May 7, 2026 · Budget Sub4 · 28,210 words · 12 speakers · 135 segments
Subcommittee 4 of the Senate Budget and Fiscal Review Committee will come to order. We will provide an opportunity today for public comment before any votes are taken, generally following the conclusion of the calendar. At this moment, we'll go ahead and ask our consultant to take a role and establish a quorum. Senator Hurtado?
Here.
Senator Nilo?
Senator Cabaldon? Here.
Senator Smallwood-Cuevas? Quorum established. Today, the order of business is as follows. Our agenda today involves a variety of budget items set for discussion, including those for local government financing, the Secretary of State, the Department of Veterans Affairs, the Arts Council, and the Military Department. We also have items on our vote-only calendar, but we're going to be holding off on those items and voting on them at a different date. We will still allow for comment on those items, and you can provide comment during the comment period. We will now turn over our first item of discussion on the vehicle license fees. So Agenda Item 1 pertains to a backfill for vehicle licensing fees, and we have a representative here from the Department of Finance and please proceed with your presentation.
Good morning, Chris Hill, Department of Finance. I think the agenda does a pretty good job of laying out all the mechanics of how the vehicle license fee swap mechanism works, so I won't belabor on that. I'd just like to briefly discuss some of the numbers. According to the Department of Finance's calculations, based on data we got from the county auditor controller data for San Mateo County. The vehicle license fee swap amount owed to the county and the cities is $280 million. And the amount of excess ERAF that the cities and the counties received that did not count towards that vehicle license fee swap was $330 million approximately. And because that $330 million did not count towards a $280 million vehicle license fee swap obligation, the county auditor controller shifted 165 million dollars in property tax from the county's non basic aid K-14 schools and the difference between the 280 million dollars in vehicle license fee swap owed and 165 million dollars shifted from the city's and the shifted from the K-14 schools is the the budget ask of about 119 million dollars it is before us today and the governor's budget reflects the administration's belief that statute does not require the provision of that 119 million dollars the administration believes that's a discretionary expenditure that is not supportable from the context of the current fiscal situation and that is why the administration is not proposing
those funds thank you for your presentation I have a couple questions the past years a department of finance opposed to use the excess you have to first fund the BLF backfill, is this still a proposal that the Department of
Finance would recommend as an option I sorry to use the excess ERAF well the the administration is not proposing the XSE ref just goes where it goes according to statute and what the administration is proposing is to not provide a backfill for the for the insufficiency where there's not enough basic aid not enough property tax to be shifted from the schools to backfill the vehicle license fee swap so we're not proposing any changes the excess ERAF on formula those just say that those will operate the way they always do.
Great. And my second question, while the majority of the impact is felt in San Mateo County, two small rural counties are also impacted, Alpine and Mono. Has the Department of Finance looked at a different approach for these small counties, and should they be considered separately?
We have not. We're treating all the counties the same in this matter. And so, yes, we're not proposing any different treatment for those smaller counties.
Okay, thank you. Do we have questions from committee members? Senator Cabaldon.
You framed this up at the beginning as an excess ERAF and BLF issue, and then at the chair's question said we're not proposing to do anything there. Do Alpine and Mono have any substantial excess ERAF? I haven't seen the calculations for Alpine.
I believe Mono does have some excess ERAF, but Alpine County it's so small that um it doesn't show up on the reports that we see from the Department of Education and and is there can you think of a
policy basis why Marin which has substantially more excess ERAF than any of the BLF affected counties why they should have additional sort of state directed discretionary funding it's just it's not something the administration is proposed it just happens pursuant to the operation of statute. Okay, so these are just two unrelated facts that have nothing to do with each other?
Yeah, because what it comes down to is in Marin County, I believe there is sufficient money from non-basic aid schools can be shifted for the vehicle license fee swap. That situation doesn't exist in San Mateo County. San Mateo County does not have enough non-basic aid schools from which property tax can be shifted to backfill the vehicle license fee swap.
So if San Mateo County and other counties, as you know from last year's hearing, this is a looming every year threat in Napa County as well. But these are artifacts, this challenge is an artifact of just the way different lines are drawn. So this will never hit LA County because LA County is one big gigantic county with lots and lots of different kinds of school districts. They will never have 100% basic aid. It's mathematically impossible for that to be the case. The Bay Area, on the other hand, is divided into nine counties, so the chances of a single county having an entirely basic aid is not trivial. In fact, there's one already, obviously, and potentially two. But then within the counties, this is also an artifact. And so I'm curious if the Department of Defense has a view about what will happen to our budget here if, for example, in Napa County, the people of Napa County were to decide to, let's just say, partition one of the school districts into two school districts. Napa Valley Unified, for example, serves both the city of Napa and the city of American Canyon in some unincorporated areas. It's not hard to imagine how to draw that line. You don need Prop 50 sophistication to draw that line in a way that would create one basic aid district and one non basic aid district which would then automatically without any action by the department or by the legislature automatically entitled NAPA essentially permanently towards the VLF revenue I'm not enough familiar with San Mateo County's school district boundaries and what have you to know whether that's possible there but well it certainly is possible if you know if we use the level of sophistication we did for proposition 50 so this issue in some respects is in the hands of the locals to deal with in a way that would give the state no discretion whatsoever we would just be given our regular bill like we get from LA and San Diego and and and Marin and everyone else so what's that what's the department's view about the necessity to try to find a solution for this that is not necessarily all or nothing have you and have you contemplated that the possibility that the locals could take action to solve it but from their perspective that would leave the full amount of exposure that you described as a reality in our own revenues?
That's kind of a complicated question. I don't know that just shifting school district boundaries, I don't know how that would interact with Proposition 1A from 2004 that says you can't move property tax between agencies. But in terms of a solution, this is a subject of litigation. Also, I want to note San Mateo County has filed suit against the state for not providing funds in the last budget act So I don't want to speculate too much on anything that could touch upon that litigation
Proposition 1a has no impact whatsoever on the on the on changes to school district boundaries Or the creation of new districts from within existing districts. So I Was mayor when proposition when they was passed and sponsored by the League of Cities I understand its implications, but it doesn't have an effect in this case. And so if any school district reorganization to change a boundary or to split the boundaries of a district were to result in one of those districts not being basic aid any longer, then there's no longer a VLF problem in that county. Now, I'm not suggesting that anyone is contemplating doing that tomorrow, because obviously there are other implications of that procedurally. and just hassle for the local community and of course we don't want to disrupt collective bargaining contracts and school school assignments and all of that but the point is that this is not the the Department of Finance and we are not we are not king with this with respect to this issue that we either solve it or it has the potential of being solved in a way that would remove any flexibility by the department and by the state and we ought to be we ought to be having those those conversations about how we resolve it here in at the state level in a way that makes sense doesn't disrupt disrupt the communities and that writes this inequity that has been baked into the into the law since the shift was made thanks manager any additional questions from committee members well thank you so much for your presentation presentation today and at
At this moment, we will call up, we'll take public comment from Senator Becker and Supervisor Jackie Speier. And for other members of the public who would like to make public comments on this item, we will take those comments at the end of the hearing after all discussion items have concluded And you may present whenever you are ready Great Thank you Chair Hurtado and members of the subcommittee and staff Thank you for the opportunity to speak to you today about a critical issue in my district
I'm here alongside San Mateo County Supervisor and former State Senator Jackie Speier, and we have a delegation of county leaders you'll hear from later to urge you to include the dollars requested in the state budget of in-lieu vehicle license fee revenue that the state is obligated to provide to San Mateo County. In addition, we ask for a permanent fix, as was just discussed by Senator Cabaldon, a permanent fix to a broken state payment mechanism that is leaving my constituents uniquely and unfairly short-changed. As a donor county, we like to talk about California being a donor state. San Mateo County is a donor county, a GDP of over $203 billion. We pay significantly more to the state than we receive back in funding. Historically, San Mateo contributes approximately 15% of California's total income tax revenue, proud to be one of the economic engines of the state. Yet year after year, the county must fight for funding that we are owed for critical services. This is a flawed funding formula, as we'll discuss, that was created to address the state budget deficit in the 1990s and early 2000s. And this formula no longer works. And we're fortunate to have people who were here when that deal was made. So contrary to the testimony we just heard from the Department of Finance, administration has agreed in every year prior to the last one that this money is owed to San Mateo County. Last year it was a partial payment but the mechanism enabled the state to eliminate the projected budget shortfall at that time and the state promised to substitute this revenue source this in lieu VLF tied to the school funding process but again it's nothing to do with school funding That is just the mechanism that this money was agreed to be returned to the county. In San Mateo County, the number of state funded school districts has dropped to only four out of 23 total districts. As a result, the county and its 20 cities have faced an annual funding shortfall to the state this year has refused to address, and again has agreed to address in past years. So I respectfully ask this committee to help fix this unfair practice and reimburse the revenues that support essential local services that the residents in my district rely on every day. We're fortunate to have many of those providers here today. You'll hear from them later. So this isn't just a technical issue. This is really a matter of fairness. And I'm here today to advocate for every dollar that our county is owed as agreed to with the state and push for a permanent fix so we can end this cycle of uncertainty. Thank you.
Thank you, Senator Becker, and thank you, Madam Chair and members of the committee.
It's a pleasure to be here today, sort of, but I'm grateful for the opportunity to talk to you about this issue. When I was here in 2004, a long time ago, there was a recall on Gray Davis, and Arnold Schwarzenegger was running. Gray Davis had just increased the vehicle license fee by 300 percent. And it was Arnold Schwarzenegger as a candidate who says, I'm going to get rid of it completely. And, of course, he won. And then when he won, there was recognition that, well, this is the money for the counties and the cities. So we'll take it from 3 percent, I think, from 2 percent to 6 percent. tenths of 1% and then there was this process that all the parties went through in which the commitment was made to take the VLF from the cities and counties and swap it for money that would come through prop 98 now when mr. Hill I think it is said well this is discretionary if what we're saying is that every time there is a deal made with the governor's office and the legislature that a deal is discretionary and not a deal that is a contract then we're all in trouble on a number of levels so everyone in good faith did that they made the commitment and it has worked for most counties and cities with the exception of three now the reference to Alpine with 1200 people and mono with 12,000 people the total loss of revenue to them for the two of them is two million dollars it is truly budget dust but the hit to San Mateo County is a hundred and fifty seven million dollars over this year and what was not provided last year DOF has been consistent in paying us back for what is owed to us until this year and you know I just like you I've been in lots of situations where we've dealt with really traumatic and tragic conditions this is catastrophic for San Mateo County and its cities and it's through no fault of our own the loss to San Mateo County in our budget will be 18 percent the loss to many of the cities will be as high as 10 percent in San Mateo County from our perspective we would have to close eight of our homeless shelters that's nearly 3,000 homeless people or eliminate assistance for 5,500 low-income families and set and seniors eliminate the psychiatric services for 600 homeless people eliminate benefits for 3,000 veterans I mean you get the message for our cities it's jaw-dropping for the city of San Mateo they would either have to cut 23 police officers or 26 firefighters 19 firefighters in Redwood City 7.5 police officers in Belmont you you can see where this is going imagine if this was happening in your districts through no fault of your own you didn't mess up the budget you're doing your job and this was a commitment made by the state and they're just saying oops we're not going to do it anymore I mean it's just fundamentally unfair and wrong so without this fix this county San Mateo County will lose a billion dollars over the next five to seven years it is it's untenable so I respectfully ask for your support of this effort to recognize if it was happening in your county what would you do in terms of the issue of litigation what do you do when you're just told nope we gave you money last year we're not going to give it this to you this year we're not going to give you what we owe you this year it means that you know we we filed a lawsuit because we wanted to engage in negotiations and we have been attempting to negotiate with the Department of Finance and we still awaiting some compromise But meanwhile it desperate Thank you.
Thank you for your presentation. Do we have any questions from committee members? Okay. Senator Smallwood-Cuevas.
Well, I just want to thank you for your comments and your work and your service. It's always good to be in your presence. We, as one of the first black women to serve in the California State Legislature and to have parity in the State Senate now, you are one of our heroes. And so notwithstanding this issue and certainly support San Mateo in getting what San Mateo deserves, I just want to say thank you for your leadership and for joining us today.
Thank you, Madam Chair.
So this issue has been overcomplicated repeatedly, but teeing off of the staff analysis of the issue, I went back to look at what was actually said in 1999. Because remember, in 1986, the voters passed Proposition 47, 1986, which constitutionally guaranteed that VLF revenues be sent to local governments. This wasn't some sort of, you know, side agreement or, you know, something that people thought might be a good idea or this will just get us from this year to next year. The voters of California passed Proposition 47 constitutionally guaranteeing that VLF revenues would be sent to local governments. But then in 1999, the legislature was considering the first round of cuts to the vehicle license fee. And at the time, here's what LAO said. The VLF is local government's third largest source of general purpose revenues. It's not a parks fee. It's not a yoga in the park fee that folks are paying. It's the third largest source of general purpose tax revenues after property and sales taxes. And so I said, recognizing that VLF revenues represent an important source of general purpose revenues in cities and counties, both the governor and the VLF tax cut bill proposed to backfill local governments for any lost VLF revenues. The governor's proposal is to continuously appropriate general fund revenues in order to repay local governments for lost revenues. Continuous appropriation, for those visiting from San Mateo County, is the term that we use here to say we aren't having this year-by-year conversation. San Mateo County, Napa County, Alpine County, Monaco County, by law do not have to come and beg every year as though this is a discretionary choice. A continuous appropriation says it will automatically be appropriated every single year. So the notion that there was no agreement and that it's just a discretionary choice for us each year, even if that were legally true, and that's to be determined potentially through litigation, if not here, through a deal, even if that were legally true, it's certainly not consistent at all with every public statement, with the actual legislation that was passed, and with the intent of both the legislature and the governor when they made those cuts and the intent of the voters of California when they passed Proposition 47. Voters then passed after what Supervisor Speer referenced in 2004 they then passed an update to the to the to that language which continued to commit that to continue the arrangement that local governments would have access to the to the VLF revenues and that at a certain threshold which we just happen to be right at that threshold today anything below that threshold if we cut the VLF by one cent or by one percentage point tomorrow then the constitutional provision would kick in that requires would require constitutionally that every dollar be backfilled to the counties. So this was all anticipated that this might be an issue going forward and so as both the senator, Senator Becker and the supervisor have indicated, the mechanism was happening later was just a that was a purely internal state government like how do we what's the what's the most effective most flexible way for us to make our payments. It wasn't a, the ERAF, VLF linkage was not intended to be a substitution for the long-standing, decades-long constitutional commitment that VLF is a local government funding source, and if we're going to mess with it here in the capital for whatever reason, that it is our obligation to assure that local governments are not, and the communities that they serve are not the ones that are hit. So we held this exact same hearing last year, but instead of all the folks from San Mateo being with us, some of them were here, but there were even more folks from Napa County here last year. And the commitment was made at the time by everyone, including the Department of Finance, that we would continue to work on it. We're still here. After that commitment was made, then we didn't get a solution, and we didn't get the appropriation at the level that was appropriate or necessary in order to do the backfill. And we're still here today without a meaningful permanent or midterm solution to this problem. We have to solve it. There's nothing in here. San Mateo could have done nothing differently. There's nothing it could have done in order to avert this. The voters, the governor and the legislature, when they decided to cut the fee in the face of political pressure, made that commitment. They put it in writing. It's very clear. We owe it to this. And as the supervisor said, we would not allow this to happen anywhere else in California either. This is not special to San Mateo. San Mateo doesn't earn this because San Mateo generates so much of our income tax revenue. San Mateo has earned this because it is our commitment to them as it would be to Tulare, to Kings, to YOLO, to the rest of Los Angeles County as well, and it's absolutely imperative that this House, this subcommittee, get to a solution this year. So thanks, Madam Chair.
Thank you. I want to thank the two of you for coming and presenting. I appreciate the passion and fighting for your community, for your district, and again, I want to thank you for your service and for being here and fighting on their behalf. With that said, I will hold this item open, and I don't think we have any other further questions at this moment. Thank you. Thank you. Thank you.
We will now move to the Secretary of State. Will representatives of the department please come forward? And before we get into the specific budget proposals, we ask that the department provide a brief status report and you can proceed when you are ready Thank you.
Good morning, committee chair and members. My name is Kristen Dagsher. I am the Interim Chief Financial Officer for the Secretary of State, and on behalf of Secretary Weber, I'd like to thank you for the opportunity to present our proposals to you this morning. Should I start with the first one, the elections law enforcement?
We're asking for a brief report on the status of the department before we proceed with the item.
We can move to the item. That's fine. Thank you.
Okay, so SB 851 adds additional duties to the Secretary of State's office. It requires the SOS to obtain notice within three days after the state or local agency or political subdivision files or is served with a court action relating to elections that contains a claim arising under federal law and at least 14 days before a state or local agency or political subdivision enters into a settlement to provide the SOS with an opportunity to ensure compliance with California law and regulations. It expands the Secretary of State's authority to adopt and publish voting system standards and regulations that meet minimum requirements of the Help America Vote Act of 2002 that incorporates best practices in election technology. It also expands notice requirements for vendors of voting systems that have been certified or conditionally approved by the Secretary of State to require notification of any deficit or failure of any voting system or part of any voting system created or manufactured by that vendor in any jurisdiction. This request would provide $1.1 million in general fund for fiscal year 2026-27 and $807,000 in general fund annually thereafter to support four permanent positions and litigation tracking software licensing costs necessary to implement the statutory requirements prescribed by SB 851. I have with me today subject matter experts on this and we're happy to answer any questions. Thank you.
Do we have any comment from the Department of Finance? Alina Petrici, Department of Finance, no comment. Okay. Do we have any comment from the LAO's office? Drew Sudeborg from the LAO. We have no comment on this item. Okay. I'll turn to questions from committee members. Senator Smallwood.
Thank you. Thank you, Madam Chair. Good morning, and thank you for that overview of the item. I have just some general questions and comments, and then we'll get to the item. I just want to say that this issue comes up at a time when California cannot underestimate the power and the importance of the Secretary of State's office, and particularly the election protection, grown more concerning in the recent Supreme Court decision. That was just levied Louisiana against Kalis, which raises serious questions about how states can protect communities of color, particularly their right to vote, their right to be protected against discriminatory practices and the dilution of their vote. So as we look at this proposal, I just want to say it is incredibly important that this office has what it needs to do the job. given the circumstances and also trying to understand how has that decision really impacted what and how you are thinking about this work as we are looking at one of the most important elections that California will face under incredible duress and pressure from our national government. this federal administration has shown just straight up hostility toward equity, toward civil rights, and particularly the focus on fair access to the ballot. So, you know, I want to just start with that general question. I know we don't have often a chance to sit and get briefings. I know the Secretary has done quite a few public sort of explanations of what's happened, but I want to hear from the Department directly about this decision and what are the steps that you now have to consider and take, and then I'll move to my question about the item. I'd like to request Nikesha Robinson and Janelle Callahan to come.
Thank you for the questions and comments. My name is Janelle Callahan. I'm with our Legal Affairs Department. I just wanted to say that we take your comments very seriously, and I don't have a specific response to that case at the moment, but we are working closely with our AG counterparts and county election officials and all of our local partners to make sure that we're apprised of everything going on and any threats that may be happening at the state or local level. We're constantly coming up with information that we can provide to county election offices so that they're prepared for things that might come. We don't know what's going to be on the horizon, as you said. There's a lot of things that are unprecedented right now, and we have all hands on deck to ensure that we're putting out the information that we need, communicating with our partners and responding as quickly as we can and appropriately as we can with all of our resources. So thank you for that.
So my question then is on the item itself. And as we're going through this time of great hostility and pressure, we also have to ensure that there's accountability for the system and to make sure that there's transparency around our campaign finance and lobbying activity, particularly as there are incredible, I would say, unsubstantiated and erroneous attention to how well we conduct our elections and whether we are being very mindful about any violations or erroneous activities. So is there a way to understand that as we're looking at the access to the need to replace CalAXS, and I'm understanding that that's necessary, How do we ensure the accountability and a clear communication effort within that system so that filers and watchdogs journalists advocates voters all know that the system is being implemented and it being implemented in a time where we can trust the data and the outcomes and the success of that system
Do we have a subject matter for hypercal access? Are they in the hallway? Senator Smallwood-Cuevas, that's under agenda item number three, which is the next one.
Okay, I thought we were doing them all together. Okay. Sorry about that. We can hold that question.
Yes, thank you. Any other? Do you have any additional questions? Do you have any other additional questions from committee members?
I have a few. The first one, though they are only on the vote-only calendar, can you discuss the out-year HAVA funding and how the Secretary of State might plan to address the end of federal funds for the program? Absolutely. Good morning, members.
My name is Nikesha Robinson, and I'm the Deputy Secretary of State over the Help America Vote Act and the Office of Voting Systems Technology Assessment. And thank you for that question. So as it stands right now, we are forecasting that the HOPWA funds that we currently have will run out in the fiscal year 27-28. As of last year, the federal government allocated $647,000 to the state of California to be used for election security. This year we were awarded $1.9 million. dollars. However, we never know how much exactly we're going to get until the federal government passes their budget. So typically in the spring of each year is when we are notified of how much money the state of California will receive. Currently right now, last check, there was fifteen million dollars allocated for next federal budget year to be divided amongst all 50 states and territories. So not a lot of money to spread around, if you will, to tackle the topics of election security or any of the help America vote act mandates thank you for
that answer definitely disturbing and to hear that that that's something that we're gonna have to deal with the other question a couple more what is the timeline for the implementation of SB 851 how quickly do you believe you can hire staff? As you may be aware this was an urgency legislation so we're currently having to try to implement portions of it with existing staff and
we're already working at capacities so we would envision trying to hire as soon as possible hopefully within a matter of months once we obtain funding. Okay and will the expansion of voting system standards occur in time for the primary
or midterm elections or will those changes mostly affect later elections?
I'm sorry, please repeat the question.
Will the expansion of the voting system standards occur in time for the primary or midterm elections
or will those changes mostly affect later elections? It will be later elections.
Later elections, okay. And are the resources requested under SB 851 sufficient for the creation of voting standards and implementation of the notice requirements and can finance or the department explain how these numbers and positions were arrived at.
So regarding the first part of your question please repeat it Are the resources requested under this legislation sufficient for the creation of voting standards and implementation of the notice requirements Yes. So California already has existing voting systems standards. Those were implemented in 2014. We are currently in the process of revising those standards. And by having these additional positions, that will help to further updating those standards, and as you pointed out earlier, to advance those for use in future elections. Okay.
And can finance or the department explain how these numbers and positions were arrived at?
Did you want us to answer that?
So I'll let you speak to the specifics of the OVSTA positions. positions. There's four positions that we're requesting. Three of them would be housed in the OVSTA department. One of them would be housed within legal affairs, which is the attorney four position. With respect to the attorney position, they would be sort of a specialist relating to voting technology, which we currently don't have anyone that's kind of a specialist in that manner. and they would also be in charge of handling more complex litigation and consultation with the Attorney General's office and acting as a liaison for that as we're required to stay apprised of local and state federal election claims and possibly weigh in on potential settlements regarding this. And for the three remaining positions the information technology specialist would augment our existing staff so currently we have three full-time staff that are responsible for the testing and certification of voting technology, in addition to an information technology supervisor. So that would bring us to a total staff of five responsible for carrying out that mission. In addition to that, the other positions we're asking for, an analyst two and a supervisor one would be responsible for more of the policy and financial side of things. One of the duties that we are tasked with under the Help America Vote Act is the administration of funds to the counties in the form of contracts.
Okay, well, I have no other questions unless there's, okay. Thank you so much for your presentation here today, and we'll hold this item open. Thank you.
Moving on to agenda item number three, which relates to CARS, the CalAXIS replacement project, and when you're ready, please proceed with your presentation on the item. Thank you.
Thank you. The objective of the CARS project is to replace the outdated Cal Access for electronic reporting of campaign finance and lobbying activities mandated by the Political Reform Act. The request before you is for one-time funding of $11.8 million in general fund to support the continuation of the CARS project. Specifically, the request would provide funding to support the final months of project execution and the first few months of maintenance and operation, continued funding for the 33 prior approved positions and backfill staffs to support ongoing program activities and contracted services including the prime vendor CDT project oversight services and technology costs happy to answer any questions there's a Department of Finance wish to comment
we need to reach could Department of Finance not comment LAO no okay we'll go ahead and move it to Center Smallwood Cuevas to continue your your
question you thank you madam chair and glad we're on the right item now you know this this Cal access process has been a tough one and I understand that there have there been a history over time of different stakeholders engaging some of it meeting the state political reform division some of it not and some of it paused and then restarted And so, you know, I just totally support and understand that this is an outdated technology. It needs to be replaced. I guess how are we ensuring that moving forward, especially given our time of transition and all that is happening here at the state, how are we ensuring that Californians can trust in this process and making sure that we're delivering on a technology that does what we need it to do, which is to make sure that we have an accountable process around our elections and delivering a system that works. So can you share what steps have been put into place to address that?
Sure. My name is John Heinlein. I'm the Assistant CARS Project Director. This iteration of the CARS Project, we had a very robust replanning effort to ensure this project is successful. And part of that process was to engage external stakeholders as well as our internal stakeholders to understand all their needs, all their business needs, and they assisted in developing the requirements for the solution. We had requirements that ensured that the solution was easy, efficiently updated in response to legislation, which was a concern. We also have much more robust data integrity and standardization of data this time around. So we've taken all those considerations into account to develop the system we're developing now.
And moving forward, just in terms of the implementation, is there a way to evaluate that process?
Yeah, we're planning to go live in November 2026. and part of that, after we go live, there's a three-month sort of stabilization period where we will be monitoring the system and obtaining feedback from stakeholders and making adjustments as needed. Sure. We'll be taking, and just so you're aware, we've been meeting with the external stakeholder community since the planning phase, and they've been involved in reviewing the requirements, the design of the system, the development of the system. We've done system previews for them months over the preceding months. They're very aware of the system. Even in last April and May, we brought them in to do some hands-on training with cars. So we've done what we can to ensure that they understand the car system and how it works and taking their feedback into account.
Walden? Yeah, thank you, Madam Chair. So can you refresh, what was when the project, maybe not when it was originally authorized a decade plus ago, but we're seeing an $11 million augmentation request in the final moment. The last time that this was before us, what was the anticipated total spend on the project? The total spend on the project that did not succeed? Yeah, sorry, to be clear, maybe a year ago, what was the forecasted final appropriation that we're anticipating prior to the addition of this $11 million?
Sure. When this project was, you know, it was a huge planning effort. We did a competitive procurement to acquire a vendor, and after which we developed the development lifecycle cost by fiscal year, including one full fiscal year of M&O. And we're abiding by those fiscal year estimates. So this amount that we're asking for now has been... We've provided a financial analysis worksheet to DOF back years ago. I think in 2024 was the last time we updated it. So we're not asking for any new money.
This isn't a different ask from what we proposed back then.
Okay, so the $11 million was in the original...
Yes.
In the forecast...
Okay.
All right, that's good to hear.
I mean, when this platform was first put in place a generation or two ago, it was kind of industry-leading and changed, obviously, the public's relationship to its democracy and the role of campaign spending in really profound ways. So very, very important, as my colleague has said. And even when the Hertzberg legislation was passed, this is still a pretty complicated project to undertake. Now, I have to say in 2026, it's sort of the fundamental, like large-scale database with instant access and uploads and what have you is complicated, but it's not in the top 10 of complex projects that we're undertaking today, given the technologies, given the tools that are available to develop these kinds of systems. And so I'm glad we're getting to the end of the project and having it released. I do think there are some important lessons here around what has already been identified and sort of more fundamental problems with our overall state approach to technology and our obsession with requirements and our obsession with stakeholder input. that then leads to budget requests that we have to pay for that we had nothing to no input in determining in the first place. And I think particularly we've even seen this here in the legislature where for some of the stakeholders, the requirements that they insist on are often for commercial monetization of their own services. And they want, you know, so they want the best API access or other, you know, They want the system to be designed around their ability to sort of mass access systems and what have you at a single time. And I don't know whether that's been embedded in this or not, but that's a very common challenge that we're facing today is that requirements, you know, they're not free. And they are tradeoffs. And it isn't our job to make some of these commercial platforms or commercial journalism platforms or whatever viable by the act of these. And so lots and lots of planning followed by lots and lots of requirements. I think we are learning more and more is not the ideal way for us to deploy technology in state government. Luckily, this one's not another 20 years behind and it's not 10 times what its original budget was. So congrats. I hope we are actually able to turn this on in November because we'll definitely be needing it in the 2028 election cycle in order for folks to be able to see the influence of money and its pervasiveness in their democracy. So, Madam Chair, thank you.
Thank you.
I just echo the comments of my colleagues that are Cabaldon. I wish that the implementation had gone into place earlier on, on but because I think that that that it playing a I know the importance of getting and making sure that it done and completed by 2028 but I think that money is playing such a huge and significant role in politics today that I think we needed this yesterday right But we're here and we appreciate you being present and providing us with your presentation and updates. we're going to go ahead and hold this item open and again appreciate your
your presentation today okay moving on to agenda item 4 which relates to the notary automation program replacement project when ready please proceed with
your presentation thank you the current system is approximately 30 years old it It was developed utilizing an application that in present day is running on obsolete and unsupported technology. The application itself is in a programming language that has been deprecated. This combination presents high risk and security issues to the department and challenges the ability to find qualified information technology staff and vendors to support the application. Current technology has evolved significantly since the system was created, thus integration of the legacy system with current and future technology and possibly third-party systems is impractical and near impossible. Only migration of existing data to a new system is a viable solution. This request will provide one-time funding of $9.795 million in business fees fund for the continuation of the NAP 2.0 program, which will continue funding for the 15 positions previously approved, funding for temporary staff to backfill program positions redirected to the project, funding for interdepartmental services provided by DGS and CDT, and continued planning resources. Happy to answer any questions.
The Department of Finance have any comments? LAO? Committee members? Okay. I just have a few. The project timeline seemed to have shifted significantly, in some cases several years from the budget proposal put forward last year. Can you explain why there has been such a significant shift? Thank you for the question, Madam Chair. I'm Shannon Delgado, Assistant Chief
of the Business Programs Division of the California Secretary of State's Office. So we, and given lessons learned from our previously successful project, California Business Connect that implemented in 2022, we learned that with this project, we wanted to focus more on planning and perform better planning to make sure that we didn't have to continually push out a go-live date. And so with those lessons learned, we wanted to make sure again, we put in proper planning resources and timelines and steps. And with that, we've extended the time in which we've had to plan and come up with requirements, make sure those requirements were where we needed them to be. Additionally, one of the delays was caused because of the 2025 special election. We have, you know, a very small agency. We have folks that are dedicated to different pieces, but the special election did divert some of those resources, which took them away from planning and so it did push out a bit. As of right now, we have been operating on an estimated timeline of our go-live just because we don't yet have a system contractor in place. Fortunately, we did get the pre-solicitation out just last month a couple weeks ago, so we are still tracking to 2029.
Is there a possibility that the department will see further implementation plan changes? And if so, will the department likely need to request additional funding down the road? That's a great question. So as I said, we've been operating on estimates at this point in terms of timelines and what we know and the scope of the project Once we have a system contractor on board which will be next fiscal year we will then have a firm and concrete schedule that we can work towards
So we can't really answer for certain right now.
Well, thank you for your presentation. We're going to hold this item open, and we are going to move to the next agenda item. So we will now move to the Department of Veteran Affairs. will representatives of the department please come forward. And thank you to Secretary Sinn for joining us in committee today. Before we get into the specific budget proposals, we ask that CalVET provide a brief status report on the department. You may proceed when you are ready. Okay.
Good morning, Chair Hurtado and committee members. Thank you for having us here today. I'm Lindsay Sin, Secretary of the California Department of Veterans Affairs. I appreciate the opportunity to be here with you today and to share some important ongoing work of our department And I'm also happy to discuss and take questions on today's agenda items as well But first I'd like to acknowledge some of the achievements that we've been able to Enact over the last few years in the department and really it's a testament to the commitment of our staff Because of our staff's commitment to the veterans that they serve and with the ongoing support of the administration and the legislature we do many things at CalVet very well, including achieving high, consistent, high quality care throughout our eight veterans homes. As reflected in today's agenda, we're making excellent progress on the new skilled nursing facility at our Yonville home. We've also implemented the new CalVet electronic health record project throughout six of our eight homes to date. We maintain strong lending performance and excellent customer service in our 105-year-old home loans program. That includes exceeding annual lending goals, offering competitive rates, and a robust full-coverage homeowners insurance plan. We've also increased the number of permanent supportive housing units for homeless veterans through the VHHP and Home Key Plus programs. And we've adopted innovative pilot programs, such as the California Veterans Health Initiative, which is providing thousands of free mental health appointments to veterans and their family members throughout California, as well as the Veterans Service to Self-Reliance Program, which is helping aged veterans achieve greater housing stability and permanent supportive housing. In short, we're meeting veterans where they are with the resources they need. Sometimes that means administering a program or benefit directly, and other times it means building partnerships with our community-based system of care. So thank you for your continued dedication to the department's work and the support for all California veterans and their families, and I look forward to answering any questions you may have. Thank you.
Are you seeing any areas of increased risk for veterans in general or any particular demographic within CalVet?
That's a great question. I think every generation of veterans, and depending on how veterans kind of identify themselves or where they come from and who they are, have various levels of kind of interest or challenges or issues, and then, of course, some successes. Right now of course when we look at the veterans that we serve in our long care facilities in particular our Vietnam veterans we do see them presenting with higher acuity more comorbidities Sometimes that may mean behavioral health services are needed. Sometimes that may mean multiple diseases or physiological challenges that they may have. So we see the continued need among that population to elevate our levels of care, specifically through skilled nursing. whereas with our younger veterans we certainly see presentations of continued need to engage their communities to engage with their families and making their families a concerted kind of part of their support system which is why with the California Veterans Health Initiative we're offering mental health appointments to both families and the veterans so among that population we see a real need and want for engagement but also continued behavioral health support as well I think all of these things in California are being met through our department and community providers. But of course, we also know the dynamics at the federal VA are changing right now. They are shifting some of their emphasis, and that may have impact on specific populations of veterans. Unfortunately, we continue to see veterans who would I would call otherwise underserved are transgender service members, for example, not being able to stay in the military, and when they return to California, that's going to have direct impact on their lives. So there are ways that we are trying to continue to wrap our arms around and support various populations that may be underserved at the federal level, and that's through concerted engagement, continued look at our programs and how we can make sure those are meeting their needs, as well as just continued conversation that we can have with our community partners and how to support those folks.
Thank you for your answer. And do we have any questions on the overview by committee members? Seeing none. Okay, well, thank you for your presentation. The overview will move to agenda item five, which relates to the Yontville skilled nursing facility at the Veterans Home. And when ready, please proceed with the presentation on that item.
Sure. With me today, I also have two colleagues, and I may point to Deputy Secretary for Veterans Homes, Kobe Peterson, as well as our Deputy Secretary for Legislative Affairs, John Spangler. So the skilled nursing facility at Yonville is now the newest building that we will have had on that campus in a number of decades. This is a 240-bed skilled nursing facility, all one building, that will replace the aging Holderman Hospital building that was, I think, first built in the 1930s. So this represents state-of-the-art skilled nursing care, memory care as well, with a number of great amenities inside of the building. That includes kitchens on every floor, a larger kitchen on the bottom floor, various living and community spaces, including some controlled outdoor spaces as well. It really is going to be an incredible achievement for this campus because the outside of the building also supports the general look and feel of the other buildings that have been created. At this point, we are nearing the end of construction, so we expect to see construction complete sometime around fall. We are working through a few items with our contractor right now, the construction contractor, as well as with DGS, who's our project partners in this, to complete the end of construction. And then thereafter, our next steps will be pursuing licensing that's required by the state and federal governments.
Thank you for your presentation. You have any comments from the Department of Finance? Okay. Comments from the LAO? Comments from committee members? Senator Cavalding, you're recognized.
Thank you, Madam Chair. So thank you. Thanks for being here. And a couple of questions. First, about some of the construction and maintenance projects and related to the skilled nursing and memory care facility. So given the opening of that building, what's the future of Holderman Hospital then?
Right. Holderman Hospital will still be useful for some time because not all of the services that we provide in that building currently will be migrated over to the skilled nursing facility. So we do see continued use potentially of that building. Kobe, would you care to elaborate on that?
So as far as the Holderman building goes, we're going to continue to maintain the clinic, which is in the corner of the building. We've got some administrative functions that will continue to operate out of that building. And then the plan ultimately for the Eisenhower and Roosevelt facilities, which includes our memory care and our ICF, will ultimately transition to RCF, which will be assisted living. So that's our plan for those three facilities.
Is there a live RFP out on the streets on Holderman?
There was one a few years ago, as I understood, but has that been withdrawn? There's nothing pending at the moment? Okay.
For the roofing projects at the theater and the chapel and the independent living projects, I apologize if I was rushing back, if you already covered those specifically, but where do those stand? we've been appropriating funds for them and then we haven't gotten to completion. And so I'm curious if you can share with us where we're at when we might anticipate those getting done.
Yes, absolutely. We are in the process of, I think, finalizing contracts for those and expect that to be happening this year. So as far as roofs go, we're like 90 percent drawings complete. So we're anticipating getting that construction started soon. We also have the steam project, which is going to be started this summer or fall. which is going to be a huge project to renovate the steam system on that campus, and a number of other things. But I think we're on track with both of those projects. We feel pretty good about where they're at. At the heels of the new SNF being open, we'll start right into another project.
Do you anticipate they will be done in the upcoming fiscal year or completed?
The roofs, no. That's a two- or three-year construction project in total because there's five roofs. They will not all be done at the same time. The steam project, I think, takes two years. I do want to acknowledge we understand that we did receive the money to do those projects a number of years ago. We are trying to push this along, and we do want to see those roofs get completed. So I understand that, sir.
And then my last question is actually not related to the construction, but as I understand, at the home, that CalVet had to amend a dozen W-2s for current and former employees, And those amendments had to go back, reach back years into the past in order to redefine the housing as a fringe benefit that was now, that perhaps should have been or was now taxable. And about $400,000 in total tax obligations. And so those current and former employees are receiving or dealing with five-figure, you know, tax bills of up to five figures. But it was not their error if there was a mistake So can you share with us kind of your view of the status of that situation and why the employees what CalVet expectations but how an employee is going to cover a cost like that that was not due to their own error or omission?
Right. So the state auditor found that we had not been reporting fringe benefits for those employees. to the SCO. And when they found that information and brought it to the department, we took a look at it and fully concurred with their findings. So of the 12 employees that were impacted, we have worked with those employees to let them know, obviously, we've met with them a number of times that these fringe benefits that were not being reported, and I believe that was for three years specifically, 23, 24, and part of 25, that that has since been reported to SCO. Those employees have rectified I think with SEO those those fringe benefits as well as what became a tax liability and what we've done really is going forward ensuring that this is not going to be the case in the future so we have completed the SEO or the state auditors findings in this that includes developing an SOP in a process by which we will be reporting this information we've retained the employee at the Veterans Home who's responsible for working with our HR office and SEO we're also redirecting that employee to work directly with headquarters so that we have full oversight of this issue we've talked to the employees in terms of some of the any any resources that we can bring to bear such as EAP if they needed that we have also worked with new leases that are in the process of looking at new leases with them right now so that we We continue to get those leases up to what is closer to fair market value. And so far, those conversations with the employees have been positive, although I know a couple of employees, you know, had brought some concerns to us as well. So we are looking at this as we don't expect to see this going forward again because we're really focused on the process by which this needs to be reported. We are also continuing to look at employee housing in those leases so that the employees understand up front and in the lease what those fringe benefits really are and how they need to be considering that in their annual tax filing. And then we'll continue to have a dialogue with them if necessary as well.
I appreciate that. But for that look back, for that three-year period, I'm trying to imagine, it's hard to imagine it was me and suddenly I had an unanticipated tax bill of $10,000 or more to grapple with. You're saying they've all dealt with that at this point? There's been no help. Even though it would have been, had the error not occurred, they would have been obligated to pay that. But for any of us, if you take a look back at our lives and say, hey, for five years you should have been doing this thing, it was our mistake, but now you have to come up with the cat with all that cash right now to the state and the federal tax agencies that would that is potentially you know economically devastating and so do we in addition to counseling and other assistance is there any other been any other activities undertaken to try to
meet the actual economic impact on on these folks SEO did address this immediately which meant they withheld part of the paycheck of some of the employees so we actually advance their salaries and will expect to get a repayment of those salaries but we extended that to up to 24 months and we're not starting that repayment collection process until July of this year so we are trying to work with the employees to make them as whole as we can understanding that this is a tax liability for these individuals so there is little we can do in terms of correcting the mistake going forward and
And then I think you quickly mentioned that you're looking at adjustments to updating leases to, and it sounded that updating them in raising the rent. So we've talked about those issues here before as well. But, I mean, as these two intersect, I mean, and folks are having to deal with repaying their, you know, their SEO, you know, functionally equivalent to a loan. I mean, is it appropriate to continue with those rent increases as quickly as, I mean, I know you've been working on this for a while, but as quickly given that obligation that some of these employees are grappling with from the tax issue?
For that reason, we've looked at what would be a feasible and appropriate amount of rent increase, and that's going to be about 7.25%, which is in line with the county of Napa, rather than something exorbitant like 25%. So we are considering what a modest rent increase would look like for this next lease year. But we do need to get into new leases with these employees and begin to address some of the audit findings, which include getting these leases up to a more equitable fair market value. And from what we're hearing from employees, this is pretty reasonable, given what the cost of living is out in the community around the area. So, so far, those talks seem to be going well. All right. I look forward to continuing for the updates and perhaps some more details on the specifics here, but I appreciate the Secretary and Madam Chair. Thank you as well.
Thank you, sir.
Any additional questions or comments from committee members? Okay. I just have one question. Is the department facing any staffing problems for the SNF?
Do you anticipate it being fully staffed and operational? We don't anticipate any staffing issues at this time with the new skilled nursing facility as a number of the positions that are currently staffed in Holderman Building will be transferring over to the new nursing facility. We also have, I think, made requests of a few positions as well.
Yeah, additional positions, food service, custodial, laundry. we're seeing some success in those areas as well and so we'll move the current existing staff over and then any new hires into the new facility and we should be fine.
Thank you so much for that answer and we'll just go ahead and hold that item open and we'll move on to agenda item number six. And item six relates to elimination of vacant positions pursuant to control section 4.12 of the 2025 Budget Act. So when you're ready, please begin your presentation.
So when the department went through the exercise of looking at what positions could be eliminated, we took a close and careful look at what positions had been vacant for some time across the department. And we wanted to be able to meet this exercise in a responsible way. That meant that we could give positions back that were not being currently utilized. And so the bulk of those came from the Yontville and West LA homes and were the bulk of which were also certified nursing assistants or CNA positions Because of the after effects of the pandemic of course, you know, we had experienced higher rates of vacancy within our kind of medical type positions across all of our homes. And so we knew it would take time to be able to backfill vacancies and we needed to make some adjustments in order to do so. So I'm confident now that even with giving these positions back, we still have enough of a margin to hire what are still vacant positions and to continue to grow our facility to backfill vacancies within empty beds for the veterans we're taking care of. and we're doing so at the appropriately licensed patient hour per day or the HPPD that we're required to maintain within skilled nursing and RCFE. So because we're also able to achieve a number of efficiencies throughout the department right now, as we look at a number of kind of new ways of doing things, whether that's centralizing certain processes into headquarters or really evaluating what positions are where within our homes, who's providing care on the floor, who's off the floor, how can we change duty statements, how can we change shift hours. Those things have allowed us to continue to find some efficiencies in our budget as well as some efficiencies within these positions themselves.
Thank you so much for your presentation. Do we have any comments from Department of Finance? No, no, no. Okay. LAO.
Drew Soderbergh with LAO. As noted in your agenda, the legislature did not concur with the elimination of these positions. However, the elimination was reflected in the budget. So to the extent the legislature wants to maintain these positions, that would increase general fund costs. And that's just something that the legislature will have to weigh against its other general fund priorities.
Thank you. Do we have questions or comments from committee members? Senator Kvaldin?
I mean, the positions are, I mean, we need these folks. I mean, as is noted in the staff background that we've gotten, we have wait lists between the two facilities of, at least at the time of the staff report, 300 and 336 veterans on the on the wait list and we so we absolutely need need need these folks and to meet our staffing ratios and to make sure that we're we're doing right by our veterans at the same time I recognize that you know having been a State Department deputy director like position authorization is not a position is not it's not a it's not a nurse assistant it's just a thing on a piece of paper if we if and when as I hope we will we'll find resources in order to increase funding to be able to provide those services at both facilities that we that adding back in positions when there's money is not complicated but holding out having hundreds of positions that we're not filling is an empty promise anyway so that I don't have an objection to into moving forward with this proposal. And very much also want to say appreciation to the staff of the Budget Committee and the Senate overall for highlighting these, for raising them through the JLBC process, because they do deserve the additional scrutiny that they have received. I think after taking a look at that and putting them in the context of the vacancies that will remain, and the core issue, which is making sure that we have adequate funding to fill the vacancies that will still be there, that's a more important priority. And so, Madam Chair, I have no objections to this one.
Any additional comments? we appreciate your presentation here today thank you so much and we will hold this item open and we will move on to agenda item number seven, which is an information-only item on the California Arts Council. So when ready, please proceed with your presentation on the current status of the Arts Council.
Okay, great. I'll do center. Are you good? Thanks. Good afternoon, Madam Chair. My name is Danielle Brazell, and I get to be the director of the California Arts Council. It's kind of amazing. For 50 years, we have been leading arts, culture, and creativity for the state of California. That's five decades championing the incredible transformation power of the arts. We exist to strengthen arts culture and creative expression as the tools to create a better California for all. And we support over 16,000 varied nonprofit arts and cultural organizations, and we are the state's only, only public arts agency solely dedicated to providing funding in each of our 58 counties. We provide an array of services, technical assistance, grant making, cultural districts. Our grant programs include arts and youth, general operating support, administrating organizations for folk and traditional arts, artist fellowships, impact projects. We support state local partners and literary programs. And I want to just give you a few examples of our impact. In Sacramento, CAC supported Celebration Arts, which is a local theater organization, engaged in high-quality, extraordinary artistic practices, advancing educational equity, workforce sustainability, while reinforcing the role of culturally relevant theater as a vital economic resource for the students. In the Central Valley, in your district, Senator Hurtado, we provide general operating support for El Teatro de la Tierra to deliver free arts education and instruction to children, teens, adults, providing 96 classes and reaching approximately 5,000 individuals. They develop skills in music and in some cases advance into teaching roles themselves, while working artists are compensated to deliver their programming In South LA we support Kid City Hope Place to provide free music education to first teens and young adults living in South LA For teens in high school, CityKid provides music instruction, performance groups, guidance, performances, workshops. We're all about access. And Senator Kambaldin in your district, Napa Valley Youth Symphony, we're building a regional creative youth pipeline supporting student musicians from beginner through advanced. And these are in areas where many students just don't have access to the tools, the training, the possibility that allows them to grow into their creative lives. I know that you have some questions for us. I wanted just to share some of the good work that we think we're doing. I also want to acknowledge and introduce our extraordinary Deputy Director, Ms. Silmia Britt here, and she's going to answer all of our technical questions for you, but we're here to provide any questions and answers, hopefully.
Hopefully, answers. Okay, does the Department of Finance wish to comment? Jesse, you're on my Department of Finance. No further comment at this time. Does the Department of the LAO wish to comment? Heather Gonzalez with the LAO, no further comment. Okay, we'll take it to subcommittee members, and we'll start with Senator Smallwood-Cuevas.
Thank you, Madam Chair, and thank you so much for that overview, and thank you for what you do. We just heard from our veterans, and of course we support our veterans. There's a narrative and a public understanding of the significance and contributions of veterans, and then we move to art. And when you look at some of the report summary, you see all those dash marks. The question is, do we believe and support our arts? And we know in this moment the attack on arts and culture is a real one.
So someone understands the importance and significance of the arts, whether it's defunding our museums, whether it's defunding programs that target and lift up specialized communities and culture, whether it's looking at the future of our country and making sure that newly arrived residents understand the significance of American art and culture. We face tremendous attack. And so I really am appreciative of you bringing this forward. I want to say art is not just a fun activity, although it is, but it's about preservation of history. It's about understanding our stories. It's about being able to appreciate difference and realize how important it is to our common good and building common ground. So I represent South Central Los Angeles along with downtown LA and Culver City and many other places. And one of the things I've appreciated about the work that you do is allowing communities to really tell their own stories through their culture. South Central Los Angeles has a rich history and work. We work very closely with you on making sure that we were able to allow South Central to tell their black historic story, whether it's, you know, Exposition Park, Sugar Hill, West Adams area, the Black Beverly Hills and the Baldwin Hills. tremendous story to tell but not just for art and culture sake but because of the economic engines that these institutions provide cultural assets provide jobs sales tax not to mention the almost invaluable history of just what the story of South LA is. So I just want to say how important this is, and to have the first state-designated Black Cultural District be in my district is quite an honor, and we are very, very proud to carry that moniker, but I want to say, without resources, it's really meaningless, right? Because we know the story, but how do we project that? And right now, I'm pushing for and supporting a $50 million general fund investment for the California Arts Council, because I just believe that strongly that in this moment, when the federal government is criminalizing diversity, is viciously attacking people's culture and history. California has to stand up, and $10 million of that has to be a carve-out for our cultural districts across the state, including Los Angeles. But I wanted to also point out that, you know, as we're looking at these kinds of investments that, as I say, We can calculate from an economic perspective, from a social and psychological perspective. We know that also the governor's budget has stated that there has been identified $229 million in total savings, including $45 million in general funds from budgeted office equipment and expenditures alone. And so that means we are tightening and we are finding ways to be able to identify where there are resources. And so when we're talking about a $10 million carve out for cultural districts, given what we are saving, it's a modest investment. But it pays dividends in terms of the return to local economies, to our small businesses, to our artists, and to tourism. And I want to lift up that there are many of these cultural districts that are in close proximity across the state to where our Olympics and World Games will be held. it is incredibly important now because next year's budget might not be in time for organizations to have resources to be able to scale up, to be able to welcome 15 million additional visitors into our state to participate in these games. And we know that you can't manufacture the arts and culture. I don't care how many stages you build. You're not going to build a South Central Los Angeles. It's already our built environment, the cultural powerhouse that we are. We need the resources in these cultural districts to be able to show up and show out as we welcome the world. So I just wanted to say how important with the May revision around the corner that the administration reevaluate how we're making this investment and that this is a multiplier investment. This is an investment that will be part of making sure that these organizations can participate in the expanse of humanity that will come to the state and be able to scale in this moment. But they need some on-the-ground resources to do that. I do have some questions in my comments, and I know my comments are long, but I'm passionate about the issue and how important it is in this moment that we don't do Trump's work for him. that we be very clear that we going to lift up DEI and we going to lean into our cultural identity here in California So quick sort of overview that you gave the state originally invested million if I remember because we were here when this happened, of general fund to support the expansion of cultural districts, but then $20 million was later reverted. What has been the impact of that reduction? Can you talk a little bit about that, particularly for the existing districts, but also on the council's ability to grow new districts and to seed others?
First of all, let me just say thank you for your passion. You would say everything that I would say if I could. You know, you just said it so beautifully and eloquently, and we appreciate that. The reversion happened before money hit the ground. So basically, it was initially, and it was before my time, so it was, I think, a budget solution that was pulled back. So the $10 million was essentially divided up, 671 across 10 districts at the time. The cultural district program started in 2017. We had an initial cohort of 10 districts across the state. Those districts received a modest two-year grant of $10,000 each. The influx of those resources over two years actually really did a phenomenal job at helping the cultural districts scale up, hire employees, build out their partnerships, engage in robust marketing campaigns. And the challenge is that that money was a one-time, right? And so we just added 10 new districts. So we initially had 14 districts. We now have 24 districts across the state. And those new districts now have a two-year grant of $10,000. So the program is currently unfunded without dedicated staff and without dedicated funding Those two things it's very difficult to to reach scale and to address the the urgent needs on the ground for these And I'm going to call them organizations small businesses to grow
Can you give also a little bit a few examples too because I I know sort of anecdotally the impact of the cultural district funding on local artists on the small businesses on neighborhood revitalization but can you help to help me to quantify that a little bit can you give me a little more meat on the bones in terms of what that looks like and the role that the council is playing in terms of providing that core funding so we're very grateful that that council actually recognized the importance of cultural districts.
What they were able to do was to actually look at our local assistance grant as a whole, and they took it from that. So that was a diversion of funds that they elected to make this last year in order to fund cultural districts. But we have folks that we're going to penalize in that way. So it's an economic exchange that we're making, and they understand that it did come at a hurt to the overall artistic area. So funding cultural districts on its own is important. I want to bring up one of Our great cultural districts, Calle 24, it's in San Francisco. This is a hub for the community, but not just a hub in a regular way. They're doing health work. So during COVID, they opened up this cultural district to be a hub for COVID vaccines, flu vaccines, and they're still doing that work. They're doing work around neighborhood abatement to keep safety measures going on. And currently right now in our political climate, they're actually working very diligently with the workforce in Sacramento that, excuse me, San Francisco that's undocumented in order to help them with immigration supports and to navigate the complexities of immigration in California. Our cultural districts are not, I think, what we would think of as art. I'm not an artist, so I can say that. I'm a bureaucrat. Our cultural districts are financial stimulus for us. They're ways for us to keep our organizations safe and growing. And that collective body is able to really work within their local governments to get additional rent controls and other local legislation that enables them to increase funding and to support the local community.
And I appreciate that. So it's not just these resources aren't just going for one program. This is about an ecosystem and helping to strengthen and fortify an ecosystem of support that serves the cultural communities that rely rely on them and helping to strengthen and build that network. Thank you for that. Can you can you also share a little bit about to what extent cultural districts are focusing on preservation? Because I know in my district, for example, part of the strategy for the cultural district is to make sure that those places that have been cultivated and tended to by the community, that they are preserved from being displaced, being some of them torn down. So can you talk a little bit about what evidence that has the council seen that our investments have also helped these communities preserve space but also generate some revenue for communities over time through that preservation?
Neighborhood identity and vitality is where people want to be. and when people want to be in a neighborhood, we start to see if you don't own your property, your commercial property, those rents can go up pretty quickly and displace historic cultural spaces. It could be a dance studio, but it could also be a beauty salon or a barbershop because culture happens everywhere. And so one of the, I think, the brilliance of this program in the way it was designed is that it is using state designation to help reinforce cultural preservation at the local level. Because local municipality and local government has control over land use. And so that gives local government more of a tool. And what I am so excited about in your district is the way in which the lead cultural district organization, LA Commons has worked with LA Planning on historic overlay zones and historic places LA to make sure that those historic brick and mortar small businesses stay in Los Angeles and stay in the community because the other thing that we know is is that culture is a currency right it's a it's a it's what we put into circulation And that circulation is monetary. It's about the circulation of a dollar and how long you can keep that dollar in a community. But it's also about the circulation of an idea and of a way of being. And the cultural district is that three-legged stool that's a partnership between an arts and cultural organization, local government, and business to build out and retain and to create the future through a lens of self-determination. determination so that it's not just about getting displaced after South LA was redlined and had so many barriers to economic opportunity. Now all of a sudden those barriers are being eliminated by the great work of our leaders and now how do we make sure we retain the soul of a community through the cultural district designation.
I so appreciate that because that happens also through employment and jobs. And that's the other sort of side of the coin of cultural districts is economic engine and employing and oftentimes folks who wouldn't traditionally be employed in other places. And so can you talk a little bit about the data that you all have in terms of how and I know we have been fighting for payroll for artists. we understand the significance of the economic contributions, but what are we seeing in terms of job creation, cultural workers, small business creation? Because it's not just the, for example, in our cultural district you have the Barbara Morrison Theater, but there's also Aki Bamboo that's next door. It's Caribbean food, and so after the performance, then the food, right? So there's this sort of circular economy that is happening in these communities. But can you share a little bit about what the impact is on job creation and small business sustainability? And that leads me to a question because we have GO-Biz and other entities that come before us that have resources that we question in terms of, you know, how are these resources allocated? Is there partnerships in terms of the economic development, small business support network that converges with the work that you do at the council? So talk a little bit about the economic impacts, but also talk about is there a partnership? Is there a way of sort of doing more to integrate support?
Why, thank you so much for that question. And the reason why I'm smiling is because the California Arts Council just released the creative economy plan for the state of California. There are six action priority areas, and we crisscrossed across the state doing about, you know, 30 town halls after this report was released to really get the feedback of, are these six action priorities right? we are the California Arts Council and we have a slice of the creative economy a really important slice of it but we are we are small by state standards and so it is about partnerships and it is about partnerships with OSBA and GoBiz which GoBiz by the way did include the creative economy as a pillar in their Jobs First initiative We're also looking at labor and workforce development, because we also know that every community, not just Los Angeles, not just the big cities, but in our small towns up in Chico and down in Imperial Valley, There's actually a creative economy there that actually needs to get supported, and it manifests through creative workers, because, of course, we know that arts work is real work. And that means that we have to build up on those partnerships with state agencies, specifically around access to capital, specifically around access to financing and technical assistance. And that's the work that's going to be happening over the next couple of years with the partnership of our other state agencies. But we still have a lot of work to do in that. So if I could mention, and thank you Danielle for that, it was a good tee up, so I'll close it with some fact words for you. So we've actually been working with Stanford and we were able to have a fellow join us. So we have a fellow that will be assisting us this summer. We also were able to secure a couple of interns. And so we've been pulling all over to try to get resources to help support our data evaluation manager and our race and equity manager in understanding the workforce element that's the undercurrent and developing key ROIs. We've been looking at some of our national partners in order to do some of that work. We're seeing the anecdotal pieces, but we need to put pen to paper and start to put out that California model for cultural districts. I also want to mention that there is very much we're noticing and again this is anecdotally at this point in time because we're still kind of new and in that it's only been around ten years since this has been up and running we're hearing the extra work that work of the dishwasher who works at your favorite restaurant the person who is doing the valet they are a part of that cultural district they are being sustained in the creative economy and through this so when we're looking at that designation we are looking at this piece of society that everyone just walks around and doesn't recognize it's a workforce it's an industry and i think you made a really good point around how funding is deployed for business supports through gobiz and other organizations the reason why arts funding and cultural districts funding is more appropriately paced here at the arts council is because artists work with artists. So when artists work with GO-Biz, it dilutes the culture. And I don't mean any digs at GO-Biz. They're a great organization. But arts funding held by a cultural bearer is different than when it's held by a business organization. And ensuring that we allow for these arts organizations, small businesses, and nonprofits to be able to stay in the vein of where they can create and do that big work. and just allow them to do that, and that's what we have and the benefit of the funding coming to this organization.
I want to get back to your point about the number of jobs, and I think that this is an important piece, and I'd like to get back to you with the actual reports of the actual numbers of jobs that the Cultural District and the million helped to create But on average every grant dollar that the state puts out generates an additional six to nine dollars Every grant is essentially matched multiple times So we really see that
that gets matched. And then as you pointed out, there's this other multiplier, an accelerant that happens within culture. We know that it's that binding agent for a connected community. And when that connected community starts to thrive, it just gets accelerated in ways that we're really seeing in South L.A., but it has taken some time, right? It's not, as you mentioned, it's not quick work. It's the long, long work that has a tremendous amount of equity by the leaders of that community, and we have to go at their pace.
I absolutely appreciate that and particularly the point about ways in which the administration can think about the complexity of arts and culture work and figure out ways to bring some of those traditional business resources into this arts and culture economy because absolutely right. business plans look different the jargon looks different how you spend the resources the cycling of dollars looks different but certainly the fourth largest economy in the world should have a world class arts and culture investment that matches the dynastism and the beauty of California and you named some of the places across the state where we know we have the best cultural experience that anyone will have in the world. So appreciate that. My last question is that we don't have time, though, because the World Cup is June next month, and the Olympics is, you know, 18 months away. And so what are the partnerships that are being built between the Arts Council, local governments, our state tourism, our local tourism entities, around neighbor revitalization programs. What are the partnerships that is the state helping to build as those cultural districts that are in very close proximity to Olympic venues? how do they get the support because we don't have two or three years to develop but certainly we know we have resources in a number of different places as you're saying it's like how do we is there are there partnerships and is there a way to pilot some of this in the short term with some of these districts that stand to see tremendous investment where you can really look at workforce development where you can really look at technical technical assistance small business specialized technical assistance where you can also think about ways that they can scale so that part of our investment is helping them to capture more resources and to accelerate and I like that term to accelerate some of the outcomes and stabilization that we want to see what do those partnerships look like are we being very intentional about the timeline and how we're rolling those out with the World Cup and Olympics in mind you
Hit the nail on the head, it is about scale, and in order to reach scale, you have to have capacity. And that means you have to have capacity at all layers of the system. And I will say that just knowing what the cultural districts in Los Angeles are doing right now, We have three in the Los Angeles area. And of course, those organizations are taking it upon themselves to organize new cultural districts in the Los Angeles area. So what we see in our sector is we see an extraordinary group of partners working across regions, counties, the entire state to learn from each other, to leverage every bit of resource that they have at the state and at the local level. And I think that we're doing the same, but we also run into those same challenges around capacity, right? And so we've rolled out this next round of cultural districts. We just launched this new cultural plan for the state of California. There is an ongoing working group that has participants from GOBiz and labor and education and workforce, all pushing this notion of how do we accelerate the creative economy for every community in California. And I will just mention, you're right, we're in we're already in the midst in the stream of very big events for our state and if we do not seize the opportunity then we'll leave money on the table. We've got all these folks coming into our beautiful state and we've got to have it happen. We're very lucky one of our grantees So it want Silicon Valley creates was actually awarded some federal funds because we don't have access to state funds to award them to them But they were able to secure some federal funds to help out with the World Cup in 2026 We've started to meet with them to make sure that we're wrapping around them and that we're engaging and providing Whatever support that they need we're going to do that organically because that's what the organization's mission is to do and we're mission driven however what we could provide to the overall arching community is is going to be lacking because of the resource constraints I will tell you from a staffing perspective we are fully staffed and we like every we're fully staffed yay except for we're understaffed and so there's always going to be the threat of taking on more, but ambitiously so. We have still dipped our toe in the water, have continued to do the work. Any additional funding that we do, we will accelerate it, we will multiply it, and make sure that California gets the recognition that it deserves during this time.
I appreciate that, and wow, federal government gave some arts and culture money to Silicon Valley. So I will say we definitely know that this administration likes to pick and choose, and we can't afford losers in the cultural game. And so I will continue to push for the $50 million investment. I fully intend to see that we get that $10 million to our cultural districts, and we'll fight for that. AND I THINK THAT IS A VERY IMPORTANT POINT THAT WE HAVE TO MAKE IT VERY CLEAR THAT EVERY SINGLE CULTURAL DISTRICT DESERVES TO HAVE INVESTMENT I think that is a very important point that we have to make it very clear that every single cultural district deserves to have investment We can allow the federal government to pick and choose This is California, and all of our cultural expressions need to be uplifted and supported at this time. And I think that's what we've done on this sub four and hope we have the continued to sport to do it this year and and make sure that we have California shine. So thank you for answering my questions. And thank you, Madam Chair, for allowing the time. Any additional questions? Senator Cabaldon.
Yeah, I was very excited about the cultural districts last year. I still believe in everything that the senator, my colleague said. But all of California is not in this program. There isn't a single cultural district in my district, despite our best efforts. There's not a cultural district designated in most of the Senate districts that adjoin my Senate district. The designations that were made in December, there's not a single one north of San Francisco. There's no there were none made in the north coast, none made in the north state, none made in the Sacramento Valley, none made in the southern San Joaquin Valley, none made in the high desert. The first round had none in in my part of the state, none in the southern San Joaquin Valley. So either the capacity is not there or we're not, and I recognize the Arts Council and their fantastic California leaders that serve there. They're not bringing the perspectives of the whole state. I mean, there's no one on the Arts Council from north of the Tephasapies other than San Francisco and San Jose. Inland Northern California is not there. So it is incumbent on the agency, I think, to really be looking, because there are no places in California where culture doesn't exist. It's what we're valuing, what we're measuring, what we're supporting. And so I agree with the promise and also with the results that we've seen for the cultural districts that have been designated. But I certainly hope that we reach more of California and lift up culture, particularly in the non-cultural urban areas of the state, that are authentic representations of culture, not from the lens of people from the urban areas of the state. who often, their archetype of what culture in rural or suburban California looks like isn't necessarily what people in rural and suburban California see for themselves. So it's just, for now a couple of these rounds, and I know for the chair of Senate District and my own, but many, many others, that obviously this takes resources, but we need to assure that the culture everywhere is is being uplifted and translated as sort of community economic outcomes that have been so eloquently described by Senator Smallwood Cuevas. Senator Cabaldon if I may I so
appreciate and I'm hearing I'm hearing your I'm hearing the energy in your voice because I know that this is something you care about and I want to just say I care about it too And we had the authority to designate 10 new districts with We received over 70 applications Only 20 made it to the next round, and we only had the authority to designate 10 for the fourth largest economy in the world. I agree with you that this is such an important program. I'm pleased that we were able to designate Fresno and Merced and Watsonville, but it's not enough. It's not enough because virtuosity and culture exist everywhere, and it is our job as a state agency to be able to fill that need, and we are struggling to do that. I would love to provide you with a list of our current cultural districts. One point I want to make is that in total we had 150 applications since 2017, and we have only been able to designate under 25%. So you can see we have 58 counties, and in every county that need is great. I am born and bred in Sacramento, California. I can tell you where I like to go for culture, and I know that there's probably five or six places that need designation in the city that I was raised in. And so what we're really looking at is understanding that there's a need, but knowing that, again, that financial support to go provide that capacity building to those neighborhoods to get them to submit applications that are at that cream of the crop. We need to be able to do that work now to get them ready for the next round. We do not have any funding to do so, and so that's why we're continuing as we can. and we're very fortunate to have our council who has still championed this program despite the fact that it's not funded. So they took it upon themselves in their various districts to say, we still have to get behind this. We know that this is not in our wheelhouse fully because we've got people over here in tourism and go-biz, but this is important to us and it's important to holding culture in the area. I will also mention in Nevada City, correct, we have a cultural district, and it is very engaged, and it's an economic stimulus for that northern region. We know our rural partners do not get a lot of support, and there's often a bit of an equity issue in the distribution of resources. So for Nevada City to have that designation is a great economic impact, and I'm going to make a little plug next week. We'll be there for our council meeting if you'd like to come on a tour. We're happy to have you.
Yeah, just to follow up, Nevada City, Turkey, these are these are beautiful historic districts they've been there for a long time there there and and others that have been designated some of which you've mentioned there there parts of communities with storied histories and the subject of you know great American literature and that was covered in my ethnic studies class all things that people from the outside can see very clearly and if they happen to be from San Jose or from from LA that oh that's that's really great. Attaboy, rural California. That's not the same as Fairfield or Vallejo or Avenal. It's just like, okay, just regular places that are trying to mount this. And so when our definitions of the cream of the crop consistently produce large holes in the coverage area that California is facing, the Southern California Valley and my region is two examples, when that is consistently the case, it's either incumbent on us to do something about it or to re what our definitions of what cream of the crop really means So I know you get this I just think it important that we deliver in these parts of California so that nobody's being left behind. Thank you, Madam Chair.
Thank you. Thank you.
Senator Cabalden does an amazing job at capturing the questions and comments that I'd like to state. Thank you, Senator Cabalden. You've done it again. But I actually have a few more. Again, thank you for bringing and mentioning the lack of districts in rural parts of California. That's definitely something that I noticed as well, representing the southern San Joaquin Valley. and looking at the document that shows where the new designated districts are located, at least from what I saw on the document, there's a gap of 200 miles from north to south from the city of Merced all the way down to the community of Arvin. That's 200 miles that also expand east and west. that don't get to be part of this at all. That's a major problem for me, and I know that there's more that needs to be covered that is not part of it. So just how do you come to designate districts? Can you explain that a little bit to me, please?
So, and thank you so much for the question. And so Council decides which programs to open annually, and we will do that again this year at our September meeting. They will decide which one of our grant programs get opened, and then we move forward with opening those programs. In terms of setting up the criteria, it is a competitive process. But the competitive process is not to exclude small towns, suburban areas, or rural areas. It is actually created so that every community can speak to what makes their community special. There's an outside panel that scores and ranks those, and then that gets processed independently of the council. that council then reviews the process and will approve the slate as recommended or not. But council has the authority statutorily to decide which programs, and then they decide how much funding from our local assistance budget comes in, and then which ones actually are designated. I also want to mention that every grant maker's Achilles heel is the grant applicants ability to tell their story properly. So in terms of you asking the question, what is needed? When we looked at all of the applications, all of the cultural districts showed extreme promise, the ability to generate economic revenue, but really the differentials were in how they describe their funding strategies and how they describe their network of engagement with local government. When we looked at some of the applications, because I physically went through them myself, so I can tell you this for a fact. When I went through the applications, that was the differentials, the storytelling aspect. And so when we talk about the broad, state of California this is a grant makers nightmare is that when we go into the rural areas and often in the urban areas folks don't know how to put together grant packages they don't know how to tell the story they don't have their fiscal pieces together and so as we prepare to continue to highlight this is an opportunity for the state we do need support in order to do that technical assistance and capacity building so that we can go out and say hey well this is a way you can tell it and when you come up for the application it'll be great but also the amount of applications that we approve so again we're looking at 10 years almost 10 years and only 24 so the funding and the designation have really hampered our ability to designate more I I think those are really important points I would also add we did a tremendous amount of robust technical assistance on this. I would like to see this program offered biannually. And I am really wondering, so we had an outside consultant do a gap analysis, and we're happy to share this gap analysis with you. They looked at, we had 14 cultural districts in the initial cohort. We didn't have one African-American district, right? We didn't have one district in the Central Valley. We didn't have, we had two districts north of San Francisco. So we really needed to say, okay, how are we going to cover the entire state of California? So we had an outside consultant, did an incredible job, and the gap analysis informed our approach this year. But again, we only had approval to do 10 districts. I think that we need to rethink designation from funding. And if we can run designation on an ongoing basis and then funding goes with our annual programs, that might help us catch up to where California needs to be. There was a pandemic in between. There was some staffing changes with the agency. So we are definitely behind the curve of where we could be in California. And it's going to take us a couple of years to catch up.
You mentioned that there's an outside panel that's part of the process of determining the council. Can you elaborate a little bit more on that? So very similar to science, science uses outside a panel of experts. So who are these experts?
Yeah, they're community practitioners. They're folks that work in the cultural space. They are people from local government. They are people that reside in rural parts of the state. They are people who are, and this is for all of our panels. Every one of our grant programs is adjudicated through an expert peer panel review process. We have that, and again, that is consistent with the science community, and it's consistent with every public agency that does arts grants across the country. That is the way in which we have done it. this particular panel had a pretty robust group of people from all across the state of California and some outside of the state so member her title I just want to mention that our staff are heavily involved in it too so as we talk about the panel and council and all these other folks touching it there very much a tee and a hand through different parties and evaluating the standards of the application from the cultural district. So the panel process is a key step, but prior to getting to that panel process, it went through the agency and went through a lot of reviews and analysis and making recommendations to council, as Danielle had mentioned. We're happy to provide you with a list of the panel members for cultural districts for the last round.
I think it would help to tell the story a little bit better about how these folks are looking at the applications. I also want to mention we did site visits, and the site visits were helpful as well for the cultural districts to talk about the nuance of the neighborhoods, to talk about the safety issues, the funding issues, any challenges that they feel that they have in organizing. Because really and truly our cultural districts are, it's really organizers, right? It is that ecosystem of businesses that are coming together, and they all kind of work in that way. So the panels that we have do support that from a cross-section of individuals. But typically how many people sit on that panel? Do you have, you know, do you, every year do you go through a new panel? Where are these members from? How long do they serve? Every year we go out. So essentially a grant is basically a contract, right? It's an RFP. And so we go out for peer reviews. We have a pool of panelists that go and score and rank based on an established set of criteria. We take great pride in making plain language for our grant programs, having very clear technical assistance and opportunities for office hours for all of our applicants. As a matter of fact, we're just finishing up our annual round. For the cultural district program, this was a little bit more of a high touch. And this panel in particular was extremely seasoned, well thought out, cultural experts who are specifically working in place and culture. It is different than, let's say, working for an arts organization, because remember, this is a three-legged stool. So we have somebody from Visit California. We have somebody from the former city of Oakland. We had somebody from Los Angeles. We had somebody from the Central Valley. We had somebody from upstate, right? So these are all, you know, we're trying to make sure that we have a panel of experts that can be impartial, that can focus on the criteria of what the program is, and put forward a set of recommendations based on that. And member Hurtado, if I could add around our panel process. So we have a race and equity manager, a racial equity action plan, and we use something called a decision support tool. So as we making these decisions and going through we documenting the impacts and the issues that we see and really discussing them as a whole So with our panel process we also have a data manager that I mentioned and she gone through and reviewed our panels and we at about under a 50 churn So every year we're getting about half of the panel being new folks, which is very good because we still have our panels anchored by seasoned members of our communities and the arts leaders, but we have new people that are coming in with fresh perspectives and joining those panels. So it is a highly complicated algorithm that we end up using in order to set all of the panels and to have holistic panels where they're kind of balanced by their number of years of experience in a specific industry or discipline. Okay. I won't continue to ask questions on that particular one, but just based on what you told me you said that there is someone that was selected from visit California. Someone from the Central Valley, someone from Los Angeles, someone from I think you said the Bay Area as well. And in terms of designating these new art council, cultural districts, I mean, it seems to me that the new designations kind of seem to fall within those areas. And so I understand that they're experts, and I think that's a very important piece. I also, you know, again, the northern part of the Central Valley was covered, but there was a 200-mile gap that wasn't considered or thought, you know, put any consideration in there. And so it seems to me like there's some bias in this designation process that really needs to be reviewed. reviewed and and and considered the the next question that I have goes it's in regards to the breakdown of the support and operations and can you break down what the that the six at least a six point two eight six point two million that that was allocated in the 25 26 fiscal year our operations budget yes Yes, so we have, Jessie, it's okay, I take this or you got it. We have 31.5 staff members. We're located in Atomos, so our budget really is about staffing. This year our salaries and wages and benefits costs went up significantly, a little under a million. So we've adjusted for that. But really our budget is salaries and wages and then some contracts to support the lack of staffing. So IT contracts, a shared services contract with the Department of General Services. And I think that amount also includes staffing support for arts and corrections, programming contract with the Department of CDCR, excuse me. And how much of that is in terms of the position for the contracting piece with CDCR? We're allowed to keep $800,000, and we're funding two full FTEs, and then we are apportioning additional supports around the contracting, the other consulting needs that come up. So the arts and correction budget is about 7.2. We're in every one of the correctional facilities. We put artists to work directly in those facilities through long-term contracts. And 8 million CDCR. Okay. Right. So that what I see 7 million and it ongoing So can you elaborate a little bit about that program what it looks like what type of work And I have probably the majority of prisons in my district quite a bit, so I'm just curious to understand what that covers, that contract, because it seems to me like it's a very significant and important piece to the Arts Council because it's quite a bit of money. I mean, more money than the cultural districts, what it looks like. Yes. Yes. Arts and corrections, we need. We need it desperately. The things that are happening with our arts and corrections funding are remarkable. One of our contractors, Creative Acts, led by Sabra Williams, is going into maximum security prisons in solitary and providing VR programming to those incarcerated Californians and helping them to reduce their send-outs to solitary as well as improve their ability to receive credits and release early. So we're seeing this arts and corrections program the way we have it structured. It's managed at the California Arts Council. As we onboard these contractors, their programming enables our incarcerated friends to have RAC credit, which is credit that takes time off their sentence. So as they're going through these programming and doing Shakespeare or doing these very interesting things, they're actually moving closer to releasing. Another interesting thing about our Arts and Corrections program is similar to what you're doing with SB 1012. We have a workforce development component, and we're really trying to wrap our arms around it. So what's happening is folks are going through programming, learning these amazing skills, and then our providers are actually hiring them back in, and they're going back into the institution, sharing their wisdom and experience in order to change the thread there. The Arts and Corrections program is very lean. I run it super lean so that we can get the bang for our buck. And recently we were just tapped by CDCR to help them to support a restoration of the Greystone Chapel and Folsom Prison so that we can help them to keep these historic pieces in play. And we'll be using one of our grantees to help consult and support that. So we very much try to keep the thread there, but we're in arts and culture there. And it has helped, I think, a great deal in terms of safety. And again, we're working this year. We have a contract with San Diego State University in order to do some research and evaluation on our arts and corrections programming so that we can publish some more data on the impacts specifically around the health component of arts therapy in incarcerated settings. I don't have any additional questions or comments at this point. Would you like to add some? I appreciate that. We know that Arts Inside is about safety, safety of the state workers and safety of the residents who are there. I think it's important, and I think this is the point you were getting at, Madam Chair. We also can reduce risk and increase safety and increase revenue outside of our communities. when folks come home when there are cultural programs that are funded when there are arts jobs and careers that are available When we have arts programs and so you know, I think it's important for us to recognize the benefits of making significant investments inside, but we also need to make those significant investments in our communities, too. So I think that's the point. And I'm glad to see that we are making that investment because we know at the end of the day that saves taxpayers money and it keeps everyone safe. Thank you so much, Senator Smallwood-Cuevas. That's exactly, I didn't want to, you know, That's essentially what I was trying to get at, right, is that, you know, for me, there's a lot of children that, you know, could benefit from additional funds. So to me, it's just seven, you know, it's a lot of money. It's a lot of money that could be going to our kids that desperately need it right now. our kids that our communities were you know and especially in this time with AI that we want to have them to be more hands-on and do the arts and provide all the benefits that it does I just you know I that's all I'm gonna say on that on the matter it's just I think there's a lot more a lot more we could do a lot better we're in very tough budget times you all have a job that I do not envy we appreciate the support and the engagement and know that you'll have to make very hard decisions for all of California so thank you thank you so much for your presentation we appreciate your time and we will go ahead and move on to the next item which is we're moving on to the military department and before we get into specific budget proposals we're going to ask for an an overview, a report from our military department. What's going on, brother? I see you. Yeah, how are you? You may proceed when you're ready. Madam Chair, members, after hearing that Arts Council pitch, I think I'm going to stay after and get in the public comment line to advocate for their funding. So I'll just share you with that. But anyway, it's amazing, right? Yeah. So I'm Matt Beavers, and I run the military department in the state of California. And the budget item I'm going to talk about today very briefly is $15 million for FY26-27, another $15 million for FY27-28. and that's to fund the ongoing state portion of our counter-narcotics program. As you well know, about $40 million is federally funded each year. The state puts in another $15 million. We primarily use that $15 million to fund our operations in support of Customs and Border Protection's Office of Field Operation on our five ports of entry along our southern border with Mexico. We also fund that in a variety of other ways, our support to CDCR, And we do some work there on counter drone operations to make sure that folks don't fly fentanyl and other dangerous drugs into the yards using drones. We also use that money to help a variety of states or cities within our state. And I'll give you a great example of that. A year or so ago, we helped the city of San Francisco develop their counter narcotics, counter fentanyl task force, built a strategy with them. And we're able to implement that. On top of that we also were able to fund military attorneys to work in Brooke Jenkins district attorney office in San Francisco So that the type of resource the type of operations that we can execute with state funding Generally, we cannot do that with our federal funding. And with that, I'll take your questions. Okay. We'll just move on to agenda item number eight. And Department of Finance, do you wish to comment? Matthew Berkey, Department of Finance. Nothing further. LAO? Heather Gonzalez with LAO. No particular comments on the substance, but we would remind you that this is general funds, so we would encourage you to consider it in light of your other priorities for general funds. Committee members? No? Okay. My first question, could the state funds appropriated in this item be used for immigration enforcement purposes? Absolutely not. Okay. I'm going to be super clear on that, Madam Chair. That would never happen. Okay. Thank you. Your answer was very clear to me. Thank you. And then number two, besides the weight and street value of drugs seized by CalGuard, how do you measure the success of the program? So a couple of measures. I'd offer fentanyl deaths across the state have gone down, and I'm not here to say correlation equals causation, but it's one metric. What we generally use, the success or failure, is the return on investment. So for every dollar appropriated, that $15 million, we're supporting the seizures of about $3,000. So that's an extraordinarily high return on investment, right? And on top of that, it's not just fentanyl coming across our borders from south to north. We also use this money to interconnect money going south into Mexico. And we're able to do that with this $15 million, supporting a variety of federal, state, local, and tribal law enforcement agencies. And if this appropriation is rejected by the legislature, will CalGuard still receive federal funding? We will. Okay. Do you know more or less? So we expect about $40 million in federal funding across supporting the four high-intensity drug trafficking areas. If we don't get the 15 million, what will happen is we'll have to dramatically degrade our support to the high-intensity drug trafficking areas. They're in the California, Central Valley, L.A., San Diego, Imperial. And we'll lose support there. The folks that rely on our analyst support in those high-intensity drug trafficking areas absolutely rely on these kids that do the work for us. We need to keep them in those seats working with our federal, state, and local tribal partners catching bad guys. And we have to stay on the border. Customs and Border Protection, Office of Field Operations, so shorthanded that if we don't support them, they won't be able to do the work. They won't be able to do the secondary vehicle inspections. They won't be able to do X-raying the vehicles that come across. And they'll be 50 percent degraded on that. So we need to keep going. Do you expect any changes in the way that you currently are running this program with federal funds that come down? No, it's working extraordinarily well, in my opinion. This will be just the fourth year now that we've had it. And I'll give you a great example. So when we first started the program about 26 or 27 percent in the aggregate of the fentanyl that we supported the seizures of was directly attributed to that 15 million Today it almost 90 So we are applying that 15 million directly to get after the fentanyl challenge along our southern border So your counter-drug activities plan won't defer or will still refer to our plan instead of whatever the national plan? Absolutely. They'll be executed in parallel. Okay. All right, I don't have any other questions and none from committee members. Okay, we'll hold this item open. Thank you so much for your presentation. It was a pleasure. Thank you. Thank you. And at this moment, we'll begin public comment on all items. If you wish to comment, please make your way to the microphone now. state your name and your affiliation and we ask that you please keep your comments to no more than one minute thank you madam chair members Paul Yoder on behalf of the San Mateo City and County Association governments and Sam trans in support of the VLF backfill for San Mateo and I also want to thank Senator Cabaldon on behalf of the Napa County Board of Supervisors for his continued vigilance on the VLF issue thank you good afternoon chair members the committee Julie Baker with California arts advocates we urge support for senator Smallwood Cuevas's request to increase the California Arts Council's grant making appropriation from 24 million to 50 million with 10 million earmarked for cultural districts program this modest high-impact investment supports all California communities they have a program called state local partners that is in every county in California addressing issues like isolation and loneliness public safety health and economic development despite over delivering the agency's funding remains below 25 year old levels this request has bipartisan support and is backed by nearly 350 organizations including unions businesses nonprofits and mayors Lee and McCarty I just want to also say it would move us from 35th in the United States for per capita funding to 20th in the top 20 if we did that and directing the temporary AI boom surplus to human creativity is a fitting affirmation for arts workers also with a 10 million carve out for cultural districts thank you for that long conversation we thought it was really interesting I think it's really important to also recognize what director Brazil said that going forward designation and funding could be separated for example designation could be criteria based while funding could be competitive that would actually allow for many more districts in the state of California and then with an appropriation you could have that be competitive. Thank you for your time. Good afternoon, Madam Chair, members of the committee. Mike Callaghy, the County Executive of San Mateo County. Thank you for looking at this issue in regard to VLS. Senator Cabaldon, you articulated it a way that I have never heard it articulated before. It was so clear and concise. Thank you for that. This is the greatest taking from a county probably in the history of this great state. I would ask you to support the backfill, give us time to work on a long-term resolution with DOF so that we can find a permanent fix that is equitable to the residents of our county and other counties around the state. Thank you very much. Thank you madam chair members. Jean Hearst here today on behalf of the urban counties of California, the rural county representatives of California, and my colleagues at the California State Association of Counties and the League of California Cities. We are here today in support of the BLF backfill to San Mateo Alpine and Mono counties I also want to extend our appreciation to Senator Cobaldon for elevating the disparate impacts of this issue Since 2012 this has been an unintended consequence of the 2004 agreement, and we stand committed to an equitable solution for these communities. Thank you. Good afternoon. Audrey Ritaychek on behalf of the City of South San Francisco in support of the VLF backfill. Thank you. Good afternoon Chair Huttado and members of the committee. My name is Jenny Darlington-Person and I'm the Executive Director of the Arts Council of Placer County. I'm also here representing the coalition of county arts agencies and as a board member for the Association of California Symphony Orchestras. You've heard the I mean the California Arts Council and Julie Baker both gave great information about the impact and the statistics and the facts around arts funding and how important it is the California economy and arts and culture I want to put a human face to this funding though last week I received an email from Sarah a resident of Placer County Sarah told me she was a recipient of a scholarship for an art retreat made possible by CAC funds in her email Sarah shared with me that she had been the victim of a violent robbery and and essay and that afterward she checked out she experienced addiction and severe PTSD Sarah said her shame made it difficult to accept the scholarship but she was grateful she did because the program created specifically for survivors of violence was as Sarah put it magical by funding the CAC you became a part of Sierra's of Sarah's healing journey I think we all know the statistics there There are millions of Sarahs across this great state, and now imagine how many Sarahs you would help if twice as many grants could be given out. That's the impact you could have with what some have described as a bit of budget dust. I urge you for all of the Sarahs out there, and the kids who need art, and the artists who need jobs, and the communities that need innovation to support the $50 million budget request for the California Arts Council. Thank you for your leadership and support. Good afternoon. My name is Rachel Muller. I'm with CalCCI, a coalition of more than 60 CDFIs here today asking for your support of a $50 million budget request over three years to support the California Investment and Innovation Program, or CalIP. CalIP is administered under the state treasurer's office under CPCFA. This request is being championed by Senator Grayson and by 90 organizations across California. CDFIs are the financial sector for the public good. We finance affordable housing, small businesses, entrepreneurs, health clinics, and other child care centers and other essential community services in places where traditional financing is hard to reach or come by. When we talk about affordability, these are the types of priorities that we talk about, and these are the exact projects that we finance. But affordability needs financing to work. CalIP does that by providing CDFIs the ability to leverage every dollar of funding with eight dollars of private and philanthropic capital. That's dollars that would otherwise not be invested in underserved communities. CDFIs have a tremendous impact in every district in California. In Kings County, for instance, a local CDFI Access Plus Capital provided much-needed technical assistance in financing to Manitas de Amor preschool and childcare, helping expand their access to families who needed expanded childcare and family services Calip ensures that great organizations like access plus capital can continue to do that work failing to renew this program means less capital underserved communities and fewer opportunities to strengthen those local economies. Calip is a proven tool that advances California's affordability and economic development goals, and we respectfully urge your support. Thank you. Good afternoon, Madam Chair Urdado and committee members. My name is Cherise Malabran here on behalf of the Office of Cat Taylor. We enthusiastically support full funding for the Treasurer's California Investment and Innovation Program because CDFIs deliver critical financing to under-resourced communities and they're not just lifting up individuals they're lifting up entire generations we respectfully urge you to support this program thank you good afternoon madam chair and members my name is faith Jane McKinney and I am the founding director of black artists foundry a 501c3 nonprofit organization that supports black artists across California through funding professional development and public programming I'm I'm here today in strong support of the request for $50 million in ongoing general fund support for the California Arts Council, as well as continued investment in programs like the Performing Arts Equitable Payroll Fund. Public investment in the arts is not optional. It's a matter of equity, infrastructure, workforce development, and long-term community sustainability. In a sector where black-led organizations continue to receive less than 1% of philanthropic funding, state support plays a critical role in ensuring artists and cultural organizations can survive, grow, and contribute to the cultural and economic life of California. The California Arts Council supports more than programming. It supports jobs, small organizations like mine, cultural workers, public access to the arts, and pathway for historically under-invested communities to participate in California's creative economy. California has an opportunity to lead. Thank you for your leadership. Thank you to the artists and advocates who continue showing up, and I respectfully urge you to support this investment in California's cultural future. Thank you. Good afternoon. My name is Analia Kelly, and I'm a social practitioner at Aspire House in San Mateo County. We're a mental health nonprofit focusing on psychosocial rehabilitation. San Mateo County is owed over $114 million. This isn't charity. This is our money, money that Sacramento is withholding while our constituents die. Every day you wait, someone doesn't wake up. I've lived this. I know the sharp ache of hunger pangs that won't stop, the isolation of living on the outskirts of society, what it means to be seen yet unseen because of mental illness. I've stood on that edge where a therapist, a case manager, a doctor means the difference between life and death. Every day you wait, someone doesn't wake up. I've witnessed firsthand what programs like Aspire House can do for people with serious mental health challenges. They don't just help, they transform lives. Aspire House improves well-being through higher employment rates, better physical and mental health, and decreases in mental health hospitalization. A year of Aspire House services costs the same as two weeks in the hospital. These services are free to members because of county resources provided through VLF funding. Right now, loneliness is an epidemic in San Mateo County. The VLF funds we're owed, not requesting but demanding, will ease the gnawing hunger of families choosing between rent and groceries, shelter, the unhoused freezing on our streets, create jobs and build communities where children, seniors and the differently abled can thrive. Every day you wait, someone doesn't wake up. This money provides addiction treatment that keeps people alive and out of jail. It funds the social safety net of psychiatrists counselors and case managers that literally saves lives This funding breaks the cycle of poverty It restores self It gives people back their dignity their futures 55 counties get their full share. Why not us? We won't stop fighting because every day you wait, someone doesn't wake up. Lastly, I would like to say for those who continue to withhold the funding that legally belongs to the constituents of San Mateo County, the blood of those who die while waiting for housing, treatment, and care is on your hands. Thank you. Good afternoon, Madam Chair and members. Jasmine Valle on behalf of the Low Income Investment Fund. Access to child care is essential for working families and for a functioning economy, but child care providers often struggle to access the financing they need to expand or even sustain their operations. Cal-IP is critical because it allows us to finance child care facilities, helping providers expand capacity, improve their spaces, and remain financially viable. These investments directly support working families by making it possible for parents to participate in the workforce. They also support local economies by stabilizing businesses and creating jobs in the care sector. Without tools like Cal-IP, many child care providers would not be able to access the capital needed to grow or continue serving their communities. At a time when California is working to expand child care access, financing is a key piece of making that goal a reality. We respectfully urge you to renew funding for Cal-IP to support child care providers and working families across the state. Thank you. Good morning. My name is Jaya King, and I am an artist and muralist here in Sacramento. I've experienced firsthand support from the California Art Council's Impact Grant. I created a mural in Sacramento focused on domestic violence awareness in partnership with WEAVE. That project also included a series of trauma-informed creative workshops led by my collaborator, as well as a community paint day at the local farmer's market. As a muralist, I want to emphasize that public art is more powerful than just beautifying a space. This work created access. It created paid artist opportunities, community engagement, increased foot traffic benefiting local business, and awareness to the nonprofit supporting survivors of domestic violence and sex trafficking. Projects through grants like these help sustain a creative ecosystem that is essential to California's identity, public health, and economic well-being. I respectfully request your support to support the $50 million budget request for the California Art Council, including $10 million for Cultural Districts, authored by Senator Lola Smallwood-Cuevas and seven other bipartisan members of the Senate. Thank you. Good afternoon, Chair and members. My name is Colton Dennis, Executive Director of the Merced County Arts Council, a state local partner of the CAC, and part of the coalition of county arts agencies that represents everyone in California. I'm here to urge you to support the $50 million budget request to the California Arts Council, including $10 million for cultural districts, authored by Senator Smallwood Cuevas and seven bipartisan co-authors. This investment is vital in the Central Valley. Downtown Merced is a newly designated cultural district, one of only two in our region, and this will help us become sustainable. The CAC also funds and supports organizations like the Vatanfemem Lao Foundation, whose Lao New Year celebration which is in our downtown cultural district is among the largest in the state showing how arts and culture bring together people of all ages viewpoints and backgrounds from our immigrant community communities to longtime residents this funding sustains our creative economy jobs and small businesses and keeps communities connected across generations and differences I respectfully urge you to fully fund the California Arts Council's 50 million dollar budget request and I invite you all to come to our loud New Year celebration on May 16th in Merced thank you good afternoon madam chair Hurtado and committee members I have a stutter so I will make this as fast as I can my name is Amanda Sanchez and I am here as the co-founding director of capital creative Alliance a local creative nonprofit in support of a senator smallwood Cuevas's request for 50 million in grant making appropriation for the California Arts Council CCA was founded with a grant from the California Arts Council in 2021 and last year was the first year we did not get the general operating support grant our programming did not change nor did we lessen our impact it was just over a subscribed by a lot while the 25,000 a year was not enough to run our org it did allow us to pay our co-directors so we could deliver programming while trying to secure additional funding without this I have reduced my hours and have found full-time work which allows me to be here to speak with you today but there are so many other arts leaders who have had to close their doors and change careers just to make a life increasing the budget for the CAC not only allows our only state arts agency to fund more small and large arts nonprofits it also impacts people like me I respectfully urge you to increase public investment in the arts with this 50 million a budget request thank you good afternoon I'm chair and members of the committee my name is Dominique Johnson I have the honor of serving as the executive director of the Stanislaus Arts Council, a state local partner of the California Arts Council. I also stand here before you today representing the over 550,000 residents in Stanislaus County and as the representative for the Modesto's newly designated arts and cultural district titled Dos Rios Arts and Cultural District. I respectfully urge your support for the $50 million budget request for the California Arts Council, including the $10 million dedicated to cultural districts authored by Senator Smallwood and supported by bipartisan members of the Senate. In communities like ours, rural communities, cultural districts are far more than placemaking initiatives. We've seen that they are catalysts for economic growth, tourism, small business development, and workforce opportunity. They activate corridors, increase community investment, and create sustainable opportunities for artists, nonprofits, entrepreneurs, and working families. But the return on this investment extends beyond economics alone, And we witnessing firsthand how arts and culture strengthen belonging improve community well cultivate civic pride and create spaces where people feel seen connected and inspired The arts generate not only revenue but they create imagination ingenuity and human connection assets that are essential to thriving communities and California future This investment that we're requesting from you for the California Arts Council and our cultural districts is an investment in California's people, our identity, economy, and collective future. thank you so much for your consideration good afternoon chair and subcommittee members my name is Jenna Arbex and I'm a program manager with Nevada County Arts Council we also administer two cultural districts Truckee and Nevada City cultural district we also have partnered with 19 county arts agencies in Northern California to redistribute funding into our rural region more more recently from the CAC I'm here in support of the 50 million budget request for California Arts Council including 10 million for California Cultural District in our rural region cultural district funding has given us the opportunity for meaningful cross-sector collaboration including efforts with our local tribes, chambers of commerce, tourism partners, and local government. The cultural district program has provided us a critical strategy for directing investment into rural communities like ours. However, sustained funding is essential to expanding the reach and impact of cultural districts across the state, particularly in underserved rural regions. Thank you. Good afternoon. My name is Sean Fenton. I'm the Executive Director of Theatre Bay Area and also serve as President of the Board of California Arts Advocates. I'm also here today as an arts worker myself. I'm a working performer and singer, a member of Actors' Equity Association and SAG-AFTRA, and a proud member of the San Francisco Gay Men's Chorus. So the arts are not abstract to me. They are my profession, they are my community, they're my life. So I'm here in the strongest possible support of increasing the CAC Local Assistance Grant funding to 50 million dollars in the agency's 50th year the California Arts Council truly is the backbone of arts infrastructure in California and these grants they reach communities that often do not have access to other sources of funding especially rural communities small budget companies cultural organizations and BIPOC led organizations so when the Arts Council is underfunded these are the communities that feel it first the theater Bay Area community has benefited from CAC support in many previous years and I've seen firsthand what that investment can make possible. CAC funding has supported our workforce development programs, professional training, and programs that serve wide-ranging parts of the arts ecosystem. But right now, in the arts and culture sectors, need far exceeds available funding. So while this $50 million ask aligns elegantly with the Arts Council's 50th anniversary, this is not just a symbolic number. This ask reflects the real need we're seeing across California and begins to move us closer to national norms in per capita arts funding. So in this, the California Arts Council's 50th year, we urge you to increase local assistance grant funding to $50 million. Thank you so much for your support. Hi, my name is Stephen De Silva. I am also a staff member of Aspire House in San Mateo County. We run an evidence-based program for mental health recovery. I want to start by thanking Nalia for comments earlier and I'm here to second them if San Mateo County doesn't receive the VLF funding in full program programs like ours are at risk we provide vital services for our county's most vulnerable residents for our members Serious mental illness is a daily reality, and this funding is the difference between recovery and crisis, hospitalization, incarceration, or end of life. This funding was promised to our county, and us and our members are counting on you to make it right. Thank you. Good afternoon, Madam Chair and members. Brian Augusta, on behalf of the Rural Community Assistance Corporation and Self-Help Enterprises, As you heard a moment ago from the advocates from Cal CCI and from Office of Cat Taylor about the importance of renewing the funding for the Cal IIP program. We're here to also support that request. Our two organizations, RCAC and Self-Help, help to deliver safe drinking water throughout California, including in areas like the Chair's District. And we see CDFIs as critical to that work and Cal IIP as an essential funding source to continue delivering safe drinking water to disadvantaged communities. So for all those reasons, we would urge support for the $50 million addition to the Cal IIP program to continue that important work. Thank you, Madam Chair. Thank you, Madam Chair and members. Keith Dunn here on behalf of the State Building Construction Trades Council in support of the committee's position of leaving the VLF issue open for San Mateo County. Thank you for your time. Thank you. And when you come up to the mic, please speak up. And we're going to we have about 50 people waiting outside waiting to comment. So I'm going to ask if we can limit our comments to less than one minute. Thank you. Good afternoon, Chair and members. Sarah Brennan with the Weideman Group, testifying on behalf of the California Democracy Partnership, including SEIU State Council, the Institute for Responsive Government, the League of Women Voters, ACLU, CalAction, Asian Law Caucus, Common Cause, and Catalyst California. We're urging both houses and the governor to jointly include one-time election protection investments in the final budget to ensure election integrity and a timely vote tabulation. We believe this investment should be focused on voter education, trust and messenger outreach, ballot curing, including immediate funding for the Office of Community Partnerships and Strategic Communications Operational, competitive grants to counties for ballot processing equipment and workforce to expedite the count, vote centers and drop boxes to protect access, cybersecurity, AG election monitors, and election litigation fund. California cannot afford delayed results or interference in a cycle where the balance of power in this country may be at stake. The window to act is now. Thank you. Thank you. If you're here for a Me Too, we're encouraging that. Thank you. Christine Bowles, I'm the mayor of the city of Pacifica, and I'm here to speak in support of the VLF funding. Our city is facing a critical deficit that we can't afford as it is, and with the $2.4 million in addition that we would lose from the VLF would put us at a 10% loss. We're at the forefront of sea level rise, ground zero. We've already lost three apartment buildings, 15 homes. We have so many infrastructure needs. For a city of 38,000, we only have two police officers on duty at night. We cannot afford any more cuts. We would not survive as a city. So please care for us so we can care for our people. Thank you. Thank you. Hello. My name is Diane Howard, and I am a council member and past mayor for the city of Redwood City, and I here to ask for your help Redwood City is about to lose million in VLF funding AND THAT THE funding and that the service equivalent of 19 firefighters with the entire budget of our downtown library Not receiving our funding is a problem even though San Mateo County residents contribute billions to state revenues annually and this is due to an obsolete funding mechanism. Please restore our VLF funding. Find a legislative fix to ensure this never happens to us again. Thank you for your time and thank you for your service. Thank you. And if you're here to do a meet-to-be, we're encouraging that. We have about 50 people outside. Thank you so much. Hello. Thank you, chair and subcommittee members. I'm here in support of VLA funding. My name is Mariah Urobelo. I'm the senior director at Daly City Partnership, a multi-generational nonprofit serving over 16,000 unduplicated individuals with over half a million service points annually across Daly City and Northern San Mateo County. We provide services like food assistance, emergency rental assistance, and homeless services, youth programming, mental health services, and older adult programs. The VLF shortfall threatens critical county safety net funding at a time when the community need is already rising and has been for many years. For Daly City and North County residents, this means increased pressure on food assistance, mental health crisis counseling, older adult support, library services, and basic emergency services that families rely on to remain stable. Northern San Mateo County already experiences significant disparities in resources and investment, and further reductions will disproportionately impact low-income families, immigrants, seniors, and working households struggling with the region's high cost of living. We urge the state to fully restore these funds and establish a permanent solution moving forward. Thank you for your time. Thank you. And if you're here in support of VLF, we're encouraging you to state your name, organization, and a Me Too. Thank you. My name is Taylor Barkey. I'm the director of school and community programs at the Child Mind Institute. Me too. Hi, I'm Jeff Schmidt. I'm a city council member in Menlo Park. I'm in support. Just two really quick data points. This represents 9% of our general fund, huge impacts. We also have been supporting 40 nonprofits for the last 30 years across child services, domestic abuse, and all that, and we have to cut that program. So it has an impact in our city and also multiple nonprofits that our city support. So please help us out. Thanks. Thank you. Thank you, everybody. Good afternoon. My name is Manuel Rodriguez. I am from the YMCA of Greater San Francisco. I'm here representing the South San Francisco Community Resource Center, part of the core agencies in San Mateo County, in support of VLF funding. Me, too. Thank you very much. Thank you. Hello. My name is Kenya Malvoo. I'm from San Mateo County in-home support services, and I am here in support of VLF. Me too. Thank you. Good afternoon. My name is Joseph. I'm with the San Mateo County Assessor's Office. I'm a resident of the city of San Mateo, and I'm a father to children in the San Mateo Foster City School District. I'm here to urge the importance of the VLF funding. It's in our budget. We're accounting for it. We're really looking forward to receiving the funds and me too. Thank you. Hello. My name is Keith Bradford. I work for San Mateo County Sheriff's Office. I'm here with 521 in support of VLF. At the end of the day, it's taken money out of our pockets. It's taken money out of pockets of services we need. I see all the things it's affecting in my county I work in. I afraid to even look at how not getting the VLF will affect the county I live in Alameda County Thank you Good afternoon My name is Maggie Trin I the board president for the San Mateo Foster City School District which is the largest school district in the county Some of our students are homeless and foster care youth and a lot of our families rely on county services and having to cut those services would really affect the way that they show up in school every day. So I really urge you to support the return of VLF funding. Thank you so much. Thank you. And if you're here in support of the VLF. Sorry, I haven't had any breakfast yet. If you're in support of the VLF, we're just going to ask that you state your name, organization, and of course, me too as well. Good afternoon. I'm Corinne Temple Perry with Peninsula Family Service and I want to let you know that the people we serve don't have a backup plan and so there's many older adults that we serve that have cancer that rely on our services to get to chemotherapy appointments to doctor's appointments to get groceries to get food. Losing VLF funding means cutting these lifelines for people in this county. More than a million dollars of services from our organization alone. So the state made a promise. Please honor it. Fund San Mateo County fully and make the permanent fix. Thank you. Thank you. Good afternoon. My name is Latonya Mitchell and I'm the education and staffing coordinator for NAMI San Mateo County and I'm in support of the VLF funding thank you thank you good morning I'm Diego Ocho I'm superintendent of the San Mateo Foster City School District I want to just thank you for your service I know what it's like to sit on a deus and I just really appreciate the three of you I want to ask for your support with this VLF funding our children need it and our community needs it and I wish well. Thank you so much. Good afternoon, thank you for your time. I'm Assistant Sheriff Mark Myers from the San Mateo County Sheriff's Office. I'm here with a singular purpose to join public servants and first responders in asking the state to honor its commitment to fully fund the vehicle licensing backfill. Without these dollars, public safety is at risk. This funding has real consequences. It means three fewer deputies watching over our communities. In one of our contract cities, it means five hours every day no one will be on patrol. This This equates to slower response times when someone calls 911 and fewer deputies solving crimes. This is not new funding. It's funding already old. Public safety and community trust depend on it. Thank you for your time. Thank you. And I really appreciate everybody that made the time to come out and comment. I want to make sure that everybody has an opportunity to comment here today. So we're going to ask that we meet, too, if you're here in support of the VLF. Hello, everyone. My name is Carlos Tappi and I'm president of the San Mateo County Deputy Sheriff's Association. I represent over 500 sworn and non sworn personnel. I'm here in support of the VLF funding. Thank you for your time. Thank you so much. Hello, my name is Jackson Shales. I'm a local 2400 union rep and I'm in support of the VLF funding. Thank you so much. Thank you. Good afternoon chair senators. My name is Paul Pack. I'm a lieutenant with the City of San Mateo Police Department I'm also here to support the of BLF funding to support essential services. Thank you so much for your time. Thank you Thank you for your time Greg Wright Vice Mayor Pacifica there are real consequences to Pacifica fire and police personnel increasing response times food assistance programs coastal resilience Thank you. I support the VLF funding. Thank you. Hi, I'm Howard Brown. I'm a fire captain, paramedic with North County Fire Pacifica. in support of the VLF just wanted to point out that the loss of the VLF funding for smaller cities has a drastic impact on our ability to provide services thank you hi committee Sergio Lopez councilmember in neighboring Santa Clara County chair of a transit agency and president of the League of Cities Peninsula division here in support of the VLF funding which is also an issue of regional fairness thank you thank you good afternoon senators my name is Ken Chan I'm the organizing manager with the housing leadership council San Mateo County we work with committees and their leaders to produce and preserve quality affordable homes which is exactly why we are in support of the restatement the in-lieu fees for the vehicle in loopies thank you thank you hello committee my name is Justin Manolo councilmember and former mayor for the city of Daly City in support we are the second largest city in San Mateo County and we would lose over 6.5 million dollars and firefighter engine and youth services recreation and in support thank you thank you good afternoon my name is Julie lends with the San Mateo Labor Council representing 105 unions and over 95,000 workers and their families across San Mateo County I'm I'm also a statewide vice president of the 2.3 million member California Federation of Labor Unions. You've heard a lot about the cuts that our county is facing if our funding is not restored and a permanent fix established. But I wanted to make sure to highlight that these potential cuts don't just get the community. They get the workforce. This hits us on both sides of the coin, and we are set to become casualties of a crisis we did not create. And the only ones that can stop that are you. So please help us. Thank you. Thank you. Good afternoon, committee. My name is Stephen Booker. I'm a business rep for the International Brotherhood of Electrical Workers in San Mattel County, representing 2,000 electrical workers, sound and communication technicians, and air train mechanics out of San Francisco Airport. I'm also a resident of Half Moon Bay. San Mattel County cannot afford not to have this VLF restored. We cannot afford to lose those community service. So I urge you guys to fix this with a permanent solution so we don't have to go through this again. Thank you for your time. Thank you so much. Good afternoon. My name is Matthew Chittister. I'm the city manager of the city of Half Moon Bay, and I'm in favor of restoration of the funding and a permanent fix. Half Moon Bay is a community with a lot of wealth disparity. We have many vulnerable residents, farm workers, service workers, and laborers, and they, especially right now, are struggling with the economy. And they depend on safety net services that are provided by the city, the county, and our nonprofits, and this funding is crucial for that. So we hope you'll support it. Thank you. Thank you. my name is Felipe Donner I'm president of ask me locally 29 and we represent over 4,000 employees throughout San Mateo County and many of the cities in San Mateo County our public employers provide many essential services to the residents of San Mateo County losing BLF will cause a hardship for many of our residents of San Mateo County. Please provide the full funding for VLF and I thank you. Thank you. I recognize Many of you drove very far away to get here and comment, but we want to provide an opportunity to everybody. So if you're here in support of VLF, please state your name, organization, and me too if you can. Thank you. Good afternoon. My name is Taliza Newkirk, and I represent San Mateo County Chapter Vice President of ASME, representing, again, over 4,000 employees and public sector employees. and we encourage you to release the full $157 million VLF shortfall. Our residents' lives are not discretionary, and we need the legislator and the governor to honor their commitment voted on by the people. Thank you. Good afternoon. My name is Kyla Valenti. I'm the treasurer of AFSCME Local 829 and a benefits analyst for the county of San Mateo, and I'm in support. Thank you. Good afternoon, Madam Chair. Al Austin with AFSCME Council 57. We are in full support of restoring the BLF funding for San Mateo County, and we ask you also to build in a permanent solution so that we don't have to do this every year. Thank you. hello my name is Yesenia Sanchez and I am a patient services assistant at the San Mateo Medical Center part of San Mateo County and I too am in support for you for the state to release the funds withholding these funds affect more than budget it affects real people patients who rely on our county being able to provide health behavioral health and social services that are very much needed thank you for your time hello my name is Cassandra Vivanco Guerrero and I'm a program coordinator at Nesta Casa de East Palo Alto and I'm too I'm in support and push for the release of the VLF funds and a permanent fix I work directly with underserved communities on a daily basis and helping them apply to and navigate the already limited resources that are available to them this shortfall will negatively and directly impact the vulnerable community members who rely on the stability that county and city funded programs provide for them thank you hi my name is Abby Visser I'm the finance director working for the city of San Mateo I'm in support of Vila funding because that's a major provider of our essential services thanks my name is Stacy Jimenez I'm a councilmember in Foster City I'm also the vice chair of the city and County Association of Governments. Foster City is owed and millions more in future years I know you guys are hungry I know you ready for lunch But please remember that hundreds of thousands of people could go hungry if we don have money for jobs, essential services, and the support that we need. So please consider that and fund the missing backfill and come up with a solution for the future. Thank you. Thank you. Hello, Madam Chair. Yvonne Fernandez on behalf of the California Labor Federation and also on behalf of the professional firefighters California in support of item budget item number one regarding the BLF this money is integral for good union jobs and services thank you thank you good afternoon madam chair Christopher essential domestic weather group here on behalf of the inclusive action for the city requesting our echoing all the comments of my colleagues on Calip and the 50 million dollar proposal thank you madam chair good afternoon Jim Lawrence board chair of fiction Sam material County we have for the seniors the ones who travel more than an hour to work in Sam material County and the low-income residents there please restore the VFL funds for them thank you thank you I'm kind of nervous but my name is Camille Thomas and I'm from this firehouse in Sam until and I support VOLF thank you have a great day guys hello thank you for taking this time my name is Lisa let's see and I'm the executive director of aspire house it's a I'm hoping you've heard many of our members that have spoken on behalf we are a clubhouse model of mental health recovery and these funds are crucial for us continuing to help members stay out of hospitals and to lead productive lives they require and rely on these services that could be cut continuously each year if these funds are not returned to us additionally would like a permanent fix for this so we don't have to come every year and ask for the same thing over and over again. Thank you. Thank you. My name is Joel, and I am a member of a firehouse, AND EVIDENCE-BASED CLUBHOUSE PROGRAM DEMONSTRATED OUTCOMES IN EMPLOYMENT, HOUSING STABILITY, AND REDUCED HOSPITALIZATIONS. IF SAN MATEO COUNTY DOES NOT RECEIVE ITS FVLF FUNDING IN FULL PROGRAMS LIKE OURS ARE AT RISK does not receive its FBLF funding in full Programs like ours are at risk We provide community and vital services for people who have nowhere else to turn For our members, this funding is the difference between recovery and hospitalization or worse. This funding was promised to our county. Our members are counting on you to make it right. And without the Aspire House, I never would have been able to recover as well as I have. And in such a short time, it's amazing. Thank you. Thank you, sir. Hello, Brooke Benetti with Kaiser Advocacy on behalf of CAMEO Network and the California Community Land Chest Network. Both the network and CAMEO strongly support the $50 million budget ask for the California Investment Innovation Program. We urge you to renew funding for this program. Thank you. Thank you. Good afternoon. Kiera Ross on behalf of the City of Glendale, supporting the redaction of subsections G&L well as for the a b1 night a b91 implementation to go forward as as an existing law also on behalf of the town of Hillsboro and the city of Belmont in support of the BLF funding thank you so much thank you good afternoon my name is Georgia Farouk I'm CEO of thrive the alliance of nonprofits for all of San Mateo County we ask the state to swiftly restore the BLF funds owed to our county nonprofits are already stretched thin we in our survey saw that 78% of nonprofits already have expanded demand for programs and services and the majority cannot expand to keep pace and we really rely on this these funds for our sector thank you thank you good afternoon my name is your matzov and I'm here representing thrive Alliance the Alliance of nonprofits in San Mateo County and I also serve in civic boards and I'm here to urge urge your support to restore BLF funding thank you thank you hi Karen Molinari City of San Carlos economic development commissioner former ledge staffer when all of this BLF stuff started many years ago I serve on many nonprofit boards I would like you to make the county whole and chair hostata I really appreciated your quote in your newsletter that specifically said the resources managed by the state do not belong to the government they belong to the working families the small businesses the communities who pay into the system and expect it to function responsibly I really ask for your support in this effort thank you good afternoon I'm Katie McDonald from hip housing and affordable housing provider in San Mateo County and we are at ground zero when it comes to trying to help struggling households and people in need these cuts would result from losing VLF funds put San Mateo County and every social services agency at risk and income disparity is already growing faster in our region than anywhere else stripping these funds do would hurt all of our service workers our students our seniors or families so please restore that out VLF funding our county's residents and the care that we provide to them depends on it. Thank you My name is Guillaume Desai I am VP of Finance for HIP Housing. It's an affordable housing affordable housing and supportive services provider in San Mateo County. If the county loses this funding and 3,000 people lose access to shelter while another 5,500 lose rental assistance organizations like hip housing become the safety net these people turn to we are already operating at capacity and struggling to meet the current needs of the community a surge in demand of this magnitude would place tremendous strain on our programs and resources we ask the state we urge the state to restore via and left funding to San Mateo County. Thank you. Thank you. Okay. It looks like there is no additional individuals wishing to comment. We really, again, I want to thank all those that drove from far away, took time out of their busy schedule to come and comment. I really appreciate you making that extra effort to come in and provide your comment on a particular issue. Given that public comment is now complete, I will wrap up this hearing. So Subcommittee 4 is now adjourned. Thank you.