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Senators press finance and LAO on Prop 98 funding and proposed UC/CSU reductions
Summary
Lawmakers pressed Finance and the LAO about a $1.6 billion hold‑back of the Proposition 98 guarantee in the governor's budget and questioned planned reductions to the University of California and California State University budgets.
Several senators pressed the Department of Finance and the LAO about the administration's decision to temporarily defer approximately $1.6 billion of the Proposition 98 minimum guarantee and about cuts and deferrals proposed for the University of California and California State University systems.
Senator Laird asked why the administration proposed funding Prop 98 at about $1.6 billion below the calculated guarantee. Finance responded that the administration's approach was meant to "safeguard" against volatility by delaying a portion of the certification until later in the year when revenues are clearer; Finance said the amount would be paid if revenues materialize. LAO and members pushed back, arguing that the guarantee reflects the current revenue picture and asked why the budget would not budget to the present calculation.
On higher education, senators raised alarm about the proposal's reductions for UC and CSU (a near 7.95% reduction was discussed for CSU in committee discussion). Members warned that a large cut could force campuses to reduce enrollment or make deep program and personnel cuts. Committee members also criticized the administration's approach of deferring compact increases and described the proposal as an unreasonable starting point for negotiations.
Separately, senators raised concerns about transitional kindergarten penalties and how penalty metrics are being applied in ways some view as disproportionate to the circumstances of individual schools. Finance said it had no immediate trailer‑bill proposals on TK penalties at the time of the hearing but pledged to continue discussions with the Legislature.
Committee staff and both fiscal offices agreed to follow up with more granular Prop 98 certification and UC/CSU funding details during the spring review process.
