City of Arroyo Grande
Legislative Update
July 28, 2026
Slide 2
State Legislative Update
Funding Update
Federal Legislative Update
PRESENTATION OVERVIEW
City of Arroyo Grande | Legislative Update
STATE LEGISLATIVE UPDATE
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STATE LEGISLATIVE UPDATE: STATE BUDGET
$0 Deficit Focus for Next
Few Fiscal Years
General Fund Spending
Proposed $1.8 B Less
than in January
Minimal Costs – No Core
Expansions of Local
Government Programs
New Ongoing Revenue
Streams for General
Fund
$28.8 B in Reserves for
Future Years
City of Arroyo Grande | Legislative Update
Slide 5
STATE LEGISLATIVE UPDATE: STATE BUDGET
City of Arroyo Grande | Legislative Update
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STATE LEGISLATIVE UPDATE: 3 PARTY AGREEMENT
$351.7 billion in expenditures ($251B General Fund)
Utilizes May Revise Revenue Assumptions
$35.2 billion in total reserves
Proposes additional funding for housing/homelessness
programs ($700m housing/$400m homelessness)
Maintains significant investments in health and human
services programs
Additional funding for Public Safety ($50m for Prop 36
implementation)
City of Arroyo Grande | Legislative Update
Slide 7
STATE LEGISLATIVE UPDATE: QUALIFIED BALLOT INITIATIVES
City of Arroyo Grande | Legislative Update
The bond would authorize $11.25b in housing
investments: $10b for housing construction and
homeownership programs; $1.25b for CalVet
Home Loan Program
• $5.1b Multifamily Housing Program
• $1.15b Supportive Housing and
Homelessness Programs
• $1.1b Homeownership Programs
• $200m Local Housing Trust Fund Program
Proposition 1: Veterans and Affordable
Housing Bond
This measure would prohibit any local
government from imposing, extending, or
increasing any special tax unless it is approved
by a 2/3 majority of voters.
• Aims to close the “Upland Loophole”
• Introduced to counter the Taxpayer
Protection Act
• Does not retroactively repeal existing voterapproved taxes Proposition 43: Local taxes: limitations
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STATE LEGISLATIVE UPDATE: QUALIFIED BALLOT INITIATIVES
City of Arroyo Grande | Legislative Update
Would impose a one-time tax of up to 5% on
taxpayers and trusts with covered assets over
$1 billion.
• Excludes real property
• Allocates 90% of tax revenues for
healthcare; 10% for food assistance or
education
• LAO predicts immediate increase in
revenues, followed by ongoing decrease
Proposition 40: Billionaire Tax
Amends CEQA to expedite environmental
review of most housing, transportation, water,
health, and clean energy projects.
• Sets deadlines for public agencies to
complete environmental review
• Allows expedited review of project’s
environmental impacts
• Limits court review of project approvals by
establishing deadlines for filing and
resolving lawsuits
Proposition 45: Modification of CEQA
FEDERAL LEGISLATIVE UPDATE FEDERAL LEGISLATIVE UPDATE
FEDERAL LEGISLATIVE UPDATE: APPROPRIATIONS
City of Arroyo Grande | Legislative Update Slide 10
Federal Funding
Landscape
FY 27 Earmarks are
Clearing Appropriations
Committee Hurdles
City Funding
Requests
Five Cities Fire Authority
Aerial Ladder Truck –
Included in House
THUD mark-up for
$850,000
Federal
Appropriations Timing
Adoption of final
appropriations bills likely
to occur after November
elections. Projects
included in mark-ups
have traditionally been
incorporated into final
agreement by reference
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FEDERAL LEGISLATIVE UPDATE
City of Arroyo Grande | Legislative Update
FY27 Appropriations Stalled in the Senate
Disagreements on toplines and Senator Mitch McConnell’s hospitalization are delaying bipartisan negotiations in the Senate
House bills are awaiting floor consideration
21st Century ROAD to Housing Act Becomes Law
Creates new flexibilities in formula/entitlement funding and new grant programs for affordable housing design and construction Proposed OMB Rule Regarding Grantmaking
Consolidate administration control over Federal grantmaking Give the administration significant latitude to delay, terminate, or claw back funding
Final rule set for implementation by October 31
On Deck for Extensions
Ongoing delays in the House and Senate are pushing Congress towards extending a number of must-pass bills, including: Surface Transportation Reauthorization, Water Resources Development Act, National Defense Authorization Act, and the Farm Bill
FUNDING UPDATE
GRANT FUNDING UPDATE: IN PROGRESS APPLICATIONS
Pending Grant Dollars: $875,000
City of Arroyo Grande | Legislative Update Slide 13
Program Request Status Description
Federal Community Project Funding $850,000 Pending Five Cities Fire Authority Aerial Ladder Truck Project Lowe’s Community Bucket List Program $25,000 Pending Sand Volleyball Court Improvement Project California Advocacy | Federal Advocacy | Grant Writing
www.TownsendPA.com | (949) 399-9050
Casey Elliott
Vice President & CFO
[email protected]
Ryan McCarthy
Associate
[email protected]
Alex Gibbs
Grants Director
[email protected]
Andy Ketsiri
Grants Analyst
[email protected]
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QUESTIONS?
City of Arroyo Grande | Legislative Update