The 2018-19 Budget

California Spending Plan (Final Version)

Chapter 1: Key Features of the 2018-19 Budget Package

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 between June and September 2018. These bills are detailed in Figure 7. The Governor did not veto any appropriations in the 2018‑19 Budget Act.