How the California Legislature Passes the Budget

The California State Budget process includes the development of the Governor's Budget and the Legislature's enactment of the plan. The budget is impacted and influenced by many factors and is ultimately a plan for revenues and spending for the state.

The State Constitution requires the Governor submit a budget annually to the Legislature by January 10. Subsequently, the Constitution requires a Budget Bill be introduced to both houses of the Legislature (Senate and Assembly), and the Budget Bill is supposed to be passed by June 15.

Before the Budget is passed, the Legislative Analyst's Office (LAO), which is California's nonpartisan legislative and policy advisor, prepares an analysis of the Budget Proposal. Budget Subcommittee Hearings take place, and in May, the Governor's May Revision is released. The May Revision is the administration's changes to its January Budget Proposal based on changes in the state's revenues and expenditures. The Budget Subcommittees report their findings and recommendations to the full Budget Committee in each house. "Upon adoption of the budget by the full committee, a recommendation is made to the Floor of each house. Upon two-thirds vote of one house, the Budget Bill is passed to the other house. A Budget Conference Committee is then appointed to work out differences between the Senate and Assembly versions of the bill. Upon completion of action by the Conference Committee and a two-thirds vote, this conference version is then sent to each house for its approval." (DOF).

"Sometimes the Conference Committee does not reach final resolution on the budget. This stalemate typically results from non-resolution of a few major issues. These issues are then resolved by the 'Leadership' or 'Big 5' (Governor, Speaker of the Assembly, President Pro Tempore of the Senate, and the minority leaders of both houses)" (DOF).

"When the Budget Bill receives a two-thirds vote of each house, it is passed on to the Governor" and he signs or vetoes the final bill (DOF). The Constitution allows the Governor to reduce or eliminate certain appropriations in the Budget.

Public education in California is funded at the state level by Proposition 98. It provides a minimum funding guarantee for school districts, and other state agencies that provide direct elementary and secondary instructional programs for kindergarten through grade 14. Proposition 98 funding constitutes over 70 percent of total K-12 funding and about two thirds of community college funding. Currently, Proposition 98 spending is over 40 percent of General Fund revenues. Please watch this informative webcast on the LAO's website.

The Department of Finance (DOF) web site includes the Governor's budget Summary and the Governor's Budget Highlights. This Budget Summary is adapted from the DOF website/.