The Governor’s January Budget proposed $450 million over three
budget years to create a new Local Government Sustainability
Fund. The Fund, which would be administered by the Governor’s
Office of Business and Economic Development (GO-Biz), is intended
to provide grants to counties facing high unemployment and
poverty levels in order to advance economic diversification and
climate-resilient economies. This funding is intended to
complement last year’s $600 million investment to create the
Community Economic Resilience Fund.
According to the trailer
bill language released in February, counties with poverty or
unemployment rates of at least 150 percent of the California
statewide rates would be eligible to apply. GO-Biz estimates ten
counties currently meet this definition. Eligible projects for
the grant include process improvement, economic diversification
and stability, and workforce development projects. Counties would
need to demonstrate the current challenges to local revenue
sustainability and how the projects are attributive to climate
resilience.
During recent Assembly and Senate budget subcommittee hearings,
the proposed fund received scrutiny from the
Legislative Analyst’s Office and the subcommittee chairs for
the broad discretion given to GO-Biz to administer the Fund and
the lack of metrics to measure the success of funded projects.
The LAO has recommended the Legislature reject the proposal and
reconsider it next year, as funding for the program would not
begin until the 2023-24 fiscal year. Both budget subcommittees
voted to “hold open” the proposal, meaning it will require
further discussion at a later hearing.
CSAC will continue to monitor discussions on the Local Government
Sustainability Fund, which may or may not be included in the
Governor’s May Budget Revision scheduled to be released Friday,
May 13.
