LEGISLATION COMMITTEE
Meeting Date: July 28, 2025
Subject: Major Impacts from Federal Reconciliation and the State Budget
Submitted For: Legislation Committee
Department: County Administrator's Office
Presenter: E. Struthers
Contact: (925) 655-2045
Referral History:
The Legislation Committee monitors and provides direction on federal and state budgetary, legislative, and regulatory matters of interest to the County. With the recent adoption of the State Budget and the enactment of the federal budget reconciliation bill, County staff are working to analyze fiscal and operational impacts to the County and those we serve.
Referral Update:
On July 4, 2025 President Trump signed the 2025 federal reconciliation bill, also known as H.R. 1 or the "One Big Beautiful Bill Act." H.R. 1 makes significant changes to federal expenditures (i.e. services and programs) and revenues (i.e. taxes) over the next ten years. The bill will have major ramifications for state and county budgets, particularly in California. Many provisions phase in, or out, over several years.
Many of the potential benefits to the American people are front-loaded within the ten-year window, meaning that they take effect immediately (during the 2025 tax year) and will expire before the ten-year window elapses. For example, the annual state and local tax (SALT) tax deduction cap will temporarily increase from $10,000 to $40,000, which is anticipated to have benefits for middle and high income homeowners. However, this increase is will revert to $10,000 after just four years. At the same time, many of the bill's harms phase in over time.
Some of the most potentially harmful federal policies that will take effect between 2026 to 2028 include:
* Limits on Medicaid State-Directed Payments
* Medicaid (Community Engagement) Work Requirements
* SNAP benefit cost sharing begins: 15% match expected for California
* Medicaid cost sharing begins for expansion population
* SNAP Administrative Cost Shift
* Pro...
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