We are pleased to provide our March 2022 California Policy Update. This issue includes updates on Governor Newsom’s State of the State Address, the Taxpayer Protection and Government Accountability Act (currently being circulated for signatures for potential inclusion on the November 2022 Statewide ballot), and legislation by topic area that is currently going through the legislative process.
Governor Gavin Newsom submitted his 2022-23 State Budget proposal to the Legislature on January 10, 2022 – a $286 billion spending plan that estimates a $45.7 billion surplus, of which $20.6 billion is discretionary, $16.1 billion is mandated by Proposition 98 for K-14 education, and $9 billion is set aside for reserve and supplemental pension payments. The State Appropriations Limit (Gann Limit) is likely to be exceeded in both 2020-21 and 202122 by a total of $2.6 billion, which will require additional funding to be directed to schools and taxpayer rebates. The administration will update the State Appropriations Limit numbers as part of the May Revision.
We are anticipating another busy legislative and budget year in 2022, with the Legislature reconvening to begin their work for 2022 on January 3rd. As the second year in a two-year session, legislation introduced in 2021 that has not yet moved to the second house must move forward in January or will die, with exceptions for measures requiring a ⅔ vote. This means that in January there will be a rush of policy and fiscal committee hearings in addition to the release of the governor’s 2022-23 budget proposal on or by January 10.
On September 10, 2021 at 9:00PM, the Senate and Assembly adjourned session for the year and are not scheduled to return to the Capitol until January 3, 2022. This end of session was far less exciting than in prior years, partially because of the 72-hour in print rule, and partially because some issues were punted to next year, including highspeed rail.
In recent weeks, the state legislature has been working actively on their state budget proposals and to meet the statutory deadlines to move bills from their house of origin to the other house by the June 4th deadline. On May 19th, the Speaker Pro Tempore Toni Atkins announced that each legislator would be limited to sending 12 bills to the opposite house. Some bills may be excluded from this requirement if they are being proposed to be implemented immediately. Below is a summary of key legislation moving through the California State Legislature
Avenu in partnership with the UCLA Anderson Forecast collaborates to provide both micro and macro level views of the economic health of California at the state and local levels. The following economic information has been provided by our colleagues at UCLA Anderson Forecast. We’ve also attached our recent sales tax forecast assumptions.
The Administration and Legislature are nearing final agreement on the Budget Act of 2021. The Legislature sent SB 129 to the governor on June 29 amending the Budget Act of 2021 (AB 128). AB 128 contains the Legislature’s Budget which the governor signed; however, the bulk of the final budget agreement is contained in SB 129. This is the first time in ten years that the actual budget agreement was not signed on or by June 30.
SB 156 provides the statutory framework to implement the broadband provisions contained in the 2021 budget package. This bill contains necessary statutory changes to implement the broadband provisions included in the 2021-22 budget package. Funding for this bill is included in SB 129 (Skinner) and AB 164 Ting/SB 164 (Skinner) which amend the 2021 Budget Act AB 128 (Ting, Chapter 21, Statutes of 2021).
Things are starting to pick up steam in Sacramento and we will be reporting regularly as legislation and related actions unfolds. Please feel free to contact me with any questions.
Avenu in partnership with the UCLA Anderson Forecast collaborates to provide both micro and macro level views of the economic health of California at the state and local levels. The following economic information has been provided by our colleagues at UCLA Anderson Forecast.