In his final act of the year’s regular legislative session, Governor Gavin Newsom announced he signed AB 179, which creates new tools for California to set aside a portion of anticipated surplus funds in future fiscal years.
“Building on the balanced budget we passed in June that eliminated our deficit — without raising taxes on hardworking Californians and without deep program cuts — this legislation ensures that we continue to live within our means, just as families across the state do. By creating a holding account for projected surpluses, we’re taking a conservative, prudent approach to budgeting,” said Governor Gavin Newsom.
For the first time in California history, this legislation establishes a Projected Surplus Temporary Holding Account. This allows the state to place anticipated surpluses in reserve for future use. The measure aims to ensure that California’s budget remains balanced and that funds are available for critical services such as education, healthcare, and infrastructure improvements without sudden program cuts or tax increases.
The bill also underscores the state’s commitment to smart fiscal management by enabling the Department of General Services (DGS) to increase efficiencies in public works projects, job order contracting, and contracting oversight.
This legislation builds on California’s long-standing approach to fiscal discipline. Under Governor Newsom’s leadership:
– California has eliminated its deficit through careful budgeting and prudent fiscal management.
– The state has enacted a balanced budget without raising taxes or making deep cuts to core services such as public safety, education, and healthcare.
– Record amounts of reserves have been set aside consistently by both the Governor and Legislature to prepare for any future economic challenges.
The new holding account is designed as a safeguard to ensure that funds are only spent once they are realized. In previous years when California experienced significant budget surpluses, much of that money was used to pay down long-term debt and fund one-time expenditures. AB 179 aims to maintain this responsible approach well into the future.
Governor Newsom also announced he has signed several other budget-implementing legislations:
– AB 157 by Assemblymember Jesse Gabriel (D-Encino) – Budget Act of 2024.
– AB 158 by Assemblymember Jesse Gabriel (D-Encino) – Budget Acts of 2022 and 2023.
– AB 176 by the Committee on Budget – Education finance: education omnibus trailer bill.
– AB 177 by the Committee on Budget – Health.
– AB 178 by the Committee on Budget – Public resources trailer bill.
– AB 179 by the Committee on Budget – State government.
– AB 180 by Assemblymember Jesse Gabriel (D-Encino) – Budget Act of 2024.
– AB 181 by the Committee on Budget – State employment: State Bargaining Units: agreements: compensation and benefits.
– AB 218 by the Committee on Budget – Oil and gas: trailer bill.
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