Budget and Policy Updates: Upcoming Deadlines, Creative Economy, and One Big Beautiful Bill
Sacramento
Two Major Deadlines Approach in the Legislature
Things are heating up in Sacramento—literally and figuratively—as the Legislature approaches two major deadlines in the 2025 legislative session.
The first major deadline, June 6, is the last day for the Assembly and Senate to pass bills introduced in their respective chambers. Last week, the Appropriations Committees in each house cut the number of bills to be considered by one-third, stating that, in general, bills creating new costs for the state could not move forward this year.
While costs are an important consideration, the Appropriations Committee is also where controversial bills often go to die—by being placed in the “Suspense File.”
The second major deadline, and the most important, is June 15—the deadline by which the Legislature must pass and send a budget to the Governor.
The next 2.5 weeks will be intense, with every interest group vying to protect funding and programs that benefit their constituencies. With a projected $12 billion deficit this year, that will be difficult.
Both the Governor and legislative leadership have warned that cuts are coming—how deep, however, remains to be seen.
My guess is that the main negotiation point between the Governor and Legislature will be how much to save in the rainy-day fund this year to stave off greater cuts next year.
The law requires a zero-dollar ($0) deposit in the state’s rainy-day fund during a budget deficit year. The Governor proposes a $4 billion deposit this year, along with mostly cuts to Medi-Cal to balance the budget. I would be surprised if the Legislature did not push back and ask for a smaller deposit to the rainy-day fund to reduce the impact of cuts on Medi-Cal recipients.
Creative Economy Workgroup to Issue Comprehensive Report in June
A long-anticipated report from the California Arts Council’s Creative Economy Workgroup is set to be released in June. In 2021, the Legislature tasked the Arts Council with developing a comprehensive look at the current state of the creative economy and identifying where to invest in its growth.
Key components of the report will address affordable housing, apprenticeship programs, broadband connectivity, grants in rural areas, the impacts of artificial intelligence, workforce development and training, and more.
Legislative Calendar
June 6: Last day for Senate and Assembly to pass bills introduced in their chambers
June 15: Budget bill must be passed by midnight
June 30: Governor must sign the budget by midnight
July 4: Independence Day – Legislature is not in session
July 18 – August 17: Summer recess
September 12 – January 5, 2026: Interim recess of the 2025–2026 session of the California State Legislature
October 15: Last day for the Governor to sign or veto bills passed before September 12
Washington, D.C.
The President’s ‘Big, Beautiful Bill’ Heads to the Senate
Last week, the House narrowly passed (by one vote) H.R. 1 – the One Big Beautiful Bill Act. The bill, which includes no tax on Social Security, ends taxes on overtime and tips, extends tax cuts, adds additional requirements to receive federal benefits, and increases the debt ceiling, is now in the Senate.
The major sticking point is how much the Senate is willing to add to the nation’s debt. Contrary to statements made by the White House, the bill would add an estimated $2 to $4 trillion to the deficit, and many GOP hardliners have publicly expressed concern.
House Speaker Mike Johnson, however, is urging the Senate to pass the bill “as-is,” because any amendments made by the Senate would need to be confirmed by the House. With one vote to spare, there’s not a lot of wiggle room.
Harvard Grants to Support Trade Schools?
In his ongoing conflict with Harvard, the President announced on Memorial Day that he is considering reallocating $3 billion in grant funding from Harvard to trade schools.
In April, the President issued an executive order directing the Secretaries of Labor, Education, and Commerce to review all federal workforce programs to modernize, integrate, and realign them to address critical workforce needs in emerging industries.
The EO focuses on registered apprenticeships, specifically referencing construction and durable goods workforce development.
