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California Deficit Forces Lawmakers to Shelve Bills on Psychedelic Therapy, Reparations

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A Senate appropriations committee hearing at the Capitol Annex Swing Space in Sacramento on May 16, 2024. On Thursday, the Assembly and Senate appropriations committees held their first round of suspense file hearings. (Fred Greaves/CalMatters)

California’s budget crunch is forcing the Legislature to scale back its agenda this session, with bills to legalize psychedelic therapy, offer reparations to the descendants of enslaved people, and require more transparency around who is paying for lawmakers’ sponsored travel among the early carnage.

Facing estimated deficits of tens of billions of dollars over the next two years, leaders of the Legislature’s appropriations committees said on Thursday that they had to make especially difficult decisions as they held or amended hundreds of proposals with a significant cost during the biannual culling process known as the suspense file — though most of the bills in each committee still passed.

“The budget had a huge impact on what we did,” state Sen. Anna Caballero, a Salinas Democrat who leads Senate appropriations, told CalMatters. “We were trying to keep costs down and really trying to live within our means.”

Of the 341 bills on the Senate suspense file, 87 — or about 25.5% — were held, in line with the average over the past decade. But another 121 were amended, even as they advanced to the floor before a crucial deadline next Friday for measures to pass their house of origin.

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“Authors were asked to amend their bills to take out the more expensive stuff,” Caballero said. “We don’t have the money.”

The Assembly’s appropriations committee held 233 of the 668 bills on its suspense file, or about 34.5% — slightly higher than last May when 29% were shelved.

Those included Assembly Bill 2751 by Assemblymember Matt Haney, a San Francisco Democrat, which would have barred employers from contacting workers outside of scheduled hours, and AB 2808 by Assemblymember Buffy Wicks, an Oakland Democrat who chairs the committee, which would have limited companies such as Ticketmaster from being able to resell event tickets exclusively.

“We have an obligation to balance the budget here in California — we can’t go into debt,” Wicks told reporters after the hearing, where she killed another attempt to establish a single-payer health care system in California, a policy she has supported in the past. “We needed to be responsible with taxpayers’ money, so that’s why we had to make some tough calls today.”

Assemblymember Ash Kalra, who authored the single-payer bill, said after two years of negotiations, he was confident it would have passed the Assembly. 

“I am deeply disappointed the Assembly Appropriations Committee failed to recognize the significant cost-saving potential of AB 2200,” he said in a statement. “Study after study has shown that a single-payer system will not only cost less than our current system but can safeguard the State from future deficits while stimulating economic growth.”

Both Caballero and Wicks are newly in charge of their respective committees this year, overseeing their first suspense file hearings as the state works through how to close a massive deficit.

Gov. Gavin Newsom unveiled his proposed spending plan last week to address the looming shortfall, estimated at $56 billion over the next two fiscal years — and more by legislative finance officials — even after he and lawmakers took early action to reduce it.

With more than $30 billion in cuts to education, public health, environmental and other programs on the line, Newsom is likely to have little appetite this year for pricey new legislation. He has already urged discipline over the past two sessions as California’s finances softened, vetoing dozens of bills that he said would add unaccounted costs to the budget.

The suspense file, where all legislation with a major fiscal impact is considered concurrently and dispensed within a rapid-fire hearing, has also long provided the Legislature with an easier way to kill controversial or undesirable bills.

Caballero refused to discuss any of her specific decisions, citing only cost considerations, including shelving Senate Bill 1012, which would have legalized the use of hallucinogenic drugs in therapeutic settings. Newsom vetoed a broader decriminalization of psychedelics last year, and supporters hoped their focus on therapy would provide a path forward.

A Senate appropriations committee hearing on May 16, 2024. On Thursday, the Assembly and Senate appropriations committees held their first round of suspense file hearings. (Fred Greaves/CalMatters)

“Psychedelics have massive promise in helping people heal and get their lives back on track,” Sen. Scott Wiener, a San Francisco Democrat who carried the bill, said in a statement. “I’m highly committed to this issue, and we’ll continue to work on expanding access to psychedelics.”

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The Senate also killed SB 1422, a transparency measure to require more reporting about who is paying for legislators’ sponsored travel.

The bill, from Sen. Ben Allen, a Santa Monica Democrat, followed reporting last year by CalMatters that found a 2015 law requiring the organizers of these legislative trips to disclose their major donors annually had only been used twice, despite interest groups paying for millions of dollars in travel for lawmakers during that time. Allen’s measure aimed to tighten the eligibility criteria for reporting.

His office did not immediately respond to a request for comment.

On the same day that the Assembly passed a bill requiring California to apologize for its role in perpetuating slavery, the Senate appropriations committee held two other measures that would have provided more direct reparations to the descendants of enslaved people: SB 1007, a housing assistance program, and SB 1013, a property tax assistance program.

Both were carried by Sen. Steven Bradford, an Inglewood Democrat and member of the state reparations task force, who has been critical of legislative efforts that he said do not go far enough to address systemic inequities. Several other proposals of his, including SB 1403 to establish a state agency that would carry out the task force’s recommendations, continue to advance.

“In the words of Dr. Martin Luther King, you need to accept finite disappointment but have infinite hope,” Bradford told reporters following the hearing. “We have a good foundation to work from.”

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