California Governor Gavin Newsom has unveiled his second spending plan, the largest in the state’s history, offering a detailed look at his top priorities for the coming year, which includes billions for construction spread over the vast array of state agencies and departments.

The Legislature has been meeting its statutory deadline (June 15th) for the last several sessions, so expect the new budget to go to work July 1, the start of the 2020-2021 fiscal year.

Here are a few highlights from the plan and opportunities for our industry:

Deferred Maintenance

There is a $61.7 billion backlog of needed repairs for “infrastructure” from $3.6 billion funneling into the Department of Transportation to $1 million for the Department of Emergency Service. Much of the money will go into rehab and updating deteriorating state facilities, which is good for contractors.

Caltrans

The spending plan continues to implement SB 1 with total SB 1 revenues of $5.1 billion. Of that amount, only $1.4 billion would be for state highway repairs and maintenance projects, but a similar amount goes to local public works departments for road repair. Most interestingly, there is NO money allocated to the High-Speed Rail Authority, with direction to finish the Central Valley portion with existing funds.

Department of Housing & Homelessness

Governor Newsom is doubling down on the $1.15 billion previously allocated for local governments, with this new proposal plans for an additional $1 billion. This includes a new California “Access to Housing and Services Fund,” a $750 million investment in new affordable housing units and subsidies for rentals. As with all “new” programs, you can expect to see most of the money to go toward hiring people to fill the newly created jobs. There is a possibility of actual housing construction this year, Sacrament watchers say

It is no surprise that, for the sixth year since voters approved nearly $3 billion in bond funds to build new dams, no new dams are in the budget. There is money allocated to fund the various state matches for federal programs. The total for the SWRCB is being cut by $700 million, even though they are adding 125 new staff members.

There will be more information and, perhaps, some surprises in the coming budget process, but don’t expect any big windfalls for our industry but a more steady-as-she-goes state funding for infrastructure.

 

By Brendan Slagle, ECA President Email: [email protected]