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Prepared by Precision Advocacy
As of October 7, Governor Gavin Newsom still has almost 400 bills to sign or veto before the deadline of October 13. This is typical of gubernatorial action at the end of the year - in most cases, governors began slowly and act on a large number of bills in the last week before the deadline.
As 2026 approaches, policymakers and stakeholders are reviewing the unfulfilled objectives of 2025 and starting to develop how those policies might take shape next year. The following is an overview of potential issues that could affect the county.
Real Estate Transfer Tax Legislation. The recent legislative session concluded with intense discussions surrounding potential legislation aimed at restricting local governments' ability to levy real estate transfer taxes. This last-minute effort had two primary objectives: to amend the scope of Los Angeles County's Measure ULA (and potentially statewide real estate transfer taxes), and to persuade proponents of the "Save Prop 13" initiative to withdraw it from the ballot.
Los Angeles Mayor Karen Bass and former Assembly Speaker Bob Hertzberg attempted to forge a "grand bargain" into state law through SB 423, but fell short of a final agreement. Authors of SB 423, Senator Lena Gonzalez (D-Long Beach) and Assemblymember Tina McKinnor (D-Inglewood) have indicated their intent to move forward with some version of the legislation in January.
This timeline may prove too late to neutralize the Save Prop 13 anti-tax campaign. The Howard Jarvis Taxpayers Association is already actively collecting signatures and raising funds in support of the measure. Real estate interests, predominantly from Los Angeles, have indicated their willingness to invest tens of millions of dollars to pass the initiative, in large part due to their frustration with Measure ULA.
Measure United to House L.A. (ULA). Measure ULA, enacted in 2022, was intended to tax high-value real estate transactions in Los Angeles, with a 4% levy on properties between $5 million and $10 million and 5.5% on those exceeding $10 million (these rates have slightly increased with inflation). Properties below these thresholds are taxed at approximately 0.5%. The measure, backed by 58% of Los Angeles voters, has raised around $830 million since 2023, significantly contributing to the city's homelessness initiatives by funding affordable housing, renter subsidies, and legal aid for tenants.
However, the "mansion tax" has faced criticism for its unintended consequences. It applies not only to mansions but also to commercial, industrial, and multifamily residential projects, including land sales for new apartment developments. Researchers at UCLA and the Rand Institute estimate that Measure ULA has led to a reduction of 1,910 apartments per year, including 168 affordable units, by depressing new construction of multifamily housing. This has frustrated the real estate industry, leading them to support the Save Prop 13 initiative.
There is growing concern in Los Angeles and among Sacramento Democrats that Measure ULA's current form has become a political liability, potentially fueling the statewide campaign against tax measures. Sales of multifamily properties subject to Measure ULA have seen a steep decline in Los Angeles since its implementation and remain below those in neighboring cities. The Howard Jarvis Taxpayers Association and its political allies are highlighting Measure ULA as a prime example in their statewide campaign against similar tax initiatives.
Save Prop 13. The Save Prop 13 initiative aims to repeal Measure ULA and 24 other transfer taxes in California. It also targets property taxes passed via voter initiative that did not achieve a two-thirds majority vote. Summary of the proposed ballot measure:
- Special Taxes: This measure would mandate a two-thirds vote for approval of all special taxes, regardless of whether they are introduced by citizen initiative or local government. It would invalidate existing property-related special taxes approved by less than two-thirds of voters on December 31, two years after the measure's enactment. Voters could reauthorize or establish new special taxes with a two-thirds vote.
- Charter City Transfer Taxes: The measure would prohibit charter cities from imposing their own transfer taxes. It would invalidate existing charter city-only transfer taxes on December 31, two years after statewide voters enact the measure, and would prevent the establishment of new ones. This directly challenges early 1990s court decisions that allowed charter cities to impose their own real estate transfer taxes and set their rates. As of January 2025, 26 charter cities have established such taxes.
- Transfer Tax Cap: The measure would cap transfer tax rates on real estate sales at slightly more than one-twentieth of one percent of the property's value.
- Voter-Backed Campaigns: For local tax measures initiated by voter-backed campaigns (as opposed to city councils) and earmarked for specific purposes, the proposal would raise the required electoral support from a simple majority to two-thirds.
If successful, this measure could result in municipal governments across California losing billions of dollars, with taxpayers potentially saving an equivalent amount. Voter-proposed tax increases have been approved by simple majorities in various cities and counties, and transfer tax hikes have been a popular funding source for some local governments.
On August 29, the Howard Jarvis Taxpayer Association’s ballot measure petition was cleared for circulation by the Secretary of State. Officially named "Limits Ability of Voters to Raise Revenues for Local Government Services," this proposed ballot measure requires 874,641 eligible signatures by February 25, 2026, to qualify for the November 2026 ballot.
ACA 13. Even if the signature-gathering effort is successful, the Save Prop 13 campaign faces an uphill battle. In late 2023, the legislature advanced its own complex ballot measure (ACA 13) that would require future initiatives seeking to raise the threshold for passing other measures to meet that same higher threshold (in this case, two-thirds) before becoming law. This effort was introduced to counter the prior Howard Jarvis Taxpayer Association initiative which was removed from the ballot by court order. ACA 13 is already slated for the November 2026 election and, if passed, would apply to any other measures on the same ballot.
Housing Bond Initiatives for 2026
California Housing Bond (AB 736/SB 417 - $10 Billion). The proposed $10 billion California Housing Bond, which failed to advance in 2025, is now set for a 2026 push. Backers, including the Housing Bond California coalition, remain optimistic, despite their preference to have started campaign infrastructure in 2025. This bond aims to fund affordable housing and supportive housing initiatives.
- Key Allocations
- Multifamily Housing Program (MHP): $5 - $5.25 billion
- Supportive Housing (through MHP): $1.7 - $1.75 billion
- CalHOME/My Home Down Payment Assistance: $1 - $1.2 billion
- Portfolio Reinvestment Program: $800 million
- Acquisition/Rehabilitation of Unrestricted Housing: $500 million
- Joe Serna, Jr. Farmworker Housing Program: $250 - $350 million
- Tribal Housing: $250 million
- Infill Infrastructure Grant Program: $400 million (AB 736 only)
- Wildfire Prevention/Mitigation/Displacement: $200 million (SB 417 only)
- Supporting Organizations (partial list)
- California Apartment Association
- California Housing Consortium
- California Housing Partnership
- California YIMBY
- Housing California
- Jamboree Housing Corporation
- California State Association of Counties
- League of California Cities
- Santa Ana City Councilmember Jessie Lopez
- Disability Rights California
- Orange County Waterkeeper
- United Ways of California
- Western Center on Law and Poverty
Middle-Class Homeownership and Family Home Construction Act ($25 Billion). Concurrently, former Assembly Speaker Bob Hertzberg, with support of the building trades, is championing the California Middle-Class Homeownership and Family Home Construction Act of 2026, a $25 billion ballot initiative focused on expanding homeownership for middle-income Californians. The proposal is pending title and summary at the Attorney General’s office.
After legislative attempts in prior years stalled, Hertzberg independently raised private funds for research and policy design.
- Core Principles:
- Market-based solution bridging the gap between subsidized affordable housing and expensive market-rate options.
- Aimed at new construction for middle-class ownership.
- Distinct from broader rental affordability challenges or first-time buyer programs.
- Goal: Enable working families to build generational wealth and remain in California.
- Proposed Solution:
- Increase the supply of middle-class housing through new construction.
- Create a program that supports building more middle-class housing, unlike subsidy programs that often just raise prices.
- Focus on homeownership to enable wealth building.
Budget. While state revenues align with 2025 Budget Act projections, the financial implications of federal H.R. 1 are a primary concern for lawmakers and stakeholders as the 2026 budget season approaches. The administration and legislature have stated unequivocally that the state will not provide funds to offset these reductions. Before discussions on congressional redistricting, some legislators had considered exploring revenue-raising options with the administration and the full legislature. However, this exploration was cut short by the prioritization of Proposition 50 in the final month of the legislative session. For counties, the impacts of H.R. 1 will primarily affect CalFresh food assistance and healthcare services for individuals enrolled in Medi-Cal and Covered California.
CalFresh reductions will result in increased cost sharing for program administration, increased workload for Orange County Social Services Agency staff, and decreased access to food assistance for county residents.
- Increased administrative costs from 50% to 75% will cost $685 million - $474 million in state General Fund costs and $211 million in county costs (approximately $9 million for Orange County).
- Requires states administrative error rates of greater than 6% to contribute at least 5% of the cost of CalFresh allotments with contribution rates increasing based on a state’s error rate (5-15%). California’s error rate in 2024 is 10.98%. This provision could increase state General Fund costs by $2 billion. Under current law, counties do not have a share of cost for CalFresh benefits.
- The California Department of Social Services is also estimating that the changes will result in more than 400,000 Californians losing access to CalFresh.
Changes to Medi-Cal will lead to a rise in eligibility redeterminations for the Orange County Social Services Agency and an increase in the number of indigent individuals counties are responsible for. Additionally, the uninsured population will grow. These changes will also have broader financial consequences, including reduced revenue for public hospitals, higher uncompensated care costs, and a negative impact on the state budget due to adjustments in Managed Care Organization tax and Hospital Quality Assurance Fee requirements.
Required Covered California changes will increase cost of coverage and result in additional uninsured individuals, in particular to immigrant populations.
Strengthening Enforcement Against Intoxicating Hemp Products
Last week, Governor Newsom signed AB 8 (Aguiar-Curry), which aims to enhance state and local enforcement authority and permanently ban the sale of intoxicating hemp-derived and synthetic THC products outside California’s regulated cannabis system.
“California’s nation-leading cannabis framework protects consumers and ensures products are tested and safe,” said Governor Newsom. “AB 8 strengthens those protections and permanently closes loopholes that have allowed unregulated intoxicating hemp products to reach kids and the broader public.”
Addressing Intoxicating Hemp. In recent years, concerns have mounted about the spread of intoxicating hemp products in everyday retail settings, most notably in vape shops and online. A February 2025 white paper, The Great Hemp Hoax, reviewed more than 100 products from 68 brands and found that 95% contained synthetic cannabinoids prohibited under California law, 88% exceeded the legal THC limit for hemp, and vape products marketed as “hemp-derived” averaged 268% higher THC equivalency than allowable for adult-use cannabis.
Enforcement Under Prior Emergency Authority. In September 2024, the state adopted emergency regulations under the Department of Public Health to respond to these risks. These rules targeted intoxicating hemp products, with an emphasis on protecting vulnerable populations. Under that framework, the Department of Alcoholic Beverage Control (ABC) recently reported that since September 2024, ABC agents visited 14,743 businesses, removed 7,210 illegal products, and intervened at 151 locations statewide.
Key Provisions of AB 8
- Bans intoxicating hemp and synthetic THC products from being sold outside licensed dispensaries
- Grants and clarifies local law enforcement authority to inspect, seize, and destroy illegal hemp or cannabis products
- Codifies enforcement powers for both state and local law enforcement
- Brings hemp cannabinoids, including trace THC, into the existing cannabis regulatory framework (MAUCRSA), ensuring uniform safety, labeling, testing, and taxation
Public Health and Enforcement Rationale. As Majority Leader Aguiar-Curry noted in her press release, “limited enforcement and rapidly evolving industry practices have led to a surge in intoxicating hemp products that are easily accessible to consumers—including youth—posing public health risks and undermining California’s regulated hemp and cannabis markets.”
By establishing clear enforcement authority and regulatory alignment, AB 8 aims to shield consumers, especially youth, from untested and mislabeled products, reduce illicit market competition, and elevate compliance across both hemp and cannabis sectors.
Broad Support from Law Enforcement and Local Government. AB 8 was supported by the California State Association of Counties (CSAC), the League of California Cities, the California Narcotics Officers Association, and a number of Orange County–area law enforcement associations, including the Brea Police Association, Fullerton Police Officers’ Association, Newport Beach Police Association, and the Santa Ana Police Officers’ Association.
Local Impact: What This Means for Orange County. For Orange County, AB 8 provides additional enforcement tools to safeguard public health and ensure legal retail compliance across the county’s cities and unincorporated areas. Local law enforcement agencies now have clear statutory authority to interdict unregulated hemp products, inspect retail premises, and remove illicit inventory—strengthening public protection, supporting regulatory oversight, and deterring youth access.
Read the governor’s bill signing announcement here.
California's FAIR Plan Files for a Major Rate Increase
The California FAIR Plan, which serves as the insurer of last resort for homeowners, has proposed a 35.8% increase in home insurance rates, effective next spring. If approved, this would be the program's most significant rate hike in at least seven years.
The proposed changes would impact policyholders differently. Approximately half of all customers could see increases ranging from 40% to 55%. While some might experience rate decreases of up to 78%, four policyholders could face increases exceeding 300%. These new rates would apply upon renewal, starting after April 1.
A FAIR Plan spokesperson attributed wildfire risk as the primary driver for these rate adjustments. Homeowners in lower-risk areas, such as the Central Valley, might see reduced rates, whereas those in high-risk regions like Sonoma County and the Sierra Nevada foothills could face substantial increases. Discounts are available for homeowners who implement wildfire risk reduction measures on their properties.
Currently, the FAIR Plan policy only covers fire damage, requiring policyholders to obtain separate coverage for liability, water damage, and other risks. Many homeowners report that opting for the FAIR Plan doubles or even more than doubles their previous private market rates, even before any recent increases.
On average, the combined annual cost of a FAIR Plan policy and a Difference in Conditions (DIC) policy is around $3,200. This figure, cited by multiple consumer and industry sources, is more than twice the average cost of a standard private homeowners policy, which is roughly $1,429 per year for similar properties.
FAIR Plan president Victoria Roach had previously indicated the necessity of a significant rate increase to help the insurer cover the costs associated with major wildfires. Since 2021, the number of FAIR Plan policyholders has more than doubled, reaching 591,000 this summer, a growth that has financially strained the program and its backing private insurers.
A FAIR Plan spokesperson stated that "Use of the rate guidelines prior to the Sustainable Insurance Strategy (SIS) would have resulted in the FAIR Plan seeking an 80% rate increase. The current 35.8% filing reflects the measured approach made possible under SIS, and the FAIR Plan appreciates Commissioner Ricardo Lara’s leadership in advancing SIS to help stabilize rates and broaden property insurance options.”
In 2021, the FAIR Plan sought a 48.8% increase but was granted a 15.7% rise, which took effect at the end of 2023. If the current request is approved, it will mark the first time the FAIR Plan has incorporated wildfire catastrophe models and reinsurance costs into its rate application—changes introduced under Insurance Commissioner Ricardo Lara’s SIS.
Other insurers have also sought rate increases under the new reforms. CSAA and Mercury Insurance, both among California’s top 10 insurers, have requested 6.9% increases. While industry observers anticipated that SIS reforms would lead to higher rates, the FAIR Plan contends that the reforms resulted in a lower requested increase than would have been sought under the previous system.
Previously, insurers were limited to using historical loss data and could not include reinsurance costs in their rate calculations. The new rules now permit the use of catastrophe models to assess wildfire risk, which proponents argue offers a more accurate reflection of current and future conditions.
Conversely, the state is exploring its own methods for assessing these risks, including the development of a public wildfire catastrophe model. SB 429 (Cortese), currently awaiting the governor’s action, proposes the creation of a Wildfire Safety and Risk Mitigation Program under the Department of Insurance, which would fund research to develop and implement such a model.
Grant Opportunities
Below is a list of the latest grant opportunities released by the state. All opportunities for local jurisdictions may be found here.
Deadline: 12/8/25 23:59
Title: Cannabis Equity Grants Program for Local Jurisdictions
State Agency / Department: Governor's Office of Business and Economic Development
Match Funding? No
Estimated Total Funding: $15,000,000
Funding Method: Advances & Reimbursement(s)
Deadline: 12/4/25 23:59
Title: Reusable Beverage Containers Infrastructure Grant Program (FY 2022-23)
State Agency / Department: Department of Resources Recycling and Recovery
Match Funding? No
Estimated Total Funding: $23,750,000
Funding Method: Advances & Reimbursement(s)
Deadline: 12/1/25 15:00
Title: 2025 CDBG NOFA
State Agency / Department: Department of Housing and Community Development
Match Funding? No
Estimated Total Funding: $27,000,000
Funding Method: Reimbursement(s)
Governor’s Press Releases
Below is a list of the governor’s press releases beginning October 1.
October 8: Governor Newsom signs data privacy bills to protect tech users
October 8: Governor Newsom announces $30 million in apprenticeship funding to fill high-demand jobs in health care, education, and technology
October 8: Governor Newsom statement on Palisades Fire arrest
October 7: Governor Newsom signs legislation 10.7.25
October 7: TOMORROW: Governor Newsom, joined by First Partner Siebel Newsom, to sign historic legislation improving kids’ health and nutrition across California
October 7: Governor Newsom proclaims Disability Employment Awareness Month
October 7: More parks for kids: California invests $38 million to boost outdoor opportunities for youth as Trump limits access
October 7: Governor Newsom signs bills further cracking down on hate and antisemitism in California schools
October 6: California partners with Belgium to boost business, strengthen economic ties
October 6: Governor Newsom issues legislative update 10.6.25
October 6: Governor Newsom signs new laws to help reduce costs for families
October 6: No more loud commercials: Governor Newsom signs SB 576
October 6: California celebrates National Coaches Day by revolutionizing youth sports with 25×25 Coaches Challenge
October 6: Governor Newsom celebrates Manufacturing Month, highlighting California’s dominant role in American manufacturing
October 5: California secures court victory, Trump cannot deploy California National Guard into Oregon
October 5: Governor Newsom to sue, urges Americans to speak out on Trump’s “breathtaking abuse of power” with cross-state Guard deployment
October 4: Governor Newsom issues statement on death of Chowchilla Police Officer
October 4: California Institution for Women celebrates first graduating class from Cal State LA
October 3: Governor Newsom issues legislative update 10.3.25
October 3: Governor Newsom signs landmark worker legislation, in stark contrast to Trump’s assault on workers and government shutdown
October 3: California adds largest graduating class of Highway Patrol officers in 16 years to its police force
October 3: Governor Newsom signs legislation to advance California’s position as the epicenter of global innovation
October 2: TOMORROW: Governor Newsom signs legislation advancing California’s dominance in global innovation
October 2:Governor Newsom announces appointments
- Craig Snellings, of Oakland, has been reappointed to the Workers’ Compensation Appeals Board
- Magda Menendez, of Bakersfield, has been appointed to the California Workforce Development Board
- Alysia Bell, of Redondo Beach, has been appointed to the California Workforce Development Board
- Rex Richardson, of Long Beach, has been appointed to the California Workforce Development Board
October 2: Governor Newsom: No state funding for sell-out universities
October 2: Health care costs for many Californians will nearly double in three months because of Donald Trump, Governor Newsom warns
October 2: Governor Newsom announces 99.8% compliance with emergency regulations, signs bill to permanently protect children from hemp products
October 2: Governor Newsom signs bill expanding fuel options to cut gas prices
October 2: Governor Newsom signs bills curbing billionaire influence on elections and protecting elections from interference
October 1: Governor Newsom issues legislative update 10.1.25
October 1: Governor Newsom statement on Trump administration’s decision to cut hydrogen hub funding
October 1: Trump’s shutdown leaves California disaster readiness in jeopardy
October 1: Governor, First Partner statement on the passing of Jane Goodall
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