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State Budget — Legislature Adopts Its Plan; Negotiations Continue
Earlier this month, the Legislature adopted a $356 billion spending plan that largely sidesteps or defers the social-service cuts Governor Newsom proposed in his May Revision. This current spending plan is a placeholder until a final agreement is reached between the Governor and the Legislature.
Over the next week, during the summer recess and in the final month of the legislative session in August, the outstanding disputes on healthcare, education funding, and homelessness will need to be resolved before the Legislature adjourns for the year on August 31.
Context for CDA members
For downtowns, the most consequential move is on homelessness. The Legislature’s plan funds the Homeless Housing, Assistance and Prevention (HHAP) program at $900 million — $400 million above the $500 million the Governor carried in his May Revision, and a meaningful step back toward the $1 billion rounds of prior years. However, the additional funding for homeless programs is one of the items the Legislature and the Administration must still reconcile.
The Legislature’s plan also restores housing-production money the May Revise had left out, including $500 million for the Low-Income Housing Tax Credit, $200 million for the Multifamily Housing Program, and $100 million for housing-stability programs, while keeping a November 2026 housing bond on the table. On the streets-and-cleanliness side, the previously secured $40 million in one-time General Fund for Clean California and the dedicated Caltrans homeless-encampment liaisons remain in place.
The plan also carries several public safety investments directly relevant to downtown business districts. It provides $50 million one-time for Proposition 36 implementation—covering court workload, substance use and mental health treatment, victim support, and pretrial services—building on last year’s $300 million investment and bringing the total two-year Prop. 36 commitment to more than $675 million.
The important qualifier is that none of it is final. This is the Legislature’s adopted plan, not a signed budget. HHAP, the Prop. 36 amounts, healthcare, and education funding all remain open items between the Legislature and the Administration, and the figures above could move before the Governor signs.
Governor's Race — Becerra Advances to November
The June 2 primary closed out one of the most wide-open gubernatorial fields in recent memory, and the result is now clear: former Attorney General and U.S. HHS Secretary Xavier Becerra has officially advanced to the November general election, finishing first in the primary. He will face Republican Steve Hilton under California’s top-two system. Tom Steyer, despite spending more than $225 million of his own money, finished third and did not advance to the general election.
Becerra enters the general election as the favorite in a state where no Republican has won a top-of-ticket race in nearly two decades, and he is the only Democrat on the ballot in November. For CDA, the relevant point is the substance: Becerra has built his campaign around housing, healthcare, and the cost of living, and his experience as Attorney General and HHS Secretary gives him direct command of exactly the housing-production and homelessness-response questions that drive downtown recovery. If he wins, downtown advocates would be working with a governor whose stated priorities line up closely with CDA’s legislative pillars.
CDA Priority Legislation — Building an Affordable California Act Qualifies for November
The CEQA reform measure CDA has endorsed, the Building an Affordable California Act, has officially qualified for the November 3, 2026 statewide ballot. The campaign now reports a coalition of more than 125 organizations spanning affordable housing, clean energy, water, agriculture, civil rights and business.
The measure does not exempt projects from CEQA. Instead, it imposes enforceable timelines for agency review and litigation on categories of “essential projects,” including housing, water, energy, transportation, and public safety facilities, while preserving environmental, labor, and tribal protections.
For downtowns, the relevant upside is the same one that drove CDA’s support: the projects that most directly strengthen urban cores are precisely the ones that have been most exposed to open-ended permitting and litigation delay. With qualification settled, attention now shifts to the November campaign, and CDA’s advocacy activity around the measure is expected to increase as the election approaches.
CDA Priority Legislation — Bills Move to Senate
All eight CDA priority bills continue to advance through the Legislative process. They are now working through Senate policy committees and will likely continue to advance through August. CDA has submitted support letters at each stage and has added our voice during committee hearings.
CDA Priority Supported Bills (all bills are currently in Senate Committees):
- AB 1740 (Zbur D) — Urban, Transit-Rich Coastal Communities
- AB 1815 (Wicks D) — Factory-Built Housing
- AB 2074 (Haney D) — The Downtown Revitalization Act
- AB 1679 (Gonzalez D) — Temporary Commercial Permits
- AB 1693 (Zbur D) — Accelerated Retail Building Plan Approval
- AB 2418 (Gonzalez D) – Nonresidential Permit Streamlining
- AB 2663 (Rodgers D) – Alcoholic beverage Off-Sale Privileges
- AB 1941 (Gonzalez D) – Metal Theft
Jason Bryant
CDA’s Legislative Advocate
Principal, Bryant Government Affairs
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