From the Office of Governor Gavin Newsom

The Budget creates the biggest reserve in state history, pays off the Wall of Debt

and helps Californians tackle the cost crisis

SACRAMENTO – Governor Gavin Newsom today signed a balanced, on-time state budget that builds a strong fiscal foundation and makes significant progress toward combatting the affordability crisis that impacts too many Californians.

“The driving idea behind this budget – and my first year in office – is to combat the cost crisis and maintain fiscal discipline,” said Governor Newsom. “This is a responsible budget that saves for challenging times ahead while investing in the present-day needs of working Californians.”

The $214.8 billion budget, of which $147.8 billion is General Fund, creates the biggest reserve in state history – all while helping Californians tackle affordability challenges.

Significant details of the 2019-20 budget:

Confronting the Cost Crisis

The Budget tackles affordability challenges and expands opportunity for all Californians. The Budget supports Californians facing the cost crisis by expanding health care access, increasing housing production, making historic investments in education, expanding the Cal-EITC Working Families Tax Credit and investing in early childhood education and development.

Health Care

The Budget preserves health coverage protections for Californians and includes a series of proposals that leads the nation in reducing health care costs and increasing access for families. The Budget:

• Invests $1.45 billion over three years to increase Covered California health insurance premium support for low-income Californians – and provides premium support for the first time to qualified middle-income individuals earning up to $72,000 and families of four earning up to $150,000, partially funded by restoration of an enforceable Individual Mandate
• Expands Medi-Cal coverage to all income-eligible undocumented young adults ages 19 through 25
• Includes an increase of $1 billion, using Prop 56 funding, to support increased rates to Medi-Cal providers, expanded family planning services, and value-based payments that encourage more effective treatment of patients with chronic conditions
• Invests in and supports California’s seniors by expanding health and other vital state services to this fast-growing part of California’s population
  • Ends the “senior penalty” in Medi-Cal by raising the income eligibility limit for older Californians
  • Expands eligibility to 138 percent of the federal poverty level for the Medi-Cal Aged, Blind and Disabled program, estimated to help 22,000 Californians
  • Invests boldly in responding to Alzheimer’s disease including $3 million for research grants with a focus on women and communities of color, and $5 million for Alzheimer’s disease local infrastructure
  • Establishes a pathway to transition Medi-Cal’s drug benefit to a model where the state is directly bargaining for the lowest drug prices
  • Restores the 7 percent across the board reduction to IHSS service hours