BOMA San Diego
Legislative Update
July 2026
 
STATE
 
CALIFORNIA ADOPTS $351.7 BILLION STATE BUDGET
The California State legislature adopted and Governor Gavin Newsom signed a $351.7 billion dollar budget. According to the Governor’s statement, it’s a “spending plan that eliminates deficits, preserves $28.8 billion in reserves, and protects essential healthcare and social services.” Here’s how it breaks down:

• Total Spending: Across the General Fund, special funds, and select bond funds, the budget authorizes $351.7 billion in state spending.
• Deficit Elimination: The plan balances the state budget for two fiscal years, arguably achieving a structural deficit of zero.
• Education: Guarantees record Proposition 98 funding, providing per-pupil spending of $21,148 and increasing the Local Control Funding Formula by $2.2 billion.
• Healthcare & Safety Nets: Delays or softens proposed cuts to low-income healthcare, including delaying the reduction of some dental benefits and Medi-Cal clinic reimbursements until July 2027.
• Housing & Homelessness: Directs $900 million to Homeless Housing, Assistance, and Prevention (HHAP) grants and includes an $11.25 billion affordable housing bond for the November ballot.
• Corporate Accountability: Requires California's next governor to develop options to reduce taxpayer subsidies for corporations whose workers rely on state-sponsored Medi-Cal healthcare rather than company health plans.

 
To learn more, please click HERE.
 
CEQA REFORM MEASURE QUALIFIES FOR NOVEMBER BALLOT
A long-anticipated CEQA reform measure, the “Building an Affordable California Act,” has officially qualified for the November ballot. Backed by the California Chamber of Commerce, the measure would impose firm timelines on environmental review (requiring agency sign-off within one year of a completed application), cap public comment periods, and limit courts’ ability to overturn project approvals. Projects deemed essential, including housing, water infrastructure, roads, and energy, would be streamlined. The measure is viewed as a significant opportunity to reduce one of the biggest cost and timeline drivers for commercial and industrial development in California. To learn more, click HERE.
 
SO-CALLED “BILLIONAIRE TAX” QUALIFIES FOR NOVEMBER BALLOT
A proposed one-time 5% tax on California billionaires, backed by SEIU, has collected enough signatures to qualify for the November ballot. Proponents project it would raise roughly $100 billion to offset federal funding cuts. Governor Newsom opposes the measure, warning it could drive high-net-worth individuals and businesses out of state. To learn more, click HERE.
 
LOCAL
 
CITY OF SAN DIEGO
 
CITY PROPOSES STEEP INCREASE TO MINIMUM WAGE ENFORCEMENT FEES
The City of San Diego is proposing to nearly double its minimum wage user fee, from $1.47 to $2.47 per employee (an 86% increase), to fund enforcement staff. The proposal, which came with no advance outreach to the business community, also includes a new $38.85 per-permit fee for traffic control worker minimum wage enforcement, a Compliance Usage Fee up to $4,853.24 per covered contract, and a new flat $2,131.31 fee per covered payor to enforce the Hospitality Minimum Wage Ordinance. Following pushback from the business community, the item was pulled from the Budget and Government Efficiency Committee agenda, this month, and is expected to return in September.
 
PLANNING DEPARTMENT FEE INCREASES TOOK EFFECT JULY 1
The Planning Department’s new Development Impact Fees for Facilities Benefit Assessment communities, along with updated Regional Transportation Congestion Improvement Program fees, went into effect July 1. To view the updated fee schedule, click HERE.
 
‘JUNK FEE’ RENTAL ORDINANCE DISCUSSED BY COUNCIL; DECISION STILL PENDING
The San Diego City Council discussed a proposed “Residential Rental Price Gouging, Fee Exploitation, and Cost Transparency” ordinance from Councilmember Sean Elo-Rivera. Industry coalition members, including those representing the rental housing sector, testified in opposition, raising concerns that the fee caps don’t reflect actual costs, that banning pet fees shifts risk onto owners beyond what security deposits cover, and that mandated acceptance of tenant-provided screening reports creates fraud risk. Tenant groups spoke in support. While no action was taken, there appeared to be council consensus on the ordinance’s transparency provisions, but a mixed reaction to the proposed fee caps and bans. Further action is expected later this year, likely after the County considers a similar proposal.
 
HOSPITALITY & EVENT WORKER MINIMUM WAGE INCREASE TOOK EFFECT JULY 1
The first phased increase under the City’s hospitality and event worker minimum wage ordinance took effect July 1, raising the rate from $17.25/hour to $21.06/hour for workers at qualifying event facilities and to $19.00/hour for workers at qualifying hotels (150+ rooms). To learn more, click HERE.
 
TOT AND CHARTER REFORM BALLOT MEASURES STALL, WON’T APPEAR IN NOVEMBER
With the committee deadline having passed, the City Council elected not to advance two high-profile potential ballot measures: a rumored 2% transient occupancy tax increase (which stalled after a similar Los Angeles measure failed) and a charter reform measure that would have limited mayoral power and reinstated a chief operating officer position (defeated 2-3). Separately, measures barring lobbyist contributions to candidates and preserving free beach-area parking may still move forward as ordinances, which would not require voter approval. Expect a renewed push on TOT and/or a sales tax measure in 2028 as the City’s revenue challenges continue.
 
REGIONAL
 
NATIONAL CITY DELAYS ACTION ON GROSS RECEIPTS TAX
The National City Council delayed action on a proposal from Councilmember Jose Rodriguez to convert the city’s flat business license tax into a percentage-based gross receipts tax that would apply to all businesses, including rental housing, retail, and hotels. The current tax raises about $700,000 annually. The proposed gross receipts scheme would raise more than $7 million. A broad business coalition is opposing the measure being placed on the ballot, with a City Council workshop scheduled for July 21. Council has until August 7^th to place the measure on the ballot. You can view the City’s tax study HERE.
 
SAN DIEGO COUNTY WATER AUTHORITY APPROVES 3% RATE INCREASE
The Water Authority approved a 3% wholesale water rate increase effective January, well below recent increases of 8.3%, 14%, and 9.5%. The smaller increase reflects new water-sharing agreements with two Riverside County agencies and a settlement with the Metropolitan Water District of Southern California. To learn more, click HERE.
 
MTS BOARD TO CONSIDER 30% FARE INCREASE
The Metropolitan Transit System Board is expected to vote July 17 on a potential 30% fare increase phased in over two years, raising one-way fares from $2.50 to $3.00 this fall and to $3.25 by fall 2027. It remains unclear how the increase would affect riders receiving CalFresh, CalWORKs, or Medi-Cal benefits, whose fares were previously frozen. To learn more, click HERE.
 
CHULA VISTA TO VOTE ON CHARTER REFORM MEASURE
The Chula Vista City Council is set to vote on placing a charter reform measure on the November ballot this month. Though no ballot language has been posted, discussions with the City indicate the measure would convert the currently part-time Mayor and Council positions to full time, extend terms by an additional four years, and potentially raise elected officials’ salaries. To learn more, click HERE.
 
CHULA VISTA EXPLORING POTENTIAL TOT INCREASE
Chula Vista was also set to consider placing a still-undetermined Transient Occupancy Tax increase on the November ballot, but following business community opposition, the item was tabled until later in July. Chula Vista currently levies a 10% citywide TOT, with the Gaylord Pacific paying an additional 5.5% special levy tied to financing its resort convention center. To learn more, click HERE.