ADVOCATING FOR THE INDUSTRY


The Governor will certainly be further tested this September, with a key deadline to sign or veto bills that make it to his desk, remaining fiscally prudent while also continuing to support key state programs.


Halfway Through the Legislative Session


BY FELIPE FUENTES T


he 2024 legislative session has been defined by fiscal uncertainty as the state’s budget overview


continues to bring bad news. Compared to the boom cycle of the 2022-2023 state budget when it had a $97.5 billion surplus, California is clearly in a bust cycle now with a deficit of approximately $45 billion.


BUDGET DEFICIT Tis past spring, the Governor and Leg- islature took early action to reduce the budget shortfall by $17 billion, thereby leaving the deficit at $27 billion. Tis move was done to address issues that the Legis- lature and Governor immediately agreed upon and leaving tougher negotiations to the summer. Teir early action reduced one-time funding by nearly $4 billion, $5 billion in revenue and borrowing, $5 billion in delays and deferrals, and $3 billion in cost shifts from the General Fund to other special funds including the Greenhouse Gas Reduction Fund. Since then, the Governor and Legisla-


ture have negotiated the more challenging aspects including cuts and reductions to social safety net programs and climate


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CALIFORNIA CONSTRUCTOR JULY/AUGUST 2024


change efforts, while also addressing ad- ditional operational costs at state agencies by cutting 5% of each agency’s budget and eliminating thousands of vacant state jobs. Additional funding was shifted from


the state’s General Fund to other funding sources not reliant on income tax returns or cutting more programs that relied on one-time funding. Importantly for AGC of California, the budget for infrastructure projects remains largely intact.


LEGISLATION On a parallel track, more than 1,000 bills are moving through the legislative process. Tis is roughly half the bills that were introduced in January and Febru- ary this year. Tese bills have additional possible implications to the state’s budget that could further exacerbate California’s budget crisis. Part of the Legislature’s job is to hold


bills with significant fiscal impacts through the appropriations process in both houses. While that process does help cull legisla- tion, there are many bills that still move forward with cost implications. Tis will put pressure on Governor Newsom as we


approach the end of the legislative session to wield his veto pen on legislation that has fiscal impact on the state’s budget. Last year, Governor Newsom set the


tone regarding the state’s budget outlook in vetoing several bills. He noted that with the state facing continuing economic risk and revenue uncertainty, it is important to remain disciplined when considering bills with significant fiscal implications. The Governor will certainly be further tested this September, with a key deadline to sign or veto bills that make it to his desk, remaining fiscally prudent while also continuing to support key state programs. Even with these challenges, there are


still opportunities for AGC of California to support or fight against legislation that are of primary interest for contractors. Tese include bills about increasing employer obligations, providing additional project delivery tools, expanding workforce de- velopment, and protecting transportation funding.


ADVOCACY A key ingredient to our success in ad- vocacy efforts directly involves you, the


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