|
State Budget — Final Budget Signed; HHAP Secured at $900 Million
Since last month’s update, the budget has moved from an open question to a signed deal. On June 26, 2026, Governor Newsom, Senate President pro Tempore Monique Limón, and Assembly Speaker Robert Rivas announced a three-party agreement on the 2026-27 state budget, and the Governor signed the $351.7 billion plan on June 29, ahead of the July 1 start of the fiscal year. The final agreement balances the General Fund across two years — closing the deficit for this year and next — while preserving roughly $30 billion in reserves.
Context for CDA members
The most consequential outcome for downtowns is homelessness funding, and it landed where CDA pushed. The enacted budget funds the Homeless Housing, Assistance and Prevention (HHAP) program at $900 million — the amount the Legislature carried in its June plan and $400 million above the $500 million the Governor proposed at the May Revision. The final package also attaches new accountability provisions to the funding, which mirrors the Administration’s stated rationale for the program and strengthens the case for holding this investment level in future rounds.
The enacted budget also carries forward the housing-production and public-safety investments highlighted in last month’s update.
CDA Priority Legislation — The Final Hurdle Is the Aug. 14 Appropriations Deadline
The good news is all eight CDA priority bills cleared their Senate policy committees and now face the most decisive test of the Legislative Session. The Legislature returns from summer recess on August 3, and the Senate Appropriations Committee has until August 14 to decide the fate of measures held on its “suspense file.”
Context for CDA members
The suspense file is where the Appropriations Committee parks any bill with a meaningful cost to the state, then clears the entire list in a single, fast-moving hearing. Bills the chair calls are sent to the floor while bills the chair does not call are left on the file, receive no recorded vote, and die when the deadline passes. Second-house appropriations is historically where bills go to die, including bills that moved through their policy committees with broad, bipartisan support and no registered opposition. Clearing suspense, not the earlier policy votes, is the real test. Once a bill is off the “suspense” file, a favorable floor vote is the likely outcome. CDA has submitted formal support letters on all eight bills and will continue to press committee staff and members through the August 14 deadline.
Status of CDA priority bills heading into the suspense hearing (decisions expected by August 14):
● AB 1740 (Zbur D) — Urban, Transit-Rich Coastal Communities. Support letter submitted; on the Senate Appropriations suspense file.
● AB 1815 (Wicks D) — Factory-Built Housing. Support letter submitted; on the Senate Appropriations suspense file.
● AB 2074 (Haney D) — The Downtown Revitalization Act. Support letter submitted; on the Senate Appropriations suspense file.
● AB 1679 (Gonzalez D) — Temporary Commercial Permits. Support letter submitted; on the Senate Appropriations suspense file.
● AB 1693 (Zbur D) — Accelerated Retail Building Plan Approval. Support letter submitted; on the Senate Appropriations suspense file.
● AB 2418 (Gonzalez D) — Nonresidential Permit Streamlining. Support letter submitted; on the Senate Appropriations suspense file.
● AB 1941 (Gonzalez D) — Metal Theft. Support letter submitted; on the Senate Appropriations suspense file.
● AB 2663 (Rodgers D) — Alcoholic Beverage Off-Sale Privileges. Support letter submitted; already past Appropriations and awaiting a Senate floor vote (Third Reading).
November Ballot Update — CDA-Backed CEQA Reform Is Now Proposition 45
The Secretary of State has assigned proposition numbers for the November 3 statewide ballot, which will carry 14 measures. Three November ballot measures are directly relevant to CDA’s priorities.
Proposition 45 is the CEQA reform measure CDA has formally endorsed. Rather than exempting projects from environmental review, it imposes firm deadlines — a 365-day limit on environmental impact reports and comparable limits on related litigation — for essential project categories including housing, water, energy, transportation, and public safety infrastructure, while leaving environmental, labor, and tribal protections in place. Early polling is strong: a Public Policy Institute of California survey released this summer found likely voters supporting the measure by roughly three to one. For downtowns, the upside is the one that drove CDA’s support — the urban infill and mixed-use projects most central to downtown recovery are precisely the ones most exposed to open-ended permitting and litigation delay. CDA’s activity around the measure is expected to increase as the campaign intensifies.
Proposition 1, the Veterans and Affordable Housing Bond Act of 2026, is an $11.25 billion general obligation bond — roughly $10 billion for affordable rental and ownership housing and $1.25 billion for veterans’ home loans. It aligns squarely with CDA’s pro-housing priorities and would expand the financing available for the affordable and supportive housing that underpins downtown stability.
Proposition 43 is a product of the budget-season dealmaking and warrants watching. It reached the ballot as a legislative compromise (ACA-22) crafted to head off a more sweeping Howard Jarvis Taxpayers Association initiative. If approved, beginning January 21, 2027 it would require a two-thirds vote for local governments to impose, extend, or increase special taxes—including measures placed on the ballot by citizen initiative. However, it would not apply retroactively and needs only a simple majority to pass. Notably, the compromise deliberately left transfer taxes untouched, and a separate legislative conversation about transfer-tax policy—including the effects of measures like Los Angeles’s Measure ULA—is ongoing. That thread is the one most relevant to CDA: transfer taxes bear directly on downtown property transactions and the feasibility of the redevelopment that revitalizes urban cores, and we are tracking it closely.
Jason Bryant
CDA’s Legislative Advocate
Principal, Bryant Government Affairs
| 
