronic health record. LAO generally recommended limiting-term funding and more reporting for many of these proposals, while Finance defended them as necessary ongoing investments or court-ordered obligations. Members questioned the cost of workers’ compensation, the need for more prison closures, the lack of funding for women’s facility violence prevention, and the timing and transparency of the BCG savings process. No votes were taken.

Transcript Highlights:

• This would save about $43.8 million ongoing General Fund and $30.1 million in 2025-26.
• There are General Fund savings from no longer covering community supports.
• For community supports, we estimate $26.9 million General Fund savings in 2026-27.
• general fund savings in 2627, 58.8 million in 2728 and 2728 and 51 million ongoing.
• Fund savings in 2026-27 and $99 million ongoing.

Summary: The committee first heard May Revision child care and human services items. The Department of Child Support Services described two technical adjustments, which the analyst supported. The Department of Social Services then walked through child care proposals, including a reduction in federal and Proposition 64 funding absorbed through a shift from General Child Care to the Alternative Payment program, a 2.01% child care COLA, disaster-related infrastructure grants, a new administrative support cost structure for Alternative Payment agencies, the removal of prospective pay funding after a federal rule change, a reappropriation for existing infrastructure grants, and estimates of unspent child care funds. The Legislative Analyst’s Office recommended asking for more justification for shifting reductions to CAP, supported the COLA reduction but wanted consistency across programs, recommended removing prospective pay funding, opposed the administrative cost shift, and suggested further review of disaster grant alignment. Members pressed the administration on why more slots would be cut for the same savings, why the COLA was reduced, and whether the administrative percentage would grow over time. The administration said the changes were intended to avoid disrupting currently enrolled families, reflect point-in-time relinquishments and unspent funds, and stabilize contractor operations. Public commenters, including providers, advocates, and county representatives, urged full COLA funding, rejection of child care slot reductions, preservation of prospective pay, and continued investment in child care infrastructure and access. The subcommittee then recessed before moving to health items. In Part B, the Department of State Hospitals presented its May Revision proposals, including a central utility plant replacement project at Metropolitan State Hospital, funding for a continuum electronic health record system, reduced county bed billing authority to reflect phase-in of additional LPS beds, limited contract exemption authority for online clinical subscription services, reversion of prior-year unspent operating funds, and a workforce development proposal to use Behavioral Health Services Act funds instead of General Fund for training programs. The department said the EHR would modernize records and improve continuity of care, and that the contract exemption would prevent delays in essential clinical information services. No votes were taken in the excerpt provided.

Transcript Highlights:

• or to suspend funds into... ...to either withdraw funds from the BSA or to suspend funds into the BSA
• And then how are the funds invested in the rainy day fund?
• The Rainy Day Fund.
• Two, it increases the required contribution from the General Fund, ensuring that we save more when revenues
• It increases the required contribution from the general fund, ensuring that we save more when revenues

Summary: The Assembly Budget Subcommittee on Accountability and Oversight held a hearing on proposals to reform California’s Budget Stabilization Account, or rainy day fund, ahead of the May Revision. Members and witnesses reviewed how Proposition 2 (2014) changed reserve rules, including mandatory deposits, a 10% cap on the fund, and limits tied to the Governor’s declaration of a budget emergency. LAO staff explained that California’s revenues are highly volatile, that current reserve rules are complicated by interactions with Proposition 98 and the Gann limit, and that under current law reserves would cover only about one-third of funding shortfalls in a benchmark scenario over 50 years. The LAO presented its report recommending a larger reserve target, including raising the cap to 50% by 2055 and pairing that with either broader, more flexible deposit rules or a simpler approach that deposits all excess capital gains. The Department of Finance described the Governor’s proposal to raise the cap from 10% to 20% and exempt BSA deposits from the state appropriations limit, while Assembly Member Valencia presented ACA 1, which would make similar changes and was described as an evolving proposal. Testimony generally supported saving more during boom years, but differed on how much to hardwire into the Constitution versus leave flexible, and on whether to broaden the deposit formulas beyond capital gains. Public witnesses and committee members raised additional issues, including whether reserve reforms should also address debt repayment, the treatment of unemployment insurance fund debt, and whether the Gann limit should be adjusted to better allow reserve growth. Supporters argued that stronger reserves would protect Californians from cuts during downturns and help the state weather volatility and federal funding threats. Some advocates warned that reforms should not come at the expense of current public needs, while taxpayer representatives cautioned against turning the BSA into a pass-through account that weakens constitutional spending limits. The hearing ended without a vote, with the committee chair noting the complexity of the issue and adjourning after public comment.

Transcript Highlights:

• We're proposing to not fund the program at this time and achieve that. at savings in the next fiscal
• about these solutions we're looking for savings that have not yet reverted to the general fund or funds
• Fund to the State Court Facilities Construction Fund, thereby reducing the general fund backfill needed
• unencumbered funds.
• funding saves lives every day.

Transcript Highlights:

• We’re proposing not to fund the program at this time and achieve that savings in the next fiscal year
• Fund or funds that have not yet been encumbered.
• This Victims of Crime Act funding saves... we have. Because the salaries are not competitive.
• This victims of crime act funding saves, Funding ask.
• This Victims of Crime Act funding saves lives every day. Thank you for your comments.

Summary: The subcommittee heard May Revision presentations for the Office of Emergency Services, Judicial Branch, CDCR, and the Department of Justice, with the LAO offering comments and recommendations throughout. For Cal OES, the administration outlined funding for relocating the Red Mountain communications site, increased FEMA reimbursement authority, cybersecurity grants, next-generation 911 support, and a reduction to the Flexible Cash Assistance for Survivors of Crime program. Members raised concerns about VOCA backfill and disaster reimbursement, while the LAO recommended approving the 911 request with reporting, adding contingency planning for cybersecurity grants, clarifying the FEMA reimbursement language, and increasing reporting on emergency spending. For the Judicial Branch, the May Revision included funding for implementation of the Trial Nations Access to Justice Act, reductions tied to court facilities and employee benefits, and General Fund solutions such as a reduction to the pretrial release program, a reversion from the Trial Court Trust Fund, and elimination of the jury duty pilot program. The LAO cautioned that the pretrial reduction could affect detention and release decisions and recommended tighter legislative oversight over the trust fund transfer and reallocation language. Members questioned the impact of the pretrial cut, the lack of Prop. 36 court funding, and the rationale for the jury pilot elimination; the Judicial Branch said it was generally supportive of the budget as proposed. CDCR presented requests for roof repairs, fire alarm replacements, CalAIM-related costs, and trailer bill changes on incarcerated college students, mental health hiring, and tuberculosis testing, along with a planned prison closure by October 2026. The department also proposed reducing or delaying several items, including radio replacement, ADA improvements, COVID mitigation, and some facility upgrades, while adding a $125 million placeholder for consultant-driven operational savings. The LAO recommended rejecting or reducing several San Quentin-related proposals, questioned the staffing and contract medical requests, and urged more transparency on the consultant savings plan; members expressed concern about the realism of the savings targets and the potential legal or operational risks from delaying ADA and radio projects. For DOJ, the May Revision proposed ongoing funding and 44 positions to defend against federal actions, IT and accounting system upgrades, implementation funding for AB 1877, and a special fund loan. The LAO supported the KLETS connection but asked for a contingency plan if the new DMV link is delayed, noted that AB 1877 would not be fully implemented without additional funding, and recommended limiting and reporting on the federal accountability workload. Members questioned the size and permanence of the DOJ request, the use of the earlier $25 million special session appropriation, and the pace of federal litigation; DOJ said the new request would support ongoing litigation, expert assistance, and coordination across multiple cases and states.

Transcript Highlights:

• So the updated savings associated with the proposal would be $13 million general fund.
• So the savings associated with this proposal are the federal funds. funds being restored as people restore
• for DSS of $75 million general fund in 25-26 and growing to $500 million general fund savings in 28-
• Right, to be clear, yeah, the 8.2 funding is savings that normally county staff would utilize, would
• It is all state funding, so general funds, so not scoring any savings that would be collected from the

Transcript Highlights:

• It is funded by a portion of the NLX funding, $77 million, and it realizes $22 million in savings that
• That's just from the general fund.
• It appropriates $100 general fund.
• </c><00:03:33.440><c> special</c> general fund funds out of the special general fund funds out of the
• So just funding the cancellation.

Committee: House Ways and Means

Transcript Highlights:

• It's not the state general funds.
• Of the previously mentioned 211 projects funded throughout the water conservation grant fund, 15 of them
• and the Drinking Water Revolving Fund.
• The funding mechanism to handle these loans would specifically be the Clean Water State Revolving Fund
• Funding to address these exists.

Committee: House House Natural Resources, Energy & Water Committee of Reference

Summary: The House Committee on Natural Resources, Energy and Water heard three bills related to the Water Infrastructure Finance Authority (WIFA) and water conservation funding. HB 2029 would require grant applicants to provide additional information about how water-conservation grant funds will be used, including expected long-term water savings, efficiency improvements, or reliability benefits. WIFA testified neutral, saying most of the information is already collected in agency policy and that the program is voluntary and reimbursement-based. The bill passed 9-1 with a due pass recommendation. HB 2030 would remove education and research programs from the list of allowable uses for the water conservation grant fund. Committee discussion focused on how much funding had gone to education/research projects and whether those projects still produced meaningful water savings. WIFA said about 15 projects with education or research components received roughly $10.5 million and were associated with an estimated 180,000 acre-feet in savings, though those savings were projections and the projects were not purely educational. Several members opposed removing those categories, but the bill passed 6-4 with a due pass recommendation. HB 2096 would expand WIFA financing to include remediation, closure, or replacement of cesspools that threaten groundwater, surface water, or public health, and would allow counties to use revolving-fund financing and income-based assistance for such projects. County and association witnesses supported the bill, describing the public health risks of aging cesspools and the need to help homeowners afford replacement systems; ADEQ was neutral. WIFA said the bill clarifies county authority to enter loans for this purpose and noted the funding would come from existing federal revolving-fund resources. The bill passed unanimously, 10-0, with a due pass recommendation, and the meeting adjourned.

Transcript Highlights:

• Law Fund.
• Law Fund.
• savings.
• We use a marginal cost, and then we basically fund counties for the state savings that would have otherwise
• million, as was requested previously and as was funded previously, and that was critical in saving off