CHA News Article

State Proposes to Cut Funding for Residencies

CHA learned late yesterday that the 2018-19 budget released by Gov. Brown contains an additional issue of great concern to many hospitals — a $40 million decrease in the University of California’s core budget. Under Proposition 56 — the Healthcare, Research and Prevention Tobacco Tax Act of 2016 — the University of California system was allocated $40 million specifically to fund graduate medical education; this reduction erases the additional funding.

Proposition 56 increased taxes on tobacco products, directing $40 million of new revenue annually to the University of California system to develop and implement a program to increase the number of primary care and emergency physicians trained in the state. All accredited residency programs in California that meet the guidelines set forth in Proposition 56 are eligible to receive funding. However, in last year’s state budget, this source of funding for graduate medical education was characterized as revenue for the University of California. As a result, the state budget reduced the University of California’s budget by the same amount. This year’s budget once again cuts the University of California budget by $40 million, compromising Proposition 56’s intent and provisions that the system serve as the public entity responsible for administering this new program. To achieve the public benefit intended by Proposition 56, it is critical that funding for the University of California be restored in this year’s budget. CHA is strongly opposed to this budget action and will work vigorously to oppose the reduction.