To help cope with the state’s impending cash crunch, the California Department of Finance (DOF) has proposed controversial trailer bill language that would give the DOF complete discretion to defer payments to state programs, vendors and taxpayers including payments to California taxpayers for tax refunds, the University of California, Medi-Cal payments to providers, SSI/SSP welfare payments, CalWORKs welfare payments, K-12 education and more.
The trailer bill language was submitted to Legislative Counsel last week and presented to lawmakers in an Assembly Budget Committee hearing on February 3, 2010. DOF representatives said they needed the authority to act quickly to realize cost savings.
“We think it’s way too broad,” said Legislative Analyst Mac Taylor, who encouraged the Legislature to narrow the authority granted to the DOF and make it more discrete.
Taylor said giving the DOF such authority would create a problem for K-12 schools and other state programs that depend on state funding by not allowing them to plan ahead. “What are the schools supposed to do if they know the Dept. of Finance can take money at any time?” Taylor said.
Taylor said he thought the Legislature should make choices about intra-year payment deferals to meet cash obligations and grant specific authority under certain windows of time.
Assembly Budget Committee chair Noreen Evans (D) was also skeptical. She asked if the DOF had ever been given this type of authority and DOF representatives said no. Evans described it as a “historic request” and said she was “skeptical” because it was essentially a “blank check.” Evans was not comfortable with the DOF having the authority to decide which programs to not fund.
KC has requested the trailer bill language but it is not clear if it has been made public yet or not.