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Administration and LAO outline Proposition 98 growth, sensitivity and options on $1.6 billion settle‑up
Summary
Department of Finance and the Legislative Analyst’s Office told the Assembly Budget Subcommittee that the governor’s budget raises the Proposition 98 guarantee but proposes postponing roughly $1.6 billion of a settle‑up payment; LAO recommended alternatives including a reserve deposit.
The Department of Finance and the Legislative Analyst’s Office told the Assembly Budget Subcommittee on Oct. 27, 2025, that the governor’s January budget projects higher Proposition 98 obligations but proposes delaying part of next year’s settlement payment to manage revenue volatility.
Alex Shope of the Department of Finance summarized the governor's estimates: the Proposition 98 guarantee for 2025–26 is projected at $118.9 billion, about $3.6 billion higher than the 2024 Budget Act. The administration projects a $7.5 billion increase across 2024–25 and 2025–26 relative to enacted levels, driven by higher general fund estimates, property…
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