State Spending Plan
July 9, 2018

The 2018-19 Budget

California Spending Plan

(Preliminary Version)


Evolution of the Budget

January Budget Proposed Nearly $16 Billion in Total Reserves. The Governor’s 2018‑19 January budget proposed a total reserve level of $15.7 billion. In particular, the Governor proposed an optional deposit into the state’s rainy day fund to fill it to its constitutional maximum level. After fulfilling constitutional obligations for spending on schools and debt, the Governor also allocated about $1 billion in discretionary resources to other spending proposals, mostly one time in nature.

May Revision: Higher Revenues, More One-Time Spending. Relative to January, the administration had about $4 billion more in discretionary resources to allocate in the budget (largely reflecting higher revenues, which were partially offset by higher constitutional and caseload-driven spending). The Governor’s May Revision proposals dedicated most of these resources to new spending, virtually all for one-time purposes. These spending proposals focused on the areas of infrastructure, mental health, and homelessness. The Governor also proposed increasing reserves by more than $1 billion, resulting in a total proposed reserve level of $17 billion.

Final Budget Package Includes $15.9 Billion in Total Reserves. The Legislature passed the final budget package on June 14, 2018. Total reserves in the final budget package are lower than the proposed level in the May Revision, but roughly the same as the level proposed by the Governor in January. The budget package also reflects various choices that shifted spending priorities compared to the Governor’s proposal. In particular, the final budget package reduces payments for deferred maintenance by $700 million—relative to the Governor’s proposal—freeing up a like amount of funding. Correspondingly, the final budget package reflects higher General Fund spending for homeless grants and the universities, among others.

Budget Package Signed by Governor. The Governor signed the 2018‑19 Budget Act and 26 other budget related bills on June 27 and June 28, 2018. These bills are detailed in Figure 7. The Governor did not veto any appropriations in the 2018‑19 Budget Act.

Figure 7

Budget‑Related Legislation

Bill Number

Chapter

Subject

SB 840

29

2018‑19 Budget Act

AB 1808

32

Education

AB 1809

33

Higher Education

AB 1810

34

Health

AB 1811

35

Human Services

AB 1812

36

Public Safety

AB 1817

37

State Government

AB 1824

38

State Government

AB 1825

39

Local Control Funding Formula

AB 1826

40

State Capitol Building Annex

AB 1827

41

No Place Like Home Act of 2018

AB 1830

42

Reserve Accounts

AB 1831

43

State Government

AB 1834

44

Corrections

AB 1838

61

Local Government Taxation

SB 841

31

2017‑18 Budget Act: Augmentation

SB 847

45

Courts

SB 848

46

Transportation

SB 849

47

Medi‑Cal

SB 850

48

Housing

SB 852

49

State Bargaining Unit 6 Memorandum of Understanding

SB 853

50

Developmental Services

SB 854

51

Public Resources

SB 855

52

Taxation

SB 856

30

Amendments to the 2018‑19 Budget Act

SB 866

53

Employment

SB 871

54

Motion Picture Tax Credits