1. UNDERSTANDING THE STATE BUDGET How It All Works

2. Objectives Understand Why You Should Care Understand Some of the Major Budget Barriers Understand Major State Revenues and Expenditures Understand Who are the Players Understand the Budget Process Timelines

3. You Should Care Deeply Because: The State Budget = $$$$$ to your local program Your Admin Budget Your EDP M&O Budget New State Initiatives are Unveiled New Federal State Requirements may be Unveiled Somebody has to explain it to your Board of Supervisors

4. Major Budget Barriers “Ballot Box Budgeting” –Proposition 13 Set maximum PT rate at 1 percent Gave Legislature responsibility for allocating property tax Requires 2/3’s vote for new local taxes and Legislatively approved taxes –Proposition 98 Guaranteed Funding for K-14 Education –Approximately 40 percent of State Budget –A share of any new state revenues automatically goes to education –Proposition 1A Reduces State Authority to change –Property tax allocation –Local Sales tax rate allocation –VLF rate reductions

5. Where Does the Money Go FY 2010-11 –K-12 Education43.4% –Health and Social Services25.3% –Higher Education14.3% –Corrections 9.6% –Other 7.4% Source: LAO

6. Where Does the Money Come From Personal Income Tax52.5% Sales Tax (State Share)28.9% Corporate Income Tax11.3% Other 7.3% Source: LAO

7. Who are the Players The Governor’s Office The Department of Finance (DOF) The State Department of Child Support Services (DCSS) CSDA Local Child Support Agencies (LCSA) The Legislature The Legislative Analyst’s Office (LAO) Advocates

8. The Governor’s Office The Governor has the Constitutional responsibility to submit a Proposed State Budget by January 10 th of each year Using the Governor’s broad executive authority, the Governor provides direction to the myriad Agencies, Departments, Boards and Commissions under his discretion. The Governor is a member of the so called Big 5. The Governor is expected to sign the budget by June 30.

9. The Department of Finance (DOF) The Director of Finance, as the chief financial officer of the Governor, directs the efforts for preparation of the Governor’s Budget. Under the direction of the Governor, the Director of Finance issues instructions and guidelines for budget preparation to agencies and departments. The effort typically gets underway even before the Legislature has passed the budget for the current fiscal year. A DOF representative has a permanent “seat” at the budget hearing table.

10. DOF continued Generally, if you can’t get your proposal “blessed” by DOF it is DOA Every state department has a DOF budget analyst, a good source of information Be nice to DOF

11. The Legislature Each of the 40 California State Senators will have – or try to have– a say in the budget Same goes for the 80 members of the State Assembly Each chamber has a Budget Committee and subcommittees (We will get to this later) Big 4

12. Legislature Continued Big 4 cont. –Senate Pro Tempore –Assembly Speaker –Senate Minority Leader –Assembly Minority Leader –Plus Governor = Big 5 Budget Committee Consultants Budget Subcommittee Consultants Agenda/Analysis

13. Legislature Continued A consultant’s analysis is extremely influential towards the success or failure of any budget recommendation –There are both majority party and minority party consultants –Be nice to the consultants

14. Legislative Analyst’s Office (LA0) The Legislative Analyst's Office has been providing fiscal and policy advice to the Legislature for more than 65 years. It is known for its fiscal and programmatic expertise and nonpartisan analyses of the state budget. The office serves as the "eyes and ears" for the Legislature to ensure that the executive branch is implementing legislative policy in a cost efficient and effective manner.

15. LAO Cont. The LAO is overseen by the Joint Legislative Budget Committee (JLBC), a 16-member bipartisan committee. The office currently has a staff of 43 analysts and approximately 13 support staff. The analytical staff is divided into ten subject areas: Criminal Justice, State and Local Finance, K-12 Education, Higher Education, Health, Local Government, Resources and Environmental Protection, Social Services, State Administration, and Transportation, Business, and Housing.Criminal JusticeState and Local FinanceK-12 EducationHigher EducationHealthLocal Government Resources and Environmental ProtectionSocial ServicesState Administration Transportation, Business, and Housing

16. LAO Cont. The LAO has a permanent “seat” at the budget table The LAO annually publishes its Analysis of the State Budget The opinion of the LAO is extremely important to Legislature and the success or otherwise demise of any given item in the budget The LAO will bring their own ideas and opinions to the table Be nice to the LAO

17. State Department of Child Support Services (DCSS) Under the Leadership of the State Director –Under the umbrella of the Health and Human Services Agency (HHSA) and the Governor’s Office –DCSS internally develops its budget and any new budget proposals or initiatives. DCSS’ proposed budget is evaluated and approved by HHSA, DOF and the Governor’s Office –Generally the Director and/or a senior DCSS executive will present the Department’s budget to the Legislature

18. Child Support Directors Association CSDA Is the professional organization representing local child support agencies Brings together the concerns and issues of LCSAs to present to DCSS –Board of Directors –CSDA Finance Committee –CSDA Policy and Regs Committee –Conference Calls with DCSS Exec Team Prohibited from lobbying based on DCSS interpretation of federal law

19. Local Child Support Agencies LCSAs Each LCSA will be impacted by the budget process LCSAs work through CSDA to articulate budget related concerns to DCSS An LCSA through its own county lobbying apparatus, may take a county only position on the budget or a budget item

20. The Budget Process The Ideal Governor Submits Proposed Budget to the Legislature by January 10 Identical Budget Bills Introduced in the Senate and Assembly Legislative Analyst Review – Feb., March Legislative Budget Committee Hearings – April and May

21. Budget Process Continued Legislative Conference Committee – May and June Leadership Meetings – ongoing Governor’s Signature – June 30 th Good to Go Summer Vacation NOT!

22. The Real Budget Process January 10 th (any year) – DMOGWHTD –Complete shock –Everybody unequivocally believes it is the absolute end of the civilized world as we have come to know it! –Media has field day with outlandish quotes and reaction February – A month of relative peace and tranquility –LAO writing up its Analysis of the State Budget –Committee Consultants gathering information

23. The Real Budget Process continued March – We are all starting to get a little uneasy. –LAO releases Analysis of State Budget –Senate and Assembly Budget Committees begin to meet –Indignation abounds about how we have gotten ourselves into this position (again!) –Begin to see how far apart the parties are towards reaching a compromise

24. The Real Budget Process Continued April – Gosh Darn it’s Time to Get Serious Month –Senate and Assembly Budget Subcommittees begin to meet –Budget subcommittee consultants begin their analysis and recommendations on Governor’s budget proposals –Budget Subcommittees hold hearings For Child Support Item 5175

25. The Real Budge Process Continued April Continued –Child Support Issues are the jurisdiction of Senate Budget Subcommittee #3 for Health and Human Services –Child Support Issues are the jurisdiction of Assembly Budget Subcommittee #1 for Health and Human Services –During Budget Committee and Subcommittee hearings, DOF and LAO have a permanent seat at the budget table. Let me explain. –Budget Committees work through early May

26. The Real Budget Process Continued May – “Houston we have a problem” –DOF issues May Revise Revises DOF revenue and expenditure estimates Generally becomes the final marker for the budget deficit the state must constitutionally address Outlines any additional program reductions or initiatives –Senate and Assembly Budget Subcommittees conclude –Full Senate and Assembly Budget Committees accept subcommittee reports and approve respective budgets for inclusion in respective chamber budget bills –Senate and Assembly pass their respective version of the budget

27. The Real Budget Process Continued June – We’re so close, “Lets get er done” –Senate and Assembly select members for the Budget Conference Committee Conference committee resolves areas of disagreement between the Assembly and Senate version of the budget Big 5 typically meets to iron out larger issues key to the getting a budget deal Senate and Assembly take up unified budget bill Ideal world – Budget approved –Budget sent to Governor –Governor signs with his “blue pencil” changes –Summer vacation begins

28. The Real Budget Process Continued July, August and September – The 100 degree rule –Budget is not resolved –Local government’s anxious for a decision so they can conclude their budget –Local government’s must adjust to new funding allocations or new unfunded mandates or local requirements

29. The Real Budget Process Continued Time to Go Home –Arms are twisted and broken –Promises are made –Favors exchanged –A couple of Republicans from the Assembly and Senate break ranks –2/3rds majority finally reached in both houses Time to Get Ready for Next Year

30. A Word about Program 5175 Program has largely been protected from cuts experienced by most other Health and Social Services programs Program received $18.7 million in new funding last year that will continue on to next year Need to keep on message, “Child Support is a revenue generating cost avoiding program. It is not only a sound investment for the State, but also an excellent investment that protects many of California’s most economically fragile children and families from poverty.”

31. Questions ???????

32. Contact Information David Oppenheim Executive Director, CSDA E-mail doppenheim@csdaca.orgdoppenheim@csdaca.org Phone (916) 446-6700