Navigating California’s Revised Budget: Implications for CRE
The Governor's revised budget proposal aims to close the $27.6 billion budget shortfall for the current fiscal year and the projected $28.4 billion deficit for the next year.
What You Need to Know
California's revised budget proposal aims to close massive deficits, but the cost-cutting measures could have significant ripple effects on the state's commercial real estate industry.
From reduced funding for building initiatives to potential new property taxes, CRE stakeholders need to prepare for the budgetary impacts.
How it Impacts You
The budget cuts one-time spending by $19.1 billion and ongoing spending by $13.7 billion through 2025-26, including an 8% reduction in state operations and the elimination of 10,000 unfilled state positions.
This could lead to potential impacts on the commercial real estate industry, such as:
- Reduced funding for energy efficiency tax incentives and adaptive reuse investments, which may affect building operations and development.
- Local governments might want to add new taxes on properties because they're getting less money from the state. This could mean more expenses for property owners and developers.
- Political battles may arise as the industry pushes back against proposed new taxes targeting properties.
What ultimately is passed will be determined in the coming weeks. The governor and legislative leaders still need to hash out what is cut and what stays.
Stay Connected
Stay connected with us at BOMA on the Frontline for the latest news on the budget and more impacting our industry.
