Early action & "freeze" letters sent to JLBC

Letters from Finance required by early action bill, AB 106

As required by AB 106 (signed by Governor Newsom earlier this week), the Department of Finance has sent two notifications to the Joint Legislative Budget Committee (JLBC) related to the early action budget agreement.

As required by Section 77 of AB 106, one notification formally memorializes the early action agreement items that were listed in prior Senate and Assembly early action agreement summaries. Because many items in the agreement concerned 2024-25 budget plans that cannot be reflected in an enrolled budget bill until June, this notification was planned to officially record the $17.3 billion of changes to previously planned General Fund spending. Section 77 specifies that the early action agreement is to be reflected in updated deficit estimates in May. The Section 77 letter is here.

As required by Section 74 of AB 106, a second notification announces the administration’s intent to issue guidance to departments to begin suspending further expenditure of various one-time appropriations provided in Section 2.00 of the Budget Acts of 2021, 2022, and 2023. Following the required review period of this letter by the JLBC, “Finance intends to issue this direction to departments as soon as possible.” This “freeze” of certain one-time spending is intended to increase options available to policy makers to balance the budget in June. The Section 74 letter is here.

By custom and provisions of budget bills, the JLBC has the opportunity to review such letters and offer advice to the administration concerning legislative intent. Under AB 106, that review will last a maximum of 7-10 days for these notifications. The JLBC typically posts responses letters here.