Good afternoon ASBCSD members:

 

LAO finds CA’s multiyear budget deficits “alarming” CSDA Chief Executive Officer Neil McCormick issued the following response to Governor Gavin Newsom’s January 2026-27 State Budget proposal: “Projecting the budget months in advance is no easy task, but one thing that is clear is the fundamental cost of critical infrastructure is outpacing funding for the special districts largely responsible for California’s water, sanitation, fire protection, resource conservation, mosquito abatement, and more. As we all strive to make California more affordable, our local service specialists seek the State’s partnership to uphold voter-approved funding and to refrain from legislation and regulations that increase the cost of delivering the essential services our communities rely on for housing, economic development, and quality of life.”  CSDA’s full overview of the Governor’s Budget proposal can be found at Advocacy News - California Special Districts Association. On January 12, California’s non-partisan Legislative Analyst’s Office (LAO) issued its Overview of the Governor’s Budget. The LAO’s Executive Summary is provided below: Governor’s Budget Roughly Balanced on Higher Revenues. The administration projects the budget faces a roughly $3 billion deficit. This is lower than our November Fiscal Outlook estimate of an $18 billion deficit, for two offsetting reasons. First, and most importantly, the administration’s revenue estimate is considerably higher than ours because it does not incorporate the strong risk of a stock market downturn. Second, however, these higher revenues are offset by higher spending under the administration’s assumptions and estimates.