Governor Jerry Brown released the May Revision of the California state budget, and he had mostly positive news to share. The biggest news from the new estimates is a $6.7 billion increase in General fund revenues. Given this increase, the Governor proposes new spending for three purposes:
- Extending full-scope Medi-Cal coverage (as well as In-Home Supportive Services and Cash Assistance Payments for Immigrants) to state residents who gain Permanent Residence Under Color of Law (PRUCOL) status under President Obama’s executive actions to expand the Deferred Action for Childhood Arrivals (DACA) program and to establish the Deferred Action for Parents of Americans and Lawful Permanent Residents (DAPA) program, at an annual cost of $200 million ($62 million for 2015-16) and an additional $5 million dedicated to application assistance for these groups
- Creating the state’s first-ever California Earned Income Tax Credit, a refundable tax credit for the state’s lowest income workers (earning up to $6,580 for households with no dependents, and up to $13,870 for households with three or more dependents) that would assist 2 million residents with an average household benefit of $460 and a maximum of $2,653
- Holding tuition flat for California State University and University of California undergraduates for two more years.
Proposition 98 requires that $5.5 billion of the overall increase in revenue go to K-12 education and community college spending. Further, Proposition 2 requires that an additional $633 million go to the Rainy Day Fund, which will reach $3.5 billion by the year’s end, and $633 million go to debt repayments. The May Revision also includes $2.2 billion in one-time spending for the state’s emergency drought response, which includes protecting and expanding local water supplies and conservation efforts.
Specifically regarding the Health and Human Services Agency, the overall funding in the May Revision was $140.5 billion ($31.6 billion in General Fund and $108.9 billion in federal and other funds), which represents a $121 million reduction from the Governor’s Budget released in January. The most notable adjustments in spending for the Department of Health Care Services were a savings of $381 million from federal reauthorization of the Children’s Health Insurance Program (CHIP), as well as an additional $61.6 million in federal and non-state spending for payments to health plans to create Health Homes for Medi-Cal beneficiaries with complex needs.
The May Revision highlights that more than 5 million Californians have enrolled in health coverage through Medi-Cal or Covered California since January 2014, the beginning of enrollment into these Affordable Care Act (ACA) coverage expansions. Medi-Cal enrollment is estimated to reach 12.4 million in 2015-16. Spending for increased enrollment of residents previously eligible for the program is expected to be $2.9 billion ($1.4 billion General Fund), and spending for the for the newly eligible is estimated to be $14 billion, which is 100% federally funded through 2015-16. The General Fund share of spending for the newly eligible group is estimated to reach $1 billion in 2018-19.
Other noteworthy provisions include $125 million in General Fund for Medi-Cal managed care rate increases and an increase of $150 million ($48.8 million General Fund) for the eligibility determination workload at the state and county levels for ACA coverage expansion programs.
Finally, on a humorous note, the final question of Governor Brown’s press conference this morning pressed him about one thing in his career that he’d like to take back or do over again. Brown quipped, “The only thing that seems pretty clear was continuing to run for president in 1980 after Kennedy got in against Carter. That was a very dumb move.”
Peruse the full budget summary here.