February 16, 2021 - This post analyzes the major adjustments to the Medi-Cal budget in 2020-21 and 2021-22, with a focus on the technical adjustments such as the administration’s caseload estimates. We will further analyze the major discretionary Medi-Cal proposals in separate publications and communications to the Legislature.
October 5, 2020 - Each year, our office publishes the California Spending Plan to summarize the annual state budget. This publication provides an overview of the 2020‑21 Budget Act, provides a short history of the notable events in the budget process, and then highlights major features of the budget approved by the Legislature and signed by the Governor. All figures in this publication reflect the administration’s estimates of actions taken through June 30, 2020, but we have updated the narrative to reflect actions taken later in the legislative session. In addition to this publication, we have released a series of issue‑specific posts providing more detail on various programmatic aspects of the budget.
May 21, 2021 - In this post, we provide our preliminary comments on the Governor’s 2021‑22 May Revision proposal for Medi‑Cal. We first provide an overview of the proposal, noting the major changes made relative to the Governor’s January budget, as well as changes made to estimated 2020‑21 spending relative to the January estimates. We then describe, and provide our comments on, the Governor’s proposal to augment the January proposal for the California Advancing and Innovating Medi‑Cal (CalAIM) package. We follow with descriptions of, and comments on, the Governor’s modified telehealth policy proposal, the proposal to extend full‑scope Medi‑Cal coverage to older undocumented immigrants, and the proposal to use American Rescue Plan Act funding to provide financial relief for designated public hospitals.
December 8, 2020 - In this post, we describe our most recent forecast for California Work Opportunity and Responsibility to Kids (CalWORKs) program costs and discuss recent caseload trends. With this post we intend to provide information but do not include any explicit recommendations to the Legislature. This post is part of our 2021-2022 Fiscal Outlook series of publications.
February 3, 2021 - In this post, we provide important background on California Work Opportunity and Responsibility to Kids (CalWORKs), updates on how caseload has been affected by the coronavirus disease 2019 (COVID-19) pandemic, and analyze the Governor’s proposed CalWORKs budget. In short, caseload has declined precipitously in the most recent data, reaching a new all-time low in November 2020 (the most recent month for which there are data). This runs contrary to both the Governor’s budget (which assumes a fairly rapid rate of caseload growth from 2020 through 2022) and the historic relationship between caseload and economic data (which suggests caseload should increase following increased unemployment). In line with other efforts the administration is proposing to support low-income individuals during the COVID-19 pandemic, we suggest the Legislature work with the administration to understand the factors leading to the lower than expected caseload and explore options for ensuring CalWORKs assistance reaches eligible families.
November 14, 2018 - The budget is in remarkably good shape. Under our estimates of revenues and spending, the state’s constitutional reserve would reach $14.5 billion by the end of 2019-20. In addition, we project the Legislature will have nearly $15 billion in resources available to allocate in the 2019-20 budget process. The Legislature can use these funds to build more reserves or make new one-time and/or ongoing budget commitments.
The longer-term outlook for the state also is positive. Under our economic growth scenario, the state would have operating surpluses averaging around $4.5 billion per year (but declining over time). Under our recession scenario, the state would have enough reserves to cover a budget problem—provided the Legislature used all of the available resources in 2019-20 to build more reserves.
Along with the Fiscal Outlook, you can find a collection of other fiscal outlook material on our fiscal outlook budget page.
May 17, 2020 - On May 14, 2020, Governor Newsom presented a revised state budget proposal to the Legislature. In this post, we provide an overview of the overall budget condition under the May Revision estimates and proposals; the major actions the Governor took to close an estimated $54 billion budget gap; and give our initial comments on this budget package.
January 13, 2020 - This report presents our office’s initial assessment of the Governor’s budget. We estimate the Governor had a $6 billion surplus to allocate to discretionary purposes in 2020-21. The Governor allocates most of the surplus toward one-time purposes, including maintaining a positive year-end balance in the state’s discretionary reserve. Under the administration’s estimates, total reserves would reach $20.5 billion at the end of 2020-21—this represents a $1.7 billion increase from the 2019-20 enacted level. California continues to enjoy a healthy fiscal situation. Despite its positive near-term picture, the budget’s multiyear outlook is subject to considerable uncertainty. In addition to describing the condition of the budget under the Governor’s proposal, this report discusses tools the Legislature can use to mitigate against these heightened risks.
January 20, 2020: Upon further review, one item included in the original version of Appendix Figure 3 on discretionary on health spending should not have been included (specfically, use of the Medi-Cal drug rebate fund to offset General Fund costs). Removing this item—which reduces General Fund spending—from the list of discretionary choices made in the Governor’s budget increases our calculation of the surplus to $6 billion. The document is updated to reflect these changes.
Update 1/24/20: Adjusted Judicial Branch items in Appendix Figure 1 to reflect ongoing spending.
February 24, 2020 - This brief provides information, analysis, and key issues to consider in evaluating the Governor’s 2020-21 budget proposals for the major programs in Department of Social Services.
November 19, 2020 - In this analysis, we (1) provide an overview of the state correctional population; (2) discuss our projections of the population through 2024-25, and (3) comment on how changes in the sizes of these populations could impact state correctional costs in both the near and long term. Specifically, we estimate that the number of inmates, parolees, and wards in the state’s correctional system will significantly decline due to two main factors—operational changes that the California Department of Corrections and Rehabilitation (CDCR) has taken to mitigate the spread of COVID-19 and various policy changes recently enacted that will further reduce the size of the state correctional population in the long term. We also estimate that these population declines will substantially slow the expected growth in CDCR’s overall projected costs through 2024-25—partially through the closure of five prisons. This publication is part of our The 2021-22 Budget: California’s Fiscal Outlook series.
May 8, 2020 - This report provides an update on the budget’s condition in light of the public health emergency and economic downturn associated with the coronavirus disease 2019. Our outlook presents two potential scenarios—a somewhat optimistic “U-shaped” recession and a somewhat pessimistic “L-shaped” recession—and assumes a baseline level of expenditures. Under these two scenarios, the state would have to address an $18 billion or $31 billion budget problem. The state’s newly emergent fiscal challenges are likely to extend well beyond the end of the public health crisis. Under both of our economic scenarios, budget deficits persist until at least 2023-24 with multiyear deficits summing to $64 billion in the U-shaped recession and $126 billion in the L-shaped recession.
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].)
February 2, 2022 - This post describes the Governor’s budget assumptions and proposals related to the In-Home Supportive Services program and offers relevant issues for Legislative consideration.
Update (2/7/22): Time requirement for incentive payment to IHSS providers in the state’s HCBS spending plan has been updated.
November 18, 2020 - This report provides our fiscal outlook for schools and community colleges. State budgeting for schools and the California Community Colleges is governed largely by Proposition 98. The measure establishes a minimum funding requirement for K‑14 education commonly known as the minimum guarantee. This report provides our estimate of the minimum guarantee for the upcoming budget cycle. (The 2021‑22 Budget: California’s Fiscal Outlook contains an abbreviated version of our Proposition 98 outlook, along with the outlook for other major programs in the state budget.)
November 14, 2018 - In this report, we examine how the minimum guarantee might change over the next several years and discuss the factors likely to be driving those changes. We then examine key aspects of district budgets—focusing on the main cost pressures facing districts over the next several years.
In addition to this report, you can find the main California's Fiscal Outlook report along with a collection of other fiscal outlook material on our fiscal outlook budget page.