CHA News Article

Governor Releases Revision to State Budget

Gov. Brown released a revised $115.3 billion state general fund spending plan, reflecting an increase of $6.7 billion in additional revenue through June 2016. Despite a surplus in the state’s budget, the revision does not include any meaningful increase in Medi-Cal payments to health care providers.

Today, Gov. Brown released a revised $115.3 billion state general fund spending plan, reflecting an increase of $6.7 billion in additional revenue through June 2016. Despite a surplus in the state’s budget, today’s revision does not include any meaningful increase in Medi-Cal payments to health care providers. Almost all of the additional money will go toward the constitutional funding guarantee for schools and community colleges (Proposition 98).

In his remarks, the Governor emphasized the statewide growth in the number of people on Medi-Cal. Just a few years ago there were 8 million people relying on Medi-Cal; today there are 12 million. The budget revision includes costs of $2.9 billion ($1.4 billion from the General Fund) in 2015-16 directly related to the mandatory expansion of Medi-Cal. It also includes costs of $14 billion, all federal funds, in the budget year for the optional Medi-Cal expansion.

Other adjustments to the budget include General Fund savings of $381 million in 2015-16 due to enhanced federal funding of the Children’s Health Insurance Program (CHIP). Last month President Obama signed legislation reauthorizing CHIP at the federal level that includes the enhanced federal funding, effective Oct. 1, of $381 million more than anticipated in the state’s January budget (see related story).

The May budget revision also includes $125 million in General Fund for managed care rate increases in the budget year. This is an update to rates based on the more current actuarial numbers.

In other areas, the budget revision includes the creation of a state version of the federal earned income tax credit meant to assist low-income workers, and places $3.4 billion into a rainy day reserve and debt repayment fund. The Governor emphasized that he refuses to commit to the type of ongoing spending commitments that plunged the state into red ink during the recession.

“I don’t want to get caught in the jaws of the persistent fiscal instability of the state government of California,” Brown said. “We have to learn from history and not keep repeating the mistakes.”

The revised budget contains $169 billion in total state funds, an increase of $4.3 billion from the budget released in January.

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