After 51 days, the California Legislature finally resolved the budget concerns of Republican senators and passed a state budget with the required two-thirds majority. Governor Schwarzenegger reviewed the budget sent to him and released his version with up to $700 million eliminated through his "blue pencil" line-item veto authority.
From analysis provided by Housing California we can expect the budget to include Senate Bill (SB)77 appropriations totaling $103 billion of state funds to include a number of housing-related expenditures:
- $4 million of General Fund (GF) dollars for a new pilot program that serves mentally ill parolees.
- $4 million of General Fund dollars for the Emergency Housing Assistance Program (EHAP) operating grants.
- $19.7 million of General Fund dollars for the Transitional Housing Placement Program for Emancipated Foster/Probation Youth (THP-Plus).
- $55 million of General Fund dollars for the Integrated Services for Homeless Adults with Serious Mental Illness Program.
- $95 million of Prop. 1C funds for the Transit-Oriented Development (T.O.D.) Program.
- $300 million of Prop. 1C funds for the infill home development and brownfields clean-up program.
According to Housing California's analysis, SB 77 does not appropriate any of Proposition 1C's $100 million for "innovative financing" or $200 million for "housing-related parks." As a result, SB 586 (Dutton) and AB 1252 (Caballero) or SB 732 (Steinberg) will remain the vehicles, respectively, for appropriating these Proposition 1C funds and designing the programs and we will keep you informed on the status of these bills.
State legislators also sent Governor Schwarzenegger 15 "trailer bills," which can both amend the budget bill appropriations and enact policy changes necessary to carry out the budget's revenue or spending assumptions. The legislature usually passes the trailer bills at the same as the budget, and the governor generally -- but not always -- signs them. The housing-related trailer bill is SB 86. Additionally, SB 851 (Steinberg), although it’s not officially a trailer bill, would implement the new pilot program that would serve mentally ill parolees (see above).
SB 86 impacts Proposition 1C's $850 million Regional Planning, Housing, and Infill Incentive Account and the new infill program would reflect most of the joint proposals made by Housing California and the Planning and Conservation League, a win for affordable housing advocates statewide. The program would include:
- That funds will be expended on public infrastructure e.g. roads and sidewalks, that directly support residential development in which at least 15% of the homes are affordable at 60% area median income (AMI) for rentals or 120% AMI for for-sale homes.
- Developers are allowed to apply directly for funds.
- Any supported development must be built at the "Mullin densities" or higher, with an adjustment for rural areas.
- Developments will be ranked based on their density; affordability; and proximity to transit, job centers, and other amenities.
- There is no "affordability cap," which had appeared in a previous version of the language. The cap would have given the same number of points in the ranking system for a development with 25% affordable units and developments with 26-100% affordable units.
SB 86 appropriates $240 million to the infill program and an additional $60 million to the CALReUSE Program for brownfields clean-up.
Finally, SB 851 would establish PROMISE (Program for Returning Offenders with Mental Illness Safely and Effectively) using the $4 million in the California Department of Corrections and Rehabilitation budget. PROMISE would provide homes with services (supportive homes) for up to 100 mentally ill parolees in each of three parole regions. SB 851 is currently being heard in the Assembly Appropriations Committee.
