Title
Update on State Budget Activity
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FileID
File ID: 2026-01379
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Location
Location: Citywide
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Recommendation
Recommendation: Receive and file an oral report regarding state budget activity.
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Contact
Contact: Consuelo Hernandez, Director of Governmental Affairs, (916) 808-7395, cahernandez@cityofsacramento.org, Office of the City Manager
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Presenter
Presenter: Consuelo Hernandez, Director of Governmental Affairs, (916) 808-7395, cahernandez@cityofsacramento.org, Office of the City Manager
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Attachments
Attachments:
1-Description/Analysis
2-2026-01379 STAFF REPORT
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Description/Analysis
IssueDetail
Issue Detail: This item is intended to provide an oral update to the Law & Legislation Committee (Committee) including a summary of the 2026-27 state budget.
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PolicyConsiderations
Policy Considerations: The California State Legislature passed its version of the state budget on June 15, with the Governor signing on June 29. As has become common in recent years, however, budget negotiations continued well beyond that date. On June 26th, legislative leaders and the Governor announced a negotiated spending plan that includes $900 million for the Homeless Housing, Assistance and Prevention (HHAP) Program, approximately $700 million for affordable housing programs, and a record $35 billion in state reserves. Additionally, the budget included a total of $175 million for immigrant legal services.
Notably, lawmakers deferred action on the Cap-and-Invest reauthorization package until August. Those negotiations are expected to be among the most closely watched of the year, as the Legislature determines how future Cap-and-Invest revenues will be allocated among competing climate, transportation, housing, and environmental priorities.
Lawmakers also deferred allocation of Proposition 4 funding. Proposition 4, the $10 billion Climate Resilience Bond passed by California voters in November 2024, funds projects targeting safe drinking water, wildfire and flood prevention, and coastal protection. Budget Trailer Bills related to Cap-and-Invest, Prop 4 allocations, as well as several other significant budget trailer bills, are expected in August when the Legislature returns from summer recess.
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EconomicImpacts
Economic Impacts: Not applicable.
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EnvironmentalConsiderations
Environmental Considerations: Not applicable.
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Sustainability
Sustainability: Not applicable.
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Commission/Committee Action
Commission/Committee Action: None.
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RationaleforRecommendation
Rationale for Recommendation: This item is being submitted for informational purposes only.
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FinancialConsiderations
Financial Considerations: None.
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LocalBusinessEnterprise
Local Business Enterprise (LBE): Not applicable.
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