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1 RiversideCA.gov1
RiversideCA.govFiscal Year 2025/26 State Governor’s Budget Proposal Overview Finance CommitteeFebruary 12, 2025Finance Department
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•The State Constitution requires that the Governor submit a proposed budget to the Legislature annually by January 10 and requires that the Legislature pass a budget bill by June 15.•Governor Newsom released the Fiscal Year 2025/26 State Governor’s Budget proposal on January 10, 2025. •The Governor’s Budget serves as a starting point in the budget process. BACKGROUND1 2 1/31/2025
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•FY 2025-26 State Governor’s Budget proposal is balanced with a modest “surplus”. •Assumes continued withdrawals from state budget reserves.•Includes upgraded revenue forecast compared to the 2024 Budget Act. OVERVIEW RiversideCA.gov4
FY 2025/26 General Fund Expenditures and Revenues
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•Budget Reserves and Gann Limit Reforms•Housing and Homelessness•Climate BondBudget Proposals RiversideCA.gov6
U.S. real GDP is projected to grow at 1.5% to 2% annually, starting quarter 4 of 2024.Annual average state inflation rate in 2025 is projected at 2.3%, down from 2.6% in May 2024, due to lower gasoline prices in late 2024.Projected job growth between 2024 and 2027 is expected to be 0.1% higher than previously forecasted due to stronger-than-expected job growth and resilient labor market conditions.Projected average wage growth is projected to be 0.5% higher, due to the significant wage growth in the first half of 2024 in certain labor sectors.Personal income growth is projected to slow from 6.7% in 2024 to 4.2% percent in 2025, stabilizing at 4.6% - 4.7% through 2028.Total housing permitsare projected to be 8% lower than the May 2024 estimate due to subdued permitting in 2024.Economic Forecasts5 6 1/31/2025
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STRATEGIC PLAN ALIGNMENT
HIGH PERFORMING GOVERNMENTCROSS-CUTTING THREADS
Equity
Innovation
Community Trust
Fiscal Responsibility
Sustainability and Resiliency
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That the Finance Committee receive a report on the FiscalYear 2025/26 State Governor’s Budget proposal.RECOMMENDATION7 8