Governor Newsom and Legislative Leaders Announce Agreement on Outstanding Budget Items, Newsom Signs 2019-20 Budget Act

On Thursday – the deadline for Governor Gavin Newsom to sign the 2019-20 Budget Act into law – Governor Newsom, Senate President pro Tempore Toni Atkins, and Assembly Speaker Anthony Rendon announced they had reached a final agreement on the budget and accompanying legislation. Earlier in the week, Governor Newsom had indicated reluctance to sign the budget until a deal was reached on housing and homelessness issues.

After extensive negotiations between the Newsom Administration and legislative leaders this week, the agreed-upon proposal is slated to provide substantial support for housing and homelessness programs, incentives for local governments to adopt pro-housing approaches, and a mechanism to encourage local governments to comply with housing element laws.

In summary, the housing omnibus measure (AB 101/SB 102) is slated to provide a total of $650 million – $175 million to counties, $275 million to California’s 13 largest cities, and $190 million to Continuum of Care (COC) entities – for homelessness services. Investments into housing programs include over $1.75 billion to be allocated to local housing planning, infill infrastructure, and low-income and mix-income housing development loans. Additional incentives for housing development are proposed to be available to local jurisdictions. Those jurisdictions not complying with housing element law are subject to penalties ranging from $10,000 to $600,000 per month. The Legislature is expected to act upon the housing omnibus measure next week.

In signing the $214.8 billion budget, Governor Newsom touted his Administration’s approach to building a strong fiscal foundation and making progress toward “combatting the affordability crisis” faced by residents throughout the state. Governor Newsom, in an announcement, noted investments in health and public health, housing and homelessness, paid family leave, early childcare and education, and emergency preparedness.

Governor Newsom also signed a number of budget trailer bills, including those related to health, mental health, and human services. A statement from Governor Newsom detailing key investments through the 2019-20 Budget Act, as well as a listing of budget trailer bills signed into law, is available here.