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Commentary: Capitol sausage making: How the budget is crafted

Issue Date: January 19, 2022
By Taylor Roschen
Taylor Roschen
Gov. Gavin Newsom presents his $286.4 billion California budget plan Jan. 10. It’s the first step in a long budget process involving legislative leaders, committee staff and powerful interest groups.
Photo/California Governor’s Office

It may not be fair to say the California state budget is still developed in smoke-filled rooms with handshake deals between cigar-chewing party bosses. We've come a long way in the interest of transparency and public participation. But the process is still enigmatic, to say the least.

So, even though the future of hog farming in the U.S. may be in question, let's talk about how California's budget sausage is made—and you decide if it is humane.

Every January, the governor releases his proposed budget. It's his first shot, based on how much money he thinks he has, to outline political themes and priorities he hopes will guide the Legislature. While the budget draft is released in January, the process actually starts much earlier.

Throughout the fall and winter of the prior year, the governor asks his agencies and departments to submit requests—known as budget change proposals, or BCPs—for what they want and what they need.

Through an often long and frustrating battle with the Department of Finance—still another sausage grinder—the proposals that prevail make their way into the January budget. Like a chef adding the extra finishing touches of herbs and spices, the governor sprinkles in his pet projects and favored requests. And, with an anticipated $45.7 billion surplus this year, he adds a bit more pork.

Now we're cooking. Through the early spring, interest groups, including Farm Bureau, bombard the governor and the Legislature with input: what's good, what's bad, what needs to be augmented or what should be redlined. In budget subcommittee hearings, themed by issue, legislators carry forward approvals, amendments and criticisms of the governor's proposals.

These findings are produced by committee consultants with tremendous sway, who meticulously wade through thousands of budget documents. Fair warning: Subcommittee members can be friend or foe, and any organization worth its salt has a budget champion or two fighting in its corner, making sure its interests make the final cut.

When you think you've got a handle on the recipe (the 400-page January budget), it changes in May. Based on actual quarterly revenues and expenditures rather than forecasts, the governor unveils his updated proposed budget, unsurprisingly known as the "May Revise." Its contents set the agenda for the final sprint of budget negotiations.

Through the process of approving, dismissing and amending the governor's proposals and adding in a few of their own policy priorities, each house (the Senate and Assembly) develops its own proposed state budgets. With a Democratic-controlled Senate and Assembly, you would think that their budgets would match. But differences are common, and sparring ensues. In a famous political anecdote, a freshman Assembly member declared the Republican across the aisle is his enemy. A senior colleague disagreed: "The Republicans aren't the enemy; they're the opposition. The Senate is the enemy."

How are these three budgets—the Governor's May Revise, the Assembly's budget and the Senate's budget—reconciled? This is when the veil is drawn and perhaps California politics revert to the Warren G. Harding-esque era of closed session decision making.

In late May and June, the big three—the governor, the Senate president pro tem and the Assembly speaker—get together with power brokers and key political allies to decide what stays and what goes. The governor tries to save his bacon, while leadership in the Legislature control and cajole caucuses and nonconformist members, looking to whip enough votes to pass the final budget act by June 15.

What's at stake if the Legislature doesn't meet the June 15 budget deadline? Because of Proposition 25 in 2010, that means no paycheck for legislators. Talk about motivation.

At the risk of overusing the porcine metaphor, this little piggie still hasn't gone to market. Every budget contains funding for new programs and new requirements, and that's where trailer bills come in. These bills "trail" the budget and give the various state agencies and departments the authority to enact the meat of the budget. Beware of a burst casing—trailer bills are notorious for giving lawmakers and the governor another opportunity to push through unpopular policy.

As any good sausage maker will tell you, "It's complicated." While you may think the current budget surplus is good news, it comes with a new set of challenges such as overstuffed policy proposals that extend budget obligations past the stock market-driven days of extra cash on hand. In this budget, maybe pigs can fly.

The process can seem overwhelming to many, but know that Farm Bureau has got your back. If you want to share your secret spice blend, what you think should be in the state budget—or what shouldn't—call the California Farm Bureau's Government Affairs team. In budget negotiations, when agriculture is at the table, there can never be too many recipes to choose from to make the meal.

(Taylor Roschen is a policy advocate for the California Farm Bureau Federation. She may be contacted at troschen@cfbf.com.)

Permission for use is granted, however, credit must be made to the California Farm Bureau Federation when reprinting this item.




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