Jeff Neil, a representative of Sacramento advocacy firm Nielsen Merksemer, briefed the Lake County Board of Supervisors on the 2025 California legislative session and its implications for county programs and residents. He described the state budget as balanced but "surprisingly good" and warned of fiscal risks heading into 2026.

Neil said the Legislature reauthorized cap-and-trade — now referred to as cap and invest — and made a number of late-session allocations from Proposition 4, a voter-approved resources bond. "I think a lot of us were gonna say there's $10,000,000,000 that have been approved by voters," he said, noting the funds are intended for water projects, flood control, parks, fire mitigation and other resource priorities. Neil added that the Legislature allocated over one-third of Prop. 4 across categories but that some project-specific allocations (for example, offshore wind) will not be relevant to inland counties such as Lake County.

Neil outlined how proceeds from the Greenhouse Gas Reduction Fund (GGRF) flow to programs of county interest, including the Affordable Housing and Sustainable Communities program (which he said receives roughly $800,000,000 a year for planning and development), transit-related funds, a community-level clean-air monitoring program and the Safer Drinking Water Program for very small systems. He warned that GGRF auction revenues have historically ranged roughly from $3 billion to $5 billion, and when revenues fall the continuously appropriated programs (affordable housing, safer drinking water and certain transit funds) are likely to experience the first reductions.

On artificial intelligence and automated decision systems, Neil reported a slate of contested bills seeking to add safeguards for government use of such systems failed to pass in the final days of session after extensive amendments. He cautioned that one draft of AB 1018, as described in his overview, risked sweeping in routine tools (he referenced spreadsheet projections) and could have imposed costly disclosure and compliance burdens; Neil also said one AI-related bill that cleared the Legislature was vetoed by the governor.

Neil briefed supervisors on recent fire-insurance legislation and regulatory changes, noting AB 1 passed and that new catastrophic-modeling guidance and insurer behaviors are driving higher premiums in many high-fire-risk ZIP codes. When Supervisor Parson asked about the likely size of FAIR Plan increases for county neighborhoods, Parson said many local ZIP codes face large increases and asked, "So what do you think the likelihood of of these increases going through is?" Neil replied that model-driven pricing and whether costs are spread across more policyholders will determine the size of increases and offered to help the county engage state officials with case studies.

Supervisor Sabato raised concerns about changes in federal funding and HR 1-era adjustments that affect hospital funding and rural hospitals’ ability to qualify for grants. "What is the state doing to make sure because I'm worried they're not their, application might be denied," Sabato asked, citing canceled projects in nearby counties. Neil acknowledged the risk and said counties will need to work to keep rural hospital support high on state priority lists while competing with other statewide pressures.

The presentation closed with Neil saying his office will send county staff a more detailed, tagged list of Proposition 4 allocations and other budget items to help staff identify likely funding opportunities. The board opened and then closed public comment with no speakers and took no formal action on the presentation.

Why this matters: The briefing identified several near-term risks and opportunities for Lake County — volatile GGRF revenues that could affect housing and water projects, new insurance pricing dynamics that may raise costs for homeowners in high-fire areas, the uncertain future of AI oversight laws that could affect government systems, and federal/state funding shifts that could strain rural hospitals. County staff and supervisors were offered detailed allocation lists and an offer from Nielsen Merksemer to help coordinate outreach to state agencies.

Next steps: Nielsen Merksemer will provide a tagged Prop. 4 allocation list and work with county staff to identify applicable funding opportunities and to facilitate conversations with the Department of Insurance and relevant state agencies.