Should California save more money? State law prevents it, but a bill could change that
Good morning and welcome to the A.M. Alert!
SHOULD CALIFORNIA SAVE MORE MONEY IN SURPLUS YEARS?
Via Nicole Nixon...
California’s state budget can be volatile, as evidenced by the dramatic fluctuations between 2022’s $100 billion surplus and the $47 billion deficit state leaders plugged earlier this year.
Democrats agonize over cutting social and healthcare programs during deficit years, but they think they have a solution: Save more money during surpluses.
It sounds like a basic budgeting tip, but state law limits how much money can be deposited into the rainy day fund each year. In difficult budget years, lawmakers and the governor rely on the rainy day fund to help address shortfalls.
The rule, known as the Gann Limit, is most famous for requiring refunds to taxpayers if state spending reaches a certain amount. But it also limits rainy day fund deposits to 10% of tax revenue in the General Fund in any given year.
Assemblymember Avelino Valencia, D-Anaheim, this week introduced ACA 1, which would raise the 10% limit to 20%. Valencia said a statement that it’s “high time California updates its fiscal playbook.”
Gov. Gavin Newsom first teased the idea earlier this year when he presented his initial budget plan.
To make the change, ACA 1 needs support from two-thirds of state lawmakers and approval from voters in the next general election, so it’s unlikely this change would take effect before 2027.
HUFFMAN LOOKS FOR TOP SPOT ON HOUSE COMMITTEE
Via David Lightman...
Rep. Jared Huffman is seeking to become top Democrat on the House Natural Resources Committee.
The panel is an important stop for legislation concerning energy, wildlife, public lands and water. It holds hearings on those topic and writes legislation to be considered by the full House.
The current top, or ranking, Democrat, Rep. Raul Grijalva of Arizona, stepped down from the job this week for health reasons.
“After much thought, I have decided that it is the right moment to pass the torch as top Democrat on the House Natural Resource Committee for the 119th Congress,” he said in a press release.
Huffman, first elected to Congress in 2012, represents a long swatch of northern California, from the Golden Gate Bridge to the Oregon border.
He is regarded as having a strong environmental record.
“Rep. Grijalva leaves big shoes to fill, and I will now dedicate myself to building on his legacy of principled and productive leadership as Ranking Member of the Natural Resources Committee,” Huffman said.
Huffman is regarded as the favorite to win the slot, though challenges are possible. The new Congress convenes January 3.
QUOTE OF THE DAY
“California’s oldest former #CALeg legislator is now former Assemblyman Tom Hom of San Diego who served back in 1969-1970.”
- Alex Vassar of the California State Library, following news that the previous oldest former legislator, Assemblymember William F. Stanton, died in September, via Bluesky.
Best of The Bee:
This mom fights against trans rights in California. Now, she’s taking her cause to DC, via Jenavieve Hatch.
Democrat Adam Gray tops Republican John Duarte in close congressional rematch, via Gillian Brassil.
Here’s how money influenced school board and bond measure races in Sacramento County, via Jennah Pendleton.
EPA urges California to safeguard tribal cultural practices by preserving Delta water flows, via Ari Plachta.
California Gov. Gavin Newsom condemns President Joe Biden’s pardon of son. ‘Disappointed,’ via Lia Russell.
I expected the worst from California DMV. Instead, I found a lesson in cutting red tape, via William Melhado.