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January 13, 2022 - On January 10, 2022, Governor Newsom presented his proposed state budget to the Legislature. In this report, we provide a brief summary of the proposed budget based on our initial review. In the coming weeks, we will analyze the plan in more detail and release several additional budget analyses.
November 17, 2021 - This post describes our fiscal outlook for Medi‑Cal, the major factors that we expect to drive changes in General Fund spending in Medi Cal, and a number of our key underlying assumptions. (Specifically, this post concerns projections of Medi‑Cal local assistance spending within the Department of Health Care Services [DHCS].)
November 17, 2021 - Each year, the state calculates a “minimum guarantee” for school and community college funding based upon a set of formulas established by Proposition 98 (1988). Based upon revenue projections that are significantly above the June 2021 estimates, we estimate the guarantee in 2022‑23 is $11.6 billion (12.4 percent) above the 2021‑22 enacted budget level. After accounting for various adjustments—backing out one‑time expenditures, funding a 5.35 percent cost‑of‑living adjustment, and making required reserve deposits—we estimate that $9.5 billion is available for new commitments. In addition, we estimate that $10.2 billion in one‑time funding is available due to increases in the guarantee in 2020‑21 and 2021‑22. In total, we estimate nearly $20 billion is available to allocate in the upcoming budget cycle. To help the Legislature prepare to allocate this funding, we outline several options that would build upon existing programs, expand services in targeted ways, and address future costs and uncertainties.
November 17, 2021 - Our annual Fiscal Outlook publication gives our office’s independent assessment of the California state budget condition for the upcoming fiscal year and over the longer term. In this report, we anticipate the state will have a $31 billion surplus to allocate in the upcoming fiscal year and operating surpluses ranging from $3 billion to $8 billion over the multiyear period. We also find the state will need to allocate about $14 billion to meet the constitutional requirements of the State Appropriation's Limit (SAL) across 2020-21 and 2021-22.
October 27, 2021 - Each year, our office publishes the California Spending Plan to summarize the annual state budget. This publication provides an overview of the 2021-22 Budget Act, then highlights major features of the budget approved by the Legislature and signed by the Governor.
September 28, 2021 - The Supplemental Report of the 2021-22 Budget Act contains statements of legislative intent that were adopted during deliberations on the 2021-22 budget package.
September 23, 2021 - This post discusses features of the state's spending plan that were not covered elsewhere in the 2021-22 Spending Plan series.
August 30, 2021 - This post describes the legislative and administrative decisions regarding the State Appropriations Limit (SAL) in the 2021‑22 budget process.
August 24, 2021 - Each year, our office publishes California Spending Plan, a series of publications that summarize the annual state budget. The Overview of the California Spending Plan is presented here along with short online posts that focus on major areas and features of the 2021-22 budget package. As more of these posts become available, we will add them below.
June 14, 2021 - Presented to: Senate Budget and Fiscal Review Committee Hon. Nancy Skinner, Chair
May 27, 2021 - Our office recently released its multiyear budget outlook based on our evaluation of the Governor’s May Revision budget proposal. An important element of this annual exercise is our independent estimate of the total cost of the Governor’s May Revision budget proposals for several years into the future. A key finding from our analysis this year is that the Governor’s ongoing spending proposals are probably too high relative to his administration’s revenue projections. This manifests in operating deficits that persist through the outlook horizon (2024‑25). Adopting a budget with this combination of assumptions is inadvisable in our view. One reason is that—given the state’s balanced-budget requirement—doing so requires assuming that the multiyear budget projections are wrong. To appreciate why this is problematic, it is useful to revisit some of the reasons for doing multiyear fiscal forecasting in the first place.
May 23, 2021 - This report presents our office’s independent assessment of the condition of the state General Fund budget through 2024-25 assuming the economy continues to grow. While the state faces a historic surplus, a spending level beyond what is proposed by the Governor would require the Legislature to identify proposals to reject. Moreover, our analysis finds that the level of ongoing spending proposed by the Governor is only supportable with a revenue forecast that is more optimistic than the administration’s current estimates.
May 17, 2021 - On May 14, 2021, Governor Newsom presented a revised state budget proposal to the Legislature. (This annual proposed revised budget is called the “May Revision.”) In this post, we provide a summary of the Governor’s revised budget, focusing on the overall condition and structure of the state General Fund—the budget’s main operating account. In the coming days, we will analyze the plan in more detail and provide additional comments in hearing testimony and online.
May 4, 2021 - In the coming months, the Legislature will face important decisions over how to use California’s share of the state fiscal recovery funds included in the American Rescue Plan (ARP). Estimated at approximately $26 billion, the recovery funds should go a long way toward covering the state’s direct and indirect costs arising from the coronavirus disease 2019 (COVID-19) pandemic. Moreover, beyond a relatively broad set of pandemic-related parameters, the ARP likely provides states with considerable flexibility over how to allocate the funds, presenting the Legislature with a unique opportunity. In this post, we lay out some guiding principles for the Legislature to consider as it formulates a plan for using the fiscal recovery funds.
April 26, 2021 - This post provides an overview of the Governor’s proposals related to Proposition 2 (2014). We provide background on how the measure works, and then summarize and comment on the Governor’s Proposition 2 reserve and debt payment proposals.