Federal and State Allocations
Between March 2020 and March 2021, the federal government provided nearly $5.8 trillion in aid to the U.S. economy, including the $1.9 trillion ARPA signed into law on March 11, 2021. As included in the ARPA plan update to the Board on February 1, 2022, the County has received $26,534,211 of its total ARPA allocation of $53,068,442. However, counites, unlike many other agencies, are mandated to fund expanded pandemic response services. For our County, this resulted in less ARPA uses for internal pandemic costs.
On October 19, 2021, the U.S. Senate unanimously passed the bipartisan State, Local, Tribal, and Territorial Fiscal Recovery, Infrastructure, and Disaster Relief Flexibility Act (S. 3011) that provides flexibility for use of unallocated ARPA funding. Subsequently, the U.S. House of Representatives introduced companion legislation (H.R. 5735). While this act would not provide any new funding, and the County is expected to fully use all its ARPA allocation, should the County end up with unallocated ARPA funding, this act would provide additional flexibility in using any un-allocated funds.
On January 11, 2022, Governor Gavin Newsom released his 2022-23 Proposed Budget for the State of California. The State continues to see strong growth in its revenues from high income earners that drive capital gains and sales taxes. Although this growth is leading to continued historic budget surpluses, it was noted that these revenue streams are volatile and approaching levels seen within the last two decades preceding recessions. Projections were also finalized before the surge of the Omicron variant, adding uncertainty to the State’s recovery trajectory as issues surrounding low labor force participation, high inflation and supply chain issues persist.
The Governor's January estimate is for the State to have a $45.7 billion surplus, of which $20.6 billion remains discretionary. Resources are proposed to address what the Governor dubbed the ‘five existential threats’ facing the State: the COVID-19 pandemic, homelessness, climate change, affordability, and crime. Many of the new spending proposed builds on initiative started in the previous fiscal year.
County formula funding projections reflects the State’s strong recovery with 1991 and 2011 realignment expected to grow 6.4% growth in current year and 3.9% in 2022-23. Gasoline excise tax is projected to grow 9.1% from current year to next year, fully funding the Highway User Tax Account and 70% of the Road Maintenance and Rehabilitation Account (RMRA).