Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Michael P. Callagy, County Executive
Connie Juarez-Diroll, Chief Legislative Officer
Subject: State and Federal Legislative and Budget Update #5
RECOMMENDATION:
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Accept the August 2025 informational report on the 2025-26 state and federal legislative and budget updates.
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BACKGROUND:
On June 27, the State Legislature passed, and the Governor signed an updated $321.1 billion FY 2025-26 fiscal year state spending plan. The agreement addresses a $12 billion shortfall by relying heavily on state savings, special fund borrowings, and payment delays. It also rejects and modifies many of the Governor's proposed budget solutions and aligns more closely with the Legislature's budget blueprint by prioritizing funding for children and public schools, protecting access to health care for vulnerable populations, and cutting red tape to build more affordable housing much faster. The Governor's approval of the state budget, however, was contingent on the enactment of either AB 131 or SB 131, which facilitates increased housing production for infill sites in urban areas by providing exemptions to California Environmental Quality Act (CEQA) procedures. SB 131 was passed and signed on June 30, therefore making the budget act officially operative at that time. Although the State Legislature delivered a balanced and timely budget under challenging fiscal conditions, the agreement did not account for the impacts and budgetary decisions (H.R. 1) subsequently made by Congress on July 4. The prospects of a special session in the fall are unlikely; the Governor and State Legislature are continuing to engage in budget negotiations and have until the end of the session to make necessary adjustments through budget trailer bills.
Before adjourning for summer recess on July 18, members of the legislature worked diligently to hear and report bills out of thei...
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