State budgets

As the budget reconciliation lurches through Congress towards a vote, the cap on state and local taxes remains a key bargaining chip while data shows state tax revenue declining and an uncertain future for the pass-through-entity workarounds adopted by more than 30 states.

Lawmakers have $755 million less to spend and only six more weeks to work on the two-year budget.

The rating agency, which gave the state a positive outlook a year ago, upgraded its general obligation rating a notch to AA-plus ahead of a $25 million bond sale.

California Gov. Gavin Newsom said lowered revenues from the so-called "Trump slump" forced tough choices during annual May revisions to his budget.

The agreement includes $12.6 billion in spending for the fiscal year that begins July 1 and an income tax cut estimated to cost $160 million.

The state's legislative analyst's office expects revenues for the fiscal 2025-26 budget year to be $7.8 billion lower than estimated in January.

Amid deep cuts to public K-12 schools, the proposed budget would boost charter school investment as the administration said "more local school options are needed."

With a funding agreement in the state budget, the Metropolitan Transportation Authority is gearing up to start capital repairs — and find $3 billion of savings. 

Lawmakers are putting the final touches on the budget, and Gov. Kathy Hochul said there is broad agreement. Federal cuts may yet scramble everything.

Pew Charitable Trust outlined how governments can better prepare for natural disasters to alleviate budget pressures as these incidents have grown in frequency and severity.