FCMAT report and Los Angeles County warn AB 218 revival window could strain local budgets

The California State Assembly Budget Subcommittee on Accountability and Transparency heard detailed testimony on the fiscal consequences of AB 218, the law that expanded the statute of limitations for certain childhood sexual‑abuse claims. The state’s Fiscal Crisis & Management Assistance Team (FCMAT) presented a study outlining financing options, data gaps and prevention recommendations for public agencies facing claims and settlements.

Michael Fine, chief executive officer of FCMAT, said the January report contains 22 recommendations across four themes: improving data collection and classification for claims, identifying timing and financing mechanisms for judgments and settlements, studying a victims’ compensation fund, and emphasizing prevention. "The report concludes that there is a data and information gap driven by the lack of consistently classified and reported data on the subject that will, fully convey the magnitude of the challenge," Fine told the committee.

Los Angeles County’s chief executive, Fisia Davenport, described the county’s tentative $4 billion settlement under AB 218 and outlined the fiscal consequences if the board approves the plan. Davenport said the county is likely to use a mix of reserves, rainy‑day funds and borrowing to meet the obligation and that the county anticipates paying "hundreds of millions of dollars annually through 2030," with additional debt service continuing beyond that date. She said departments were asked to prepare curtailment plans to reduce spending and that the county is pursuing state legislative tools that could ease long-term impacts.

Why it matters: School districts, counties and other public entities may face retroactive premiums, special assessments from joint risk pools, direct settlement costs and long-term debt service. FCMAT told the subcommittee that lack of consistent statewide data complicates planning, that insurance market structures (public entity pools and reinsurance layers) produce possible retroactive assessments, and that prevention measures are essential to reduce future liability.

Public‑sector and nonprofit stakeholders who testified at the hearing described immediate operational impacts: - The County Health Executives Association said 61 local health departments lost nearly $400 million in federal pandemic‑era funding abruptly terminated by HHS in late March, undermining public‑health staffing and infrastructure. - County and school officials described rising retroactive assessments by school risk pools, difficulty locating historical insurance records for decades‑old claims, and the threat that foster family agencies and other nonprofit providers could close because insurance costs have spiked. A coalition witness said roughly 220 foster family agencies face potential closure, affecting about 7,400 children.

FCMAT recommended studying a victims’ compensation fund modeled in part on the September 11 Victims Compensation Fund as an alternative mechanism to ensure survivors access redress without requiring each case to exhaust lengthy and costly litigation, and proposed timing and judicial‑validation mechanisms to enable financing without triggering constitutional debt limits.

No legislative action or appropriation was decided at the hearing. Committee members asked for continued work on data collection, financing options and prevention measures and noted several related bills in the Senate that are being considered to provide tools to public agencies.