This May Revise did not change the winding down of redevelopment agencies, and retained the allocation of an additional $733 million for cities in general purpose revenues over the 2016 - 2018 years. Cities are still forecasted to receive a portion of the $900 million in additional, ongoing property tax revenues, providing local governments the flexibility to fund key public services.
The Revise still allocates 2020 Census data collection grants ranging from $7,500 - $125,000 to cities and counties. Grant allocation will be based on housing transactions within a cities' jurisdiction over the 2010 - 2016 years, to receive this allocation each city must register with the Census Bureau and provide necessary materials and data.
Also affecting local governments is the passage of Prop 64, the legalization of recreational marijuana. In January's budget proposal, the Governor proposed the implementation of one regulatory structure for cannabis activities addressing both medical and recreational marijuana use, funded by a $52.2 million budget allocation. The May revise provides for an additional $43.2 million allocation, totaling to a $94.6 million State investment in cannabis regulation. Even though this appropriation doesn't go directly to local governments, this structured regulatory plan will affect the oversight framework for city implementation, as well. Due to this increase, the funding for the government agencies and departments overseeing cannabis regulations has slightly changed. To view the outlined dollar distributions towards each agency, click
The May Revise addresses local public safety by increasing the flexibility on how cities use 2016's $25 million Community Based Transitional Housing program funds. The program allows cities and counties to apply for funds that would be allocated to for-profit and non-profit businesses providing transitional housing and services to offenders released from the criminal justice system. Additionally, due to Prop 57 post release schedules, there has been an increase of $4.4 million dollars for county probation departments to manage the surge in those leaving the criminal justice system, totaling a $15.4 million State investment.
The 2017 January proposal touched briefly on the Sustainable Groundwater Management Act of 2014 (SGMA). The May Revise maintains the ability for the State to act if a local agency was not properly protecting their groundwater basins, which could negatively impede on local control and regional actions.
The Governor has continued to leave the challenge of addressing affordable housing in the hands of the Legislature by providing outlined principles that he has proposed through the budget, including: streamline housing construction, lower per-unit costs, production incentives, accountability and enforcement, no impact to the general fund, and specified source funding. There have been several bills introduced related to affordable housing, but none have been identified as the vehicle to accomplish the needs of addressing the affordable housing shortfall being faced by our State, nor have any proposals completely aligned with the Governor's budget proposal parameters.
There is still the potential for a legislative proposal to be introduced through a gut-and-amend process, or a budget trailer bill. The likelihood of this is uncertain, as the legislature has accomplished one of the two major policy priorities remaining from the last legislative session by passing the long-awaited transportation bill package. Addressing affordable housing may have to wait until next year - in year two of this two-year legislative session. The issues related to homelessness and housing affordability remain as key policy issues for the Association. It's important that a potential housing solution balance the needs of meeting housing demands without diminishing local control. You can read ACC-OC's suggestions to the Governor on his Streamlining Affordable Housing Approvals proposal from 2016,
As previously mentioned, SB 1 by Senator Beall, has been signed into law. The Road Repair and Transportation Investment Package creates a $52.4 billion 10-year investment partially dedicated to fixing local streets and transportation infrastructure, including $2 billion to support local "self-help" communities, like the County of Orange.
The revenue sources will come from new taxes and fees associated with vehicle and fuel use, including; $7.3 billion by increasing diesel excise tax by 20 cents, $3.5 billion by increasing diesel sales tax,
$24.4 billion through
a 12-cent increase in gasoline tax, a Zero Emission Vehicle Fee, and General Fund loan repayments. In addition to identifying funding and revenue sources, the Road Repair and Transportation Investment Package includes transportation reforms ranging from enhanced Caltrans oversights and efficiencies, to empowering the California Transportation Commission (CTC). In the County region, according to the Orange County Transportation Authority, SB 1 has the potential to double transit and local streets and roads funding, create revenue for commuter rail, provide new grant programs, and create funds for active transportation.
ACC-OC will work closely with our local transportation partners to support solutions that work best for the continued investment within our cities' and County's transportation infrastructure. To view annual SB 1 allocations to Orange County cities, click
. Read the Road Repair and Transportation Investment Package Bill,
Overall, the Governor's 2017 May Revise is adjusted to reflect a $124 billion general fund budget, and maintains a $1.5 billion increase to the rainy-day fund. Also, even though revenues are higher than originally reported, the State is still grappling with a $3.3 billion revenue shortfall. The legislature will have until June 15th to review the May Revise and negotiate a final budget. As budget decisions progress the ACC-OC will make regular updates, and analyze the effects of the Legislature's actions on local government. Should you have any questions please contact Legislative Affairs Director, Diana Coronado at
or at (714) 953-1300.
to view the Governor's 2017-2018 May Revise
to view the Governor's 2017-2018 January Budget Summary
to view Governor's press release