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File #: 22-102    Version: 1 Name:
Type: Memo Status: Passed
File created: 1/18/2022 Departments: COUNTY MANAGER
On agenda: 2/8/2022 Final action: 2/8/2022
Title: Accept this informational analysis of the Governor's FY 2022-23 State Budget Proposal
Attachments: 1. A_FY 2022-23 State Budget Table _update January 31 2022.pdf
Special Notice / Hearing: None__
Vote Required: Majority

To: Honorable Board of Supervisors
From: Michael P. Callagy, County Manager
Connie Juarez-Diroll, Legislative Officer

Subject: Analysis of the Governor's FY 2022-23 State Budget Proposal

RECOMMENDATION:
title
Accept this informational analysis of the Governor's FY 2022-23 State Budget Proposal

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BACKGROUND:
On January 10, 2022 Governor Newsom released his initial budget proposal for the 2022-23 fiscal year, a $286.4 billion ($213.1 billion General Fund (GF)) spending plan reflecting a 9.1 percent total budget increase over last year and 1.5 percent GF increase over last year.

The Governor's Budget projects a $45.7 billion surplus; however, after accounting for constitutionally required funding for K-14 schools ($16.1 billion) and Proposition 2 deposits and supplemental state pension payments ($9 billion) obligations, the discretionary surplus is $20.6 billion. The Administration states that this is lower than the $31 billion surplus estimated by the Legislative Analyst's Office (LAO) in its November Fiscal Outlook largely due to different revenue assumptions.

The Governor's Budget includes $34.6 billion in budget reserves allocated as follows:
* $20.9 billion in the Proposition 2 Budget Stabilization Account (Rainy Day Fund), bringing the account to its constitutional maximum and requiring $2.4 billion to be dedicated to infrastructure investments;
* $9.7 billion in the Public Schools System Stabilization Account;
* $900 million in the Safety Net Reserve; and
* $3.1 billion in the state's operating reserve.

The proposed budget currently estimates that available GF revenues will exceed the State Appropriations Limit (also called the Gann Limit) by $2.6 billion. The Gann Limit is a constitutional spending limit imposed on state and local governments. Revenues available above that limit are required to be spent on schools, refunded to taxpayers, and/or spent on items ex...

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