About the Governor’s May Budget Revise

In less than two weeks, Governor Gavin Newsom will issue his “May Revision.” The Governor’s Department of Finance explains that the May Revision reflects “changes to the Governor’s Proposed Budget based upon the latest economic forecasts.” The Office of Legislative Counsel, in its Glossary of terms, explains the May Revise as “occurring in early May, [it is] the updated estimate of revenues and expenditures that replaces the estimates contained in the Governor’s budget submitted in January.”

Where is the requirement for the Governor to issue the May Revision found in state law? Of course, we would first turn to the California Constitution. Interestingly, there are no provisions related to the state budget in Article V of the state Constitution, which deals with the executive branch of state government and sets forth the powers and duties of the Governor of California.

Instead, the budget-related provisions are actually found in Article IV of the state Constitution, which sets forth the powers and duties of the legislative branch of government. And, there are actually only two constitutional requirements related to the state budget: That the Governor introduce a budget by January 10, and that the Legislature pass the budget bill by June 15.

Article IV, Section 12(a) provides: “Within the first 10 days of each calendar year, the Governor shall submit to the Legislature, with an explanatory message, a budget for the ensuing fiscal year containing itemized statements for recommended state expenditures and estimated state revenues.” In addition, Section 12(c)(3) provides: “The Legislature shall pass the budget bill by midnight on June 15 of each year.”

So, there are actually no constitutional or statutory provisions requiring the Governor to issue a May Revision to the state budget. By the way, what is the correct terminology to use? We hear about the “May Revision,” “May Revise,” or “May Budget Revision.” Which one is it? Well, at least five sections of the California Government Code use the term “May Revision.” Not surprisingly, however, at least one Government Code section specifies the term “May budget revision.” So, the best answer to this side question is to use the term “May Revision.”

Back to the original question, the answer is there is neither a constitutional nor statutory requirement for the Governor to issue a May Revision to the January budget proposal. However, there is a requirement on the Director of Finance. I know, it was sort of a trick question.

In Government Code Title 2 (Government of the State of California), Division 3 (Executive Department), Part 3 (Department of Finance), Chapter 3 (Fiscal Affairs), Article 1 (General), is Section 13308. This section of the Government Code related to the Governor’s Budget and imposes requirements upon the Director of Finance.

For example, in subdivision (a)(1), at the time the Governor submits the January budget proposal, “the Director of Finance shall submit to the Legislature total recommended state General Fund expenditures and estimated, including any proposed, state General Fund revenues….”

In subdivision (b), the Director of Finance is required to “provide to the Legislature, on or before February 1 of each year, all proposed statutory changes, as prepared by the Legislative Counsel, that are necessary to implement the Governor’s Budget…” This is why the Department of Finance provides of its proposed “trailer bill” language on the DOF website by the end of January.

In subdivision (d), the Director of Finance is required to “provide to the Legislature, on or before May 1 of each year, all proposed adjustments to the Governor’s Budget in appropriations for capital outlay.” This requirement is not the May Revision; instead, it relates to capital outlay proposals.

In subdivision (e), the Director of Finance is required to “provide to the Legislature, on or before May 14 of each year, all of the following:

(1) An estimate of General Fund revenues for the current fiscal year and for the ensuing fiscal year.

(2) Any proposals to reduce expenditures to reflect updated revenue estimates.

(3) All proposed adjustments to the Governor’s Budget that are necessary to reflect updated estimates of state funding required pursuant to Section 8 of Article XVI of the California Constitution, or to reflect caseload enrollment or population changes.”

So, this is where the May Revision is found in state law. The requirement is contained in Government Code Section 13308(e), and it is not a requirement upon the Governor directly, but actually upon the Director of the Department of Finance.