CHA News Article

Governor Releases Revisions to Budget

This morning Gov. Brown released his revisions to the state budget for the 2016-17 fiscal year, due to begin July 1. With revenues falling short of projections for the month of April, the Governor’s message was one of holding the line on new obligations while continuing to fund core programs.

“The surging tide of revenue has begun to turn,” said the Governor. “It is best to prepare for the days of necessity.”

The revision assumes approximately $2 billion less in revenue through June 2017 than was projected in January, due mainly to lower than anticipated income tax revenues. But the budget includes no spending cuts with the drop in revenues covered by drops in required transfers into the state reserves.

The May Revision includes $2.2 billion in federal funds for the new Medi-Cal 2020 Waiver. The waiver began Jan. 1 and includes a number of initiatives to improve health care quality, including Public Hospital Redesign and Incentives in Medi-Cal, the Global Payment Program, Whole Person Care Pilots and the Dental Transformation Initiative.

One major new policy addition to this year’s budget is the Governor’s endorsement of a Senate proposal to use $2 billion from mental health programs, Proposition 63, for housing homeless and low-income Californians. The proposal would enable the Department of Housing and Community Development to develop and administer homelessness and affordable housing programs with a particular focus on chronic homelessness. The May Revision proposes first-year funding of $267 million from the bond proceeds. The proposal requires a two-thirds vote of the Legislature, which means it will need Republican support, and could face opposition from mental health advocates.

In the budget revision, two major components of Gov. Brown’s January budget remain the same – his plan to place an extra $2 billion in reserves and spend $1.5 billion on state office projects, both items the Legislature may not support.