LAO Contacts

  • Helen Kerstein
  • Emergency Services, Cannabis Regulation, Infrastructure, General Services, Consumer Affairs, Military, ABC, Arts Council, Treasurer's Office

October 17, 2019

The 2019‑20 Budget: California Spending Plan

Other Provisions

Statewide Infrastructure

Deferred Maintenance. The budget includes one-time funding totaling $524.6 million to address backlogs of deferred maintenance at various facilities as shown in Figure 1. Of the total, $482.5 million is from non-Proposition 98 General Fund. This supports 22 state entities, with about 80 percent allocated to the University of California and California State University. The budget also includes $13.5 million from prior-years’ Proposition 98 funds for the California Community Colleges. The remaining $28.6 million is from Proposition 68 (2018) for the deferred maintenance needs at the Department of Parks and Recreation, Department of Fish and Wildlife, and Network of State Fairs. We discuss the allocations for various specific departments in the “Education,” “Transportation,” “Judiciary and Criminal Justice,” and “Natural Resources and Environmental Protection” spending plan posts.

Figure 1

Deferred Maintenance Allocations

(In Millions)



General Fund (Non‑Proposition 98)

California State University


University of California


Corrections and Rehabilitation


Judicial Branch


State Hospitals


Parks and Recreation


General Services


Forestry and Fire Protection


Developmental Services


Military Department


Highway Patrol


Veterans Affairs


State Special Schools


Food and Agriculture


Housing and Community Development


Motor Vehicles


Exposition Park


Employment Development


Office of Emergency Services


Conservation Corps


Hastings College of the Law


Tahoe Conservancy


Subtotal, Non‑Proposition 98 General Fund


Prior Years’ Proposition 98

Community Colleges


Subtotal, Proposition 98


Proposition 68

Parks and Recreation


Fish and Wildlife


Network of California Fairs


Subtotal, Proposition 68




aFunds can also be spent on on‑campus childcare facilities.

bThe budget also includes additional funding for specific roof and fire alarm replacements.

cFunds can also be spent on projects that increase tourism and visitor experiences.

Debt Service. The budget provides $8.1 billion from various funds for debt service payments in 2019‑20. This represents an increase of 1 percent from 2018‑19. This total includes $7.1 billion for general obligation bonds ($4.7 billion from the General Fund) and $1 billion for lease revenue bonds ($651 million from the General Fund).

Department of General Services (DGS)

The budget provides DGS with $2.2 billion from various sources. This is a net increase of $629 million, or 39 percent, compared to the estimated spending level for 2018‑19. This increase primarily reflects over $1 billion in one-time lease revenue bond funding approved in 2019‑20 to construct the Richards Boulevard Office Building Complex, as described below.

Sacramento Office Building Projects. The budget includes funding from lease revenue bonds and the General Fund for three state office building projects and a parking garage project in the Sacramento area, as follows:

  • New Richards Boulevard Office Building Complex ($1 Billion). The budget provides lease revenue bond funds for the design-build phase of a project to construct a building complex with a total of 1 million net usable square feet at the former site of the State Printing Plant. The project is expected to be completed by March 2024.
  • State Printing Plant Demolition ($21.5 Million). The budget provides General Fund support for the demolition of the existing State Printing Plant buildings and other associated structures.
  • Resources Building Renovation ($8.9 Million). The budget provides General Fund support for the initial planning phase—known as the performance criteria—for the renovation of the Resources Building, a roughly 520,000 net useable square feet building. The total cost of the project is estimated at $375.9 million and is expected to be completed by May 2024.
  • R Street Parking Structure ($11.1 Million). The budget provides $11.1 million for the R Street Parking Structure, including $354,000 from the Service Revolving Fund for acquisition and $10.7 million from the General Fund for construction. (The 2017‑18 Budget Act provided authority to finance the construction of the project, as well as an initial appropriation of $1.7 million from the Service Revolving Fund to fund acquisition.)

Disposal of Developmental Center (DC) Properties. The budget includes $23.3 million from the General Fund in 2019‑20 to support the disposal of two DC properties. First, for the Sonoma DC—whose final residents moved out in 2018—the budget includes $21.1 million from the General Fund in 2019‑20 (and a total of $43.7 million over three years) to support various activities related to the disposal and potential reuse of the Sonoma DC property. During this three-year period, the County of Sonoma will conduct land use planning activities that will inform DGS’s final disposal of the property. Second, the budget includes $2.2 million from the General Fund in 2019‑20 to perform a site assessment of the Fairview DC—whose final residents will move out in 2019—to support the future disposal of the property.

Employee Compensation

State Has Active Labor Agreements With Most State Employees. In 2019, the Legislature ratified new labor agreements with 14 of the state’s 21 bargaining units. In 2019-20, only one bargaining unit (Unit 18, representing psychiatric technicians) has an expired agreement. The agreements with seven bargaining units (Units 2, 6, 9, 10, 12, 16, and 19) are scheduled to expire at the end of 2019-20. Pursuant to the state’s labor agreements, the 2019-20 budget assumes that most state employees receive a pay increase in 2019-20 of about 3.5 percent. In addition, the budget assumes that the average state health premiums used to determine the state’s contributions for employee health benefits will grow 5 percent in 2020. The budget assumes that the state’s employee compensation costs to pay for salaries, health premiums, and other provisions of labor agreements will increase by $1.3 billion ($644 million from the General Fund) in 2019-20.

Pay-as-You-Go Retiree Health Costs. Under the state’s current policy to pay for retiree health benefits, (1) the state and employees each contribute an amount of money—established as a percentage of pay through the collective bargaining process—to prefund the benefits employees earn today and (2) the state pays the costs of the benefit for current retirees on a pay-as-you-go basis. Due to increases in health premiums and the number of retirees receiving the benefit, the state’s pay-as-you-go costs for this benefit increase each year. The budget assumes that the state’s pay-as-you-go costs in 2019-20 will be $2.2 billion General Fund.

Pension Contribution Growth. The California Public Employees’ Retirement System (CalPERS) board establishes the state’s contribution rates—as a percentage of pay—to fund employee pension benefits. These rates have increased in recent years due to a combination of new actuarial assumptions adopted by the CalPERS board and lower-than-assumed investment returns. The state’s total contribution to CalPERS in 2019-20 is expected to be $6.8 billion—$3.9 billion paid from the General Fund. (In another section, we discuss the state’s supplemental pension payments to CalPERS.)

Voting Equipment

$87.3 Million General Fund to Replace County Voting Systems. The budget provides one-time funding of $87.3 million to counties for the research and development, purchase, or lease of hardware and software to replace county voting systems and technology, and county election management systems. This money supplements $134.4 million General Fund provided for this purpose in the 2018-19 budget. The total funds $221.7 million will be granted to counties on a 75/25 state/county match basis.

Labor Programs

Lengthens State’s Paid Family Leave Benefit by Two Weeks. California’s paid family leave program provides up to 70 percent wage replacement to workers who take time off to bond with a new child or care for an ill family member. The 2019-20 budget agreement expands the duration of paid family leave from a maximum of six weeks to a maximum of eight weeks. In addition to lengthening the duration of leave, the spending plan also reduces the reserve requirement for the Disability Fund, which collects payroll taxes and pays disability and paid family leave benefits, from 45 percent of disbursements to 30 percent of disbursements. Reducing the reserve requirement has the one-time effect of requiring somewhat fewer payroll taxes to fund the increased duration of paid family leave than would otherwise be needed. Budget-related legislation (Chapter 24, Statutes of 2019 (SB 83, Committee on Budget and Fiscal Review)) also instructs the administration to develop a proposal, by 2021-22, to (1) increase the duration of paid family leave to six months, meaning 12 weeks for each parent or caregiver, and (2) increase the wage replacement rate from 70 percent to 90 percent. The proposal is to be presented to the Legislature by November 2019.

Establishes Future of Work Commission, Increases Positions at Labor Agency, and Commences Reorganization of Labor Departments. The 2019-20 spending plan includes $2.5 million General Fund to support a newly established Future of Work Commission and to create nine new positions at the Labor and Workforce Development Agency. The Future of Work Commission, established by executive order on May 1, 2019, will “evaluate the state’s economy to understand and forecast how technological and economic developments will impact workers, workforce needs, [and] regional economics and industries.” It is unclear when the commission will present its final recommendations, but a progress report is to be submitted to the Legislature in 2020. Of the new positions established in the 2019-20 spending plan, three are to support the Future of Work Commission and six are to commence a reorganization of the state’s employment and workforce development activities within the Employment Development Department, the California Workforce Development Board, the Employment Training Panel, and the Department of Industrial Relations (DIR)—with the goal of improving services delivery across the programs. These elements of the spending plan were proposed as part of the Governor’s May Revision.

New Positions to Review Special Workers’ Compensation Claims. The DIR oversees the state’s workers’ compensation system, which compensates individuals for work-related injuries and covers the costs for treatment of those injuries. An individual who becomes injured (and receives workers’ compensation benefits for that injury) may later return to work. In some of these cases, the individual suffers a subsequent injury later in their career. When this occurs, workers’ compensation benefits related to the subsequent injury may also take into account pre-existing disability levels related to the previous injury. When an individual with an existing injury files a workers’ compensation claim, the portion of the claim benefit associated with the existing injury is paid for by a state fund, the Subsequent Injury Benefit Trust Fund (SIBTF), instead of by the employer’s workers’ compensation insurance company. (The purpose of the SIBTF is to assume the financial liability from the prior injury that employers would otherwise face when hiring a previously injured individual.) Following a series of workers’ compensation reforms in 2004 and 2012, the number of new subsequent injury workers’ compensation claims has roughly doubled and the benefit payments increased from $20.9 million in 2010-11 to $67.4 million in 2017-18. To address this increased workload, the 2019-20 spending plan includes $4.8 million special funds and 30 positions (and $2 million and 14 positions ongoing) for DIR to review new claims. The 2019-20 Governor’s Budget also included related trailer bill language that would have had the effect of reducing the number of subsequent injury benefit claims and payments. Ultimately, this language was not included as part of the final budget agreement.

New Positions to Review Private Attorneys General Act. Under state law, employers who violate the state’s labor laws—such as the laws governing minimum wage, rest and meal breaks, and overtime pay—are legally liable to repay unpaid wages and pay associated penalties. Through standard litigation, employees sue their employer to recover unpaid wages but are not eligible to recover the associated penalties. The state’s Private Attorneys General Act (PAGA), however, allows employees to also collect a share of penalties associated with labor law violations. Prior to PAGA, penalties associated with labor law violations could only be imposed as a result of a state-led investigation conducted by the Labor Commissioner. The intent of PAGA is to improve enforcement of the state’s labor laws by offering an alternative to state-led enforcement that could be used, for example, when the state lacks the resources to enforce all alleged labor law violations. Before a PAGA lawsuit may proceed, plaintiffs must file a notice with the state’s Labor Commissioner. At that point, the state reviews the claim and may choose to investigate the claims itself. (When the Labor Commissioner chooses to investigate the claim, the private litigation may not proceed.) Due to budgetary constraints, the state has typically investigated fewer than 1 percent of PAGA notices. When private PAGA lawsuits go forward and a settlement is reached between the parties, state law requires the Superior Court to approve the proposed settlement and to submit the settlement to the Labor Commissioner’s Office.

The 2019-20 spending plan includes a May Revision proposal to provide $2 million special funds and 12 positions to allow the Labor Commissioner’s Office to investigate additional PAGA notices. With these additional resources, the Labor Commissioner’s Office will also review additional proposed settlements that result from private PAGA litigation. (A similar but somewhat smaller amount would be available ongoing for these purposes.) These resources would be in addition to a similar augmentation that was approved as part of the 2016-17 budget.

One-Time Outreach Funding for Domestic Workers and Their Employers. Budget-related legislation adopted as part of the 2019-20 spending plan provides $5 million one-time General Fund to the Labor Commissioner’s Office (within DIR) to fund a three-year outreach effort. The goals of the outreach effort are to (1) improve labor law compliance among individuals and families who employ domestic workers in their home and (2) increase domestic workers’ awareness of their employment protections under state law and how to recover unpaid wages from their employer if labor law violations occur.

Information Technology

Financial Information System for California (FI$Cal)

An Integrated Financial Management System. For the last several years, the administration has been engaged in the design, development, and implementation of the FI$Cal project. This information technology (IT) project will replace the state’s aging and decentralized IT financial systems with a new system that integrates state government processes in the areas of accounting, budgeting, cash management, and procurement. Since the project began, it has changed considerably in cost, schedule, and scope from what was initially anticipated. These changes have been documented in special project reports (SPRs). In August 2019, the California Department of Technology (CDT) approved the eighth SPR for FI$Cal.

Funding Over Three Years to Help Departments Close Financial Statements in FI$Cal. Several departments continue to struggle to close their financial statements on time using FI$Cal, including a large group of departments that implemented FI$Cal in July 2018 and are closing their financial statements in the system for the first time. The 2019-20 spending plan includes $58.1 million total funds ($33.1 million General Fund) over three fiscal years—$31 million total funds ($17.7 million General Fund) in 2019-20—for the Department of FI$Cal to help departments close their financial statements. (An additional $6 million total funds is included in the 2019-20 spending plan for FI$Cal project-related activities.) The budget also includes legislation that requires the Department of FI$Cal to report on or before October 31 of each year, beginning in 2020, the date on which state departments and agencies submit their month-end and year-end reports to the State Controller’s Office. (The legislation also includes additional reporting requirements related to the Integrated Solution, the system integrator contract, and the training of agencies and departments using FI$Cal.)

Office of Digital Innovation (ODI)

New Office Within Government Operations Agency (GovOps). The 2019-20 spending plan includes $26.2 million total funds ($23.7 million General Fund) and 50 positions to create a new office, ODI, within GovOps. The budget also includes legislation that outlines the mission, activities, structure, and funding of ODI. The mission of the office is to deliver better government services to state residents through technology and design. To achieve this mission, ODI’s activities include (but are not limited to):

  • Projects with state agencies and departments to evaluate and improve the delivery of government services.
  • Publication of new and/or updated state policies, procedures, and standards on the delivery of government services.
  • Training state executives, managers, supervisors, and other staff in leadership positions on best practices in the delivery of government services.
  • Other activities related to the delivery of government services including (1) the consideration of changes to how the state procures technology, and (2) the evaluation of possible common platforms, services, and tools for state agencies and departments to use in the delivery of government services.

Innovation Fund of $10 Million for ODI Projects in 2019-20. Of the $26.2 million total funds provided for ODI in 2019-20, the Legislature approved $10 million (General Fund) for an “innovation fund” ODI can use for projects with state agencies and departments. Budget-related legislation also establishes a Digital Innovation Services Revolving Fund (the “revolving fund”) within the State Treasury on July 1, 2020. Any remaining monies from the innovation fund approved in 2019-20 will be deposited into the revolving fund once the revolving fund is established. The revolving fund can also receive legislative appropriations; donations, endowments, or grants of funds from private or public sources; and payments from state agencies and departments for services provided by ODI. On and after July 1, 2024, any moneys remaining in the revolving fund will be available for appropriation by the Legislature.

Aligning the State’s IT Project Approval Process With Its Annual Budget Process

State’s IT Project Approval Process Does Not Always Align With Budget Cycle. To improve the planning quality of IT project proposals, CDT fully implemented a new project approval process—the Project Approval Lifecycle (PAL)—in 2016. PAL is intended to give the administration and Legislature a better understanding, and more confidence in, the project cost and schedule prior to approving funding for the project through the annual budget process. One emerging trade-off of PAL, however, is that it does not always align with the annual budget process. Because PAL requires more work upfront to complete, it generally takes longer for agencies and departments to complete than the state’s former IT project approval process. If an agency or department anticipates that the development and implementation of an IT project could start in the same fiscal year as the project completes PAL, an agency or department could ask for funding before the project is approved by CDT.

Legislature Approved Budget Bill Language Requiring Written Notification Before Authorizing Expenditures on IT Projects in PAL. In response to a number of funding requests agencies and departments submitted to develop and implement IT projects before completing PAL, the Legislature approved (for projects it agreed to fund) budget bill language that requires written notification of the Legislature once a project is approved. In some cases, agencies or departments are not authorized to make expenditures on the development and implementation of a project until 30 calendar days after written notification of the Legislature. Figure 2 provides a list of the IT project proposals for which PAL-related budget bill language was approved by the Legislature.

Figure 2

Information Technology Project Proposals With PAL‑Related Budget Bill Language

Agency or Department

IT Project Proposal

Oversight Language

California Health and Human Services Agency, Office of Systems Integration

Medi‑Cal Eligibility Data Systems Modernization

Written notification of Legislature with total project cost and schedule at least 30 calendar days before expenditure of some project funds.

Department of Toxic Substances Control

Cost Recovery Management System

Written notification of Legislature with total project cost and schedule at least 30 calendar days before expenditure of any project funds.

Department of Public Health

Surveillance, Health, Intervention, and Environmental Lead Database

Written notification of Legislature with total project cost and schedule at least 30 calendar days before expenditure of any project funds.

Department of Developmental Services

Reimbursement System Project

Include estimated cost, schedule, and scope of the project in the Governor’s 2020‑21 budget.

Department of Social Services

Intensifying LPA Field Time with Data (Part 1: Protecting history: Data Migration for Legacy Systems)

(1) Written notification of Legislature with total amount of contract(s) in 2019‑20 and subsequent fiscal years within 30 calendar days of the contract award(s). (2) Include difference between budgeted and contract amount(s) in the Governor’s 2020‑21 budget.

PAL = Project Approval Lifecycle; IT = Information Technology; and LPA = Licensing Program Analyst.

Office of Emergency Services (OES)

The budget provides OES with $1.7 billion (about two-thirds from federal funds) in 2019‑20. This is a net increase of $223 million, or about 15 percent, compared to the estimated spending level for 2018‑19. We describe some of the major augmentations below.

Emergency and Disaster-Related Proposals. The budget provides OES with augmentations in 2019‑20 from various state funds to support emergency and disaster-related activities, including the following:

  • Power Shutdown ($75 Million). The budget provides $75 million General Fund on a one-time basis to plan for and mitigate the effects of investor-owned utility-led power shutdowns implemented to reduce the risk of wildfires sparked by utility-owned equipment.
  • 9‑1‑1 System ($51 Million). The budget provides $50 million General Fund on a one-time basis to address the structural imbalance in the State Emergency Telephone Number Account (SETNA). The budget also provides $1 million from SETNA to support the implementation and ongoing workload associated with emergency communications coordination and First Responder Network Authority broadband network services. Finally, the budget package includes trailer bill language to modify and increase the charge to address the SETNA structural imbalance and support an upgrade of the 9‑1‑1 system.
  • Public Safety Radios ($10.8 Million). The budget provides $10.8 million from the General Fund in 2019‑20 ($59.5 million General Fund over five years) to develop and implement an upgraded statewide public safety radio system.
  • California Disaster Assistance Act ($28.8 Million). The budget provides $28.8 million General Fund on a one-time basis for the California Disaster Assistance Act to repair, restore, or replace publicly owned property damaged or destroyed by a disaster.
  • State Disaster Preparedness and Response ($26.6 Million). The budget provides $26.6 million from the General Fund in 2019‑20 to support various disaster and emergency-related purposes. Of this amount, $20 million is provided on a one-time basis to create a mission tasking fund to provide funding to state agencies that have been tasked by OES to perform response and recovery activities for declared disasters. The remaining $6.6 million is provided on an ongoing basis for personnel to administer the mission tasking fund and for the support of various staff augmentations across the department.
  • Mutual Aid ($25 Million). The budget provides $25 million in ongoing General Fund to pre-position mutual aid fire engines and other related equipment in order to decrease local response times to potentially destructive wildfires and other disasters.
  • Local Disaster Preparedness and Response ($33 Million). The budget provides $33 million General Fund on a one-time basis to support various local emergency preparedness and response-related projects—such as emergency operations centers and firefighting equipment—in certain local jurisdictions.
  • Earthquake Early Warning ($16.3 Million). The budget provides $16.3 million General Fund on a one-time basis to finish the build out of the California Early Earthquake Warning System, which is expected to be operational statewide by 2021.
  • Security Grants ($25 Million). The budget provides $25 million General Fund on a one-time basis for security enhancements at nonprofit organizations and health centers that are at high risk of attack.
  • School Safety and Communications ($5 Million). The budget provides $5 million General Fund on a one-time basis for grants to K-12 schools, community colleges, and universities to acquire interoperable technology to respond to emergency events.

In addition to the state funding for OES for disaster-related purposes identified above, the budget provides $60 million annually in federal fund expenditure authority on an ongoing basis in order to allow the state to accept additional anticipated federal Hazard Mitigation Grant Program funds. We describe other disaster-related augmentations in the 2019‑20 budget in the “Resources and Environmental Protection” post.

Victim-Related Augmentations. The budget also provides OES with various General Fund augmentations in 2019‑20 related to the programs it administers for victims of crime. These augmentations include (1) $10 million on an ongoing basis to support the Human Trafficking Victim Assistance Program, (2) $6.7 million in one-time support for the Homeless Youth Emergency Services and Housing Program, (3) $5 million annually for three years for Internet Crimes Against Children taskforces, and (4) $5 million in one-time support for grants for prevention efforts for sexual and domestic violence. In addition, the budget provides $50 million in ongoing federal fund expenditure authority related to an increase in federal Victims of Crime Act funding.

Census 2020

In 2020, the federal government will conduct the decennial Census nationwide. Like many other states, California is supporting this federal effort by funding separate statewide outreach to encourage Californians to participate in the count. The 2019-20 budget provides $87.9 million for activities related to the 2020 Census. This includes:

  • $83.9 Million ($82.9 Million General Fund, $1 Million Reimbursement Authority) for Statewide Outreach and Communication. Most Census funding provided this year will support outreach. This includes, for example, geographic and demographic community outreach funding to tribal and local governments and community-based organizations. This also includes a public and media relations campaign to address awareness through a variety of mediums. Funding also will support language access activities, for example to translate various materials into languages other than English. Of the total, $2 million is earmarked specifically for local educational agency-focused strategies for Census outreach.
  • $4 Million (General Fund) for the California Housing and Population Sample Enumeration (CHPSE). In 2020, California will also conduct a survey-based enumeration of a small subset of the state’s population—an effort called CHPSE. The intent of the CHPSE is to help the state evaluate the effectiveness of its statewide outreach efforts and to improve state-level demographic estimates. (The total cost of the CHPSE is $5.3 million, but the state is reappropriating $1.3 million from a prior year’s unused Census-related funding for this purpose.)

Department of Consumer Affairs (DCA)

The budget provides DCA and its boards and bureaus with $723.3 million, almost entirely from various special funds supported primarily by license fees. This is an increase of $57.5 million, or about 9 percent, compared to the estimated spending level for 2018‑19. In addition to the augmentations described below, this net increase includes augmentations related to the state’s cannabis programs described in the “Cannabis Regulation” section of this post.

Consumer Affairs Administration Workload. The budget includes an increase of $5.1 million in 2019‑20 from various special funds, falling to $2.1 million in 2021‑22 and ongoing to support various centralized services—such as legal, accounting, and examination services—provided by DCA to boards and bureaus.

Nursing Staffing Augmentation. The budget approves $7.1 million from the Board of Registered Nursing (BRN) fund in 2019‑20, falling to $3.3 million in 2022‑23 and ongoing to address unmet workload demands related to BRN’s licensing and enforcement activities.

Business Modernization. The budget includes $5.5 million on a one-time basis in 2019‑20 from various funds to support six entities—the Board of Pharmacy; Board of Accountancy; Acupuncture Board; Board of Chiropractic Examiners; Board for Professional Engineers, Land Surveyors, and Geologists; and Bureau of Private Postsecondary Education—in their early-stage work implementing new information technology systems.

California Department of Food and Agriculture (CDFA)

The budget includes $558 million from various funds (including $156 million from the General Fund) for support of CDFA in 2019‑20. This is a decrease of $175 million, or 24 percent, from the revised 2018‑19 spending level. The decrease is mainly due to reduced spending of (1) $142 million from the Greenhouse Gas Reduction Fund, and (2) $23 million in Proposition 68 (2018) bond funds.

New Division of Citrus Pest and Disease Prevention. The budget includes a total of $5 million ($2.5 million from the General Fund and $2.5 million from the Department of Food and Agriculture Fund) to establish the Citrus Pest and Disease Prevention Division within the department. The new division will enable the department to more effectively initiate detection, suppression, eradication, and quarantine enforcement activities where Asian Citrus Psyllid and/or Huanglongbing are detected.

Farm Animal Confinement. The budget includes a total of $4.5 million from the General Fund in 2019‑20 (and $2 million annually thereafter) to support the implementation of Proposition 12 of 2018, which establishes new standards for confinement of specified farm animals and bans the sale of noncomplying products. These resources will support administrative costs and regulatory activities to ensure farmers comply with the measure.

Biodiversity Initiatives. The budget includes a total of $4.2 million from the General Fund to initiate the planning and coordination of a new California Biodiversity Initiative to (1) establish the California Biodiversity Initiative Working Group; (2) perform invasive species risk assessment activities; (3) coordinate the establishment of a germplasm program for the state; (4) implement a state weed program for rapid response, control, and eradication of noxious weeds to protect agriculture, wildlands, forests, property, and preserve native plant biodiversity; and (5) establish a soil carbon map for California. In addition to the Biodiversity Initiative proposed by the Governor, the Legislature approved (1) $5 million from the General Fund for seed banking and (2) $200,000 annually for three years from the Environmental License Plate Fund (for a total of $600,000) for the collection of rare plants.

Cannabis Regulation

The budget package reflects various actions related to the state’s continued implementation of recently enacted laws, including Proposition 64 (2016), to regulate and tax medical and adult-use cannabis.

Cannabis Tax Fund Allocations. As shown in Figure 3, the budget plan assumes that the Governor will allocate nearly $280 million from the continuously appropriated Cannabis Tax Fund in 2019‑20 for various purposes consistent with the requirements of Proposition 64. Additionally, the administration indicates it anticipates establishing roughly 180 positions across six departments—mostly in the Department of Fish and Wildlife and the Department of Parks and Recreation—to administer these funds.

Figure 3

Administration’s Expected Revenues and Allocations of Cannabis Tax Fund Revenues as of May 2019a

(In Millions)



Allocation 1:

Regulatory and Administrative


Allocation 2:

Research and Other Programs


Allocation 3:

Percentage Allocations

Youth Education Prevention, Early Intervention and Treatment Account (60 percent)

Education—childcare slots


Health Care Services—local prevention programs


Public Health—cannabis surveillance and education


Resources Agency—youth community access grants


Subtotal, Youth Account


Environmental Restoration and Protection Account (20 percent)

Fish and Wildlife—environmental cleanup and enforcement


Parks—program development, ingress and egress, and restoration


Subtotal, Environmental Restoration and Protection Account


State and Local Government Law Enforcement Account (20 percent)

State and Community Corrections—local grants for public health and safety


Highway Patrol—impaired driving and traffic safety


Subtotal, State and Local Government Law Enforcement Account


Subtotal Allocation 3


Total Expenditures


aProposition 64 continuously appropriates revenues to three allocations in priority order with direction on how much to provide for each allocation.

Equity Program Funding. The budget provides an additional $15 million from the General Fund on a one-time basis in 2019‑20 to support equity programs. These programs are intended to assist members of groups who have been disadvantaged by past state and federal drug policies participate in the legal cannabis market. The budget package also reappropriates $10 million from the General Fund that was provided in 2018‑19 for equity programs.

Statutory Changes to Streamline and Improve Cannabis Regulation. The budget package makes various statutory changes related to cannabis regulation. Some of the major provisions include (1) extending the authorization of provisional licenses from July 1, 2020 to January 1, 2022; (2) adding administrative penalties for unlicensed activity; (3) extending a California Environmental Quality Act exemption for the adoption of certain local ordinances and regulations by two years to July 1, 2021; (4) providing the Department of Health Care Services an exemption to certain state contracting requirements; (5) requiring the Department of Public Health to establish an organic certification program for manufactured cannabis products; and (6) providing guidance on how the equity program shall be administered. The budget also includes provisional language requiring the administration to consider moving cannabis enforcement responsibilities from the Department of Consumer Affairs’ Division of Investigation to its Bureau of Cannabis Control.

California Military Department (CMD)

The budget provides CMD with $249.2 million, more than half from federal funds. This is a net increase of $8.2 million, or 3 percent, compared to the estimated spending level for 2018‑19.

Discovery and Job ChalleNGe Programs. The budget provides about $6.2 million on an ongoing basis for two programs to assist at-risk youth and young adults in gaining the education, training, and other skills they need to become successful adults. This includes $2.2 million ($550,000 from the General Fund and $1.6 million from federal funds) to expand the Discovery Youth ChalleNGe Academy in Lathrop, which is aimed at assisting 16 to 18 year old high-school dropouts complete high school. Additionally, it provides $4 million ($1 million from the General Fund, $3 million from federal funds) to establish a California Job ChalleNGe Academy in Los Alamitos to assist graduates of Youth Academy programs in gaining the vocational and other career-related skills in order to secure good jobs.

Facility Improvements. The budget provides $20.2 million from the General Fund and $15.5 million from federal funds in 2019‑20 for various facility improvement projects at CMD facilities. This includes (1) $7.4 million from the General Fund and $7.4 million from federal funds for three armory renovation projects, (2) $6.8 million from the General Fund to connect and upgrade utility systems at the Lathrop-Roth Training Complex and Readiness Center, (3) $3 million from the General Fund for deferred maintenance projects, and (4) $2.3 million from the General Fund for increased costs associated with the Los Alamitos National Guard Readiness Center. Additionally, the budget provides a total of $1.2 million in 2019‑20 (and $826,000 on an ongoing basis) for staff and equipment to enhance the department’s ongoing facility maintenance program. Funding will come equally from the General Fund and federal funds.

Alcoholic Beverage Control (ABC)

The budget provides ABC with $80.9 million from the Alcohol Beverage Control Fund in 2019‑20, which is largely supported by license fees. This is a net increase of $7.3 million, or about 10 percent, compared to the estimated spending level for 2018‑19.

Program Performance Improvements. The budget includes $5.2 million from the Alcohol Beverage Control Fund in 2019‑20—increasing to a total of $7.5 million in 2022‑23 and ongoing—across various parts of the department to strengthen and modernize its operations. The budget package also includes budget trailer legislation to adjust ABC’s fees to support these additional resources and address a historic structural deficit in the Alcohol Beverage Control Fund.

Information Technology (IT) Improvements. The budget provides $2.9 million from the Alcohol Beverage Control Fund on a one-time basis in 2019‑20 to begin to implement IT improvements that would (1) support the Responsible Beverage Server (RBS) Training Program authorized by Chapter 487 of 2017 (AB 1221, Gonzales Fletcher) and (2) allow for online payments and provide other IT upgrades for ABC licensees. The budget package also includes budget trailer legislation authorizing the department to charge fees—subject to a cap—necessary to cover its reasonable costs for administering the RBS program.

California Volunteers

The California Volunteers program, under the Office of Planning and Research, manages several programs and initiatives aimed at increasing the number of Californians engaged in service and volunteering, including administration of AmeriCorps programs in California. AmeriCorps is a national service program which provides year-long volunteering opportunities in the areas of education, disaster relief, economic opportunity, health, environmental stewardship, and aid to veterans. AmeriCorps members receive a living allowance during their service and a $6,095 education grant at the end of their service.

Increased Funding for Additional AmeriCorps Members in California. The 2019-20 Budget Act makes a one-time, $20 million General Fund allocation to the California Volunteers program to (1) support roughly 500 new AmeriCorps service opportunities and (2) increase the education grant for all AmeriCorps members to $10,000.

Arts Council

The budget provides the Arts Council with $57.1 million in 2019‑20, $53.6 million of which is from the General Fund. This total funding level is a net increase of $28.5 million, or about double, compared to the estimated spending level for 2018‑19.

Ongoing Funding Augmentation. The budget includes an increase in ongoing General Fund of $10 million and 6.3 positions to support various arts-related grant programs administered by the Arts Council.

Museums and Performing Arts. The budget includes a total of $27.5 million one-time General Fund for the following projects: (1) $9 million to the Navy Training Center Foundation for renovations of the Performing Arts Center in San Diego, (2) $6 million for the Museum of the Holocaust in Los Angeles, (3) $5 million for the Armenian American Museum and Cultural Center in Glendale, (4) $4 million for the Korean American National Museum in Los Angeles, (5) $2 million for the Latino Theater Company in Los Angeles, (6) $1 million for the Italian-American Museum in Los Angeles, and (7) $500,000 for the National LGBTQ Center for the Arts in San Francisco.

State Treasurer’s Office (STO)

The budget provides STO with $37.1 million in 2019‑20. This includes $21.4 million from reimbursements, $12.4 million from the General Fund, and $3.3 million from Central Services Cost Recovery. This is a net decrease of $6.5 million, or about 15 percent, compared to the estimated spending level for 2018‑19, largely related to a reduction in reimbursements.

Shift in Funding Sources. The budget approves an increase of $7 million in General Fund support on an ongoing basis, and a corresponding decrease in reimbursements, to adjust the funding structure of the department. Additionally, the budget package includes reporting language to provide additional information on the use of the additional General Fund resources and STO’s workload.