CSAC Bulletin Article

Deferrals and Cuts in State Budget Remain as Federal Deal Delayed

October 15, 2020

Counties will recall that the state budget passed this summer relied on further federal aid to avoid significant cuts and deferrals. Today, October 15, is the deadline for receiving those federal funds and with negotiations in Washington D.C. still stalled, the $11.14 billion of cuts and deferrals now go into effect.

For counties, the most direct impact will be related to realignment funding. The unprecedented $1 billion realignment backfill is partially dependent on the budget trigger. Without it, the backfill will only total $750 million.

The other affected budget programs include $6.55 billion in deferrals for K-14 education, a nearly $1 billion reduction to higher education, $1.89 billion reduction to state employee compensation, just under $1 billion in borrowing from special funds, $200 million reversion from the infill infrastructure grant program, $150 million reduction to the judicial branch, $90 million reduction to the Golden State Teacher Grant Program, a child support agency $50 million reversion, and a $50 million moderate income housing reversion.

With the October 15 deadline passing, but with a federal aid deal still possible before the new year, it remains to be seen how any relief funds received would be spent. The Legislature is in recess until the newly seated members meet in early December, though they could be called back if the Governor calls a special session.

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