Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Michael Callagy, County Executive
Connie Juarez-Diroll, Chief Legislative Officer
Subject: 2024 State and Federal Legislative Update #6-Update on the State Budget for Fiscal Year (FY) 2024-25 and 2024 State and Federal Legislative Sessions
RECOMMENDATION:
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Recommendation to:
A) Accept this update on the FY 2024-25 State Budget, and
B) Accept an informational report on the 2024 State and Federal Legislative sessions.
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BACKGROUND:
On June 13, 2024, the Legislature passed AB 107, the Budget Act of 2024, its version of the state budget. Earlier in the week both houses also approved SB 154 and SB 167, budget bills suspending minimum education funding guarantees and taxes to support AB 107 spending. AB 107 represents a high-level, consolidated negotiated agreement for the Legislature as leaders continue to meet with the administration to iron out other sticking points (i.e., a $25 per-hour health care worker minimum wage and MCO tax proceeds) before the June 27, 2024, deadline for the Governor to sign the state budget bill. Budget negotiations are continuing, with budget trailer bills to follow ahead of the beginning of the state's new fiscal year (Monday, July 1) and the Legislature's adjournment for the summer recess (Wednesday, July 3).
AB 107 relies on the following strategies to close a shortfall of approximately $45 billion in FY 24-25:
* $5.3 billion in fiscal reserves,
* $16.6 billion in one-time and ongoing reductions,
* $14.4 billion in program pauses and shifts, and
* $5.3 billion in new revenues and borrowing.
The joint legislative budget includes a three-year suspension of corporate net operating loss deductions and various business tax credits in 2024, one year earlier than the Governor proposed. These higher revenues and larger reductions in programmatic spending (most notably for state prisons) allow for addition...
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