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.
June 2, 2020 - The 2020-21 May Revision projects California Work Opportunity and Responsibility to Kids (CalWORKs) caseload to reach historic highs in response to the novel coronavirus disease 2019 pandemic and subsequent public health emergency. In this post, we describe this projection, assess it in light of recent data and historical trends, and recommend an alternative set of assumptions.
February 10, 2021 - The 2021-22 Governor’s Budget proposes $555 million General Fund to make the first interest payment on federal loans the state received to pay unemployment insurance (UI) benefits after the UI fund became insolvent during the pandemic. Our office’s estimate of the upcoming interest payment is much lower—about $260 million. This lower estimate reflects (1) more plausible, up-to-date economic projections and (2) recent federal action to waive a portion of accrued interest for 2021. We recommend the Legislature adopt this lower placeholder amount. In addition, we recommend the Legislature take advantage of a provision of federal law that allows states to defer 75 percent of their UI loan interest payments during economic downturns. If the state chooses to partially defer its interest payment, we estimate the 2021-22 UI loan interest payment would total roughly $65 million.
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.
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.
January 19, 2021 - In this brief we assess how coronavirus disease 2019 (COVID-19) has affected renters and homeowners. We also provide an updated estimate of the total unpaid rental debt in California that has accumulated due to COVID-19.
Correction 1/19/21: Legend on Figure 3 corrected to match data.
February 22, 2019 - In this report, we evaluate the Governor's major human services budget proposals for programs administered by the Department of Social Services, including the California Work Opportunities and Responsibility to Kids (CalWORKs), the Supplemental Security Income/State Supplementary Payment (SSI/SSP), the In-Home Supportive Services (IHSS), and foster care.
November 18, 2020 - Medi‑Cal, the state’s Medicaid program, provides health care coverage to about 13 million of the state’s low‑income residents. Medi‑Cal costs generally are shared between the federal and state governments. In a typical year, the General Fund covers a little more than 20 percent of total Medi‑Cal costs, with federal funds and other state and local funds respectively covering the remaining 65 percent and 15 percent of total costs. In this web post, we describe the major factors that we expect to drive changes in General Fund spending in Medi‑Cal over the near term—in 2020‑21 and 2021‑22—and over the longer term through 2024‑25. We also describe a number of key assumptions that we made in our spending projections.
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.
March 4, 2019 - In this report, we provide an overview of the Governor’s early education proposals, then analyze his three major proposals in this area. Specifically, we analyze his proposals to (1) fund facilities for more full‑day kindergarten programs, (2) make targeted one‑time improvements to the child care and preschool system, and (3) expand the number of full‑day preschool slots. We then assess the administration’s cost estimates for the California Work Opportunity and Responsibility to Kids (CalWORKs) child care programs. We end the report with a summary of our early education recommendations.
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.
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 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.
January 14, 2019 - This report presents our office’s initial assessment of the Governor’s Budget. The budget’s position continues to be positive. With $20.6 billion in discretionary resources available, the Governor’s budget proposal reflects a budget situation that is even better than the one our office estimated in the November Fiscal Outlook. The Governor’s Budget allocates nearly half of these discretionary resources to repaying state liabilities. Then, the Governor allocates $5.1 billion to one-time programmatic spending, $3 billion to reserves, and $2.7 billion to ongoing spending. Although the Governor’s allocation to discretionary reserves represents a smaller share of resources than recent budgets, the Governor’s decision to use a significant share of resources to pay down state debts is prudent. The Governor’s ongoing spending proposal is roughly in line with our November estimate of the ongoing capacity of the budget under an economic growth scenario. This was just one scenario, however. Recent financial market volatility indicates revenues could be somewhat lower than either we or the administration estimated.
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.
December 18, 2020 - To help address the state’s large budget deficit as estimated in June 2020, the 2020-21 budget package deferred a substantial amount of General Fund payments to schools and the California Community Colleges (CCC). In this post, we (1) provide background on community college cash flow and cash management, (2) describe the community college deferrals included in the state’s 2020-21 budget package, (3) explain how the CCC Chancellor’s Office is implementing these deferrals, (4) discuss how community college districts are responding, and (5) present options for the Legislature to consider, particularly given the improved budget outlook.