Yesterday, Gov. Newsom released his first proposed state budget, totaling $209 billion for 2019-20. CHA was pleased to see health care as a primary focus of the budget. Other clear priorities are early childhood development, housing and paying down debt.
Today Gov. Brown signed the $201 billion state budget for the 2018-19 fiscal year, which begins July 1. In signing his last state budget, the Governor remarked that he has fulfilled a pledge to bring California out of the abyss it faced in the recession when he took office eight years ago. The new budget sets aside more than $16 billion that the state can use in a recession, something Brown has made a priority in the last several years.
Medi-Cal spending on Medi-Cal in the budget is $104 billion, approximately $7 billion more than last year. Other highlights of interest to hospitals include:
This morning, Gov. Brown released his revision to the 2018-19 budget proposal, including $138 billion in general fund spending and reflecting a surplus of nearly $9 billion. The revision directs half of the surplus to the Rainy Day Fund and the other half for one-time expenditures.
Presenting his final budget revision, the Governor’s tone was predictably cautious.
“We’re nearing the longest economic recovery in modern history, and as Isaac Newton observed: What goes up must come down,” the Governor said. “This is a time to save for our future, not to make pricey promises we can’t keep. I said it before and I’ll say it again: Let’s not blow it now.”
The revision maintains the Administration’s proposal to prohibit the use of the 340B Drug Discount Program within the Medi-Cal program, but with a savings for the state. The Administration estimates $16.6 million in general fund savings in 2020-21. CHA is disappointed that the budget revision continues this proposal. The 340B program allows safety-net hospitals and clinics to purchase outpatient drugs at a discount from drug manufacturers and provide them to low-income patients at little to no cost. The discounts also are used to fund a variety of outpatient health care services in local communities across the state. CHA strongly opposes this proposal and will continue to urge the Legislature to reject it.
Another item of concern in the budget revision relates to the lack of funds from Proposition 55 being allocated to the Medi-Cal program. Passed by the voters in 2016, Proposition 55 was intended to provide additional funds for public schools and ensure adequate funding for essential health care services for children and families enrolled in Medi-Cal (see CHA’s Advocacy Alert below).