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California Legislature’s Budget Crunch Impacts Key Legislation

Updated: Jun 27

Fiscal Constraints Lead to Tough Decisions on Legislative Proposals


California’s budget crunch is forcing the Legislature to scale back its agenda this session, with significant impacts on various legislative proposals. Facing estimated deficits of tens of billions of dollars over the next two years, the leaders of the Legislature’s appropriations committees had to make difficult decisions during the biannual culling process known as the suspense file.


Tough Decisions Amid Budget Shortfalls

State Sen. Anna Caballero, a Salinas Democrat and chair of the Senate appropriations committee, highlighted the budget's significant influence on their decisions. “We were trying to keep costs down and really trying to live within our means,” Caballero said. Of the 341 bills on the Senate suspense file, 87 (about 25%) were held, while another 121 were amended to reduce costs.


The Assembly’s appropriations committee held 233 of the 668 bills on its suspense file, or about 35%, slightly higher than last May. Assemblymember Buffy Wicks, an Oakland Democrat and chair of the Assembly appropriations committee, emphasized the need for fiscal responsibility, noting the challenging task of balancing the budget without incurring debt.


Key Legislation Affected

Several significant bills were held or amended due to budget constraints. Assemblymember Ash Kalra's single-payer health care bill (AB 2200) was one such casualty. Despite two years of negotiations, the bill was held, with Kalra expressing deep disappointment, citing studies showing the cost-saving potential of a single-payer system.


Other notable bills impacted include SB 1012, which aimed to legalize the use of hallucinogenic drugs in therapeutic settings. This bill was shelved, following Governor Gavin Newsom's veto of a broader decriminalization of psychedelics last year.


Bills to Watch for LACMA

  • AB 977: Expands legal protections for healthcare workers in emergency departments, imposing stricter penalties for assault and battery against them.

  • AB 2105: Mandates insurance coverage for the diagnosis and treatment of PANDAS and PANS, ensuring children receive necessary medical care without prohibitive costs.

  • AB 1976: Requires the inclusion of naloxone hydrochloride in workplace first aid kits to enhance the response to opioid overdoses.

  • AB 2164: Proposes changes to the Medical Practice Act, protecting the privacy of physicians regarding conditions that do not impair their ability to practice safely.

  • AB 3129: Introduces regulations concerning private equity groups and hedge funds in the healthcare sector to prevent negative impacts on competition and healthcare access.

Governor Newsom’s Spending Plan

Governor Newsom unveiled his proposed spending plan to address the looming shortfall, estimated at $56 billion over the next two fiscal years. With more than $30 billion in cuts to education, public health, environmental, and other programs, Newsom is likely to be cautious about new costly legislation. He has already emphasized the need for fiscal discipline, vetoing numerous bills over the past two sessions that would have added unaccounted costs to the budget.

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