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Budget Act 2020

Tuesday, June 30, 2020  
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On Monday, 6/29 Gov. Gavin Newsom signed a $202 billion budget which included emergency pandemic funding, expanded unemployment aid, and cuts across the board due to the coronavirus-caused recession.


The budget makes an effort to promote economic recovery and close the $54.3 billion budget shortfall caused by the COVID-19 recession.


The Budget dedicates $5.7 billion to public safety and health care in response to COVID-19. Expenditures will go to personal protective equipment (PPE), hospital surge preparation and other safeguards necessary to safely reopen the economy during COVID-19. The budget also includes $716 million for Gov. Newsom to use for emergency pandemic purposes.


The program created last year expanding Medi-Cal eligibility to seniors was preserved, along with Prop. 56 funding. The budget also did not change Covered California health insurance subsidies for middle-income households.


The budget anticipates relief spending for the cities and counties serving on the front lines of the pandemic. Of the $9.5 billion in federal Coronavirus Relief Funding received by the state, $4.5 billion is allocated to local school districts, $1.3 billion is allocated to counties, and $500 million goes to cities. The Budget also includes an additional $750 million from the General Fund to support counties experiencing revenue loss due to the pandemic.


The budget does not make immediate cuts to k-14 education but rather defers payments into future budget years. The Universities of California and California State Universities did not make out so lucky. Hundreds of millions were cut from the public university system, however $1 billion may be restored through the federal government.


Funding to mitigate homelessness did get approved. California will allocate $600 million for Project HomeKey to acquire permanent housing through the purchase and renovation of motel properties throughout the state.


The 2020 Budget Act reflects the fiscal reality that in January, California was projecting a surplus of $5.6 billion, but by the May Revision, the state confronted a budget deficit of $54.3 billion — a four-month swing of $60 billion caused by the COVID-19 recession.

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