Emily Boerger | Jul 1, 2020
Gov. Gavin Newsom signed the 2020 Budget Act on Monday, approving a $202.1 billion spending plan agreement reached with lawmakers last week. The new budget strays from Newsom’s May Revise proposal which relied on a series of cuts to health care and safety net programs in response to the expected $54.3 billion budget deficit stemming from COVID-19.
The 2020 Budget Act addresses the deficit by deferring spending on schools and making cuts to universities, courts, and state employee compensation if federal aid isn’t received. The budget also draws $7.8 billion from the Rainy Day Fund and cancels multiple program expansions.
For COVID-19 response, the budget reflects approximately $5.7 billion in spending on personal protective equipment, hospital surge preparation, and other pandemic-related expenditures. At least 75% of these expenditures should be reimbursed by the federal government, according to the budget. A $716 million reserve is also included within the Special Fund for Economic Uncertainties for future COVID spending.
In terms of CARES Act funding, the budget allocates $4.5 billion to local school districts, $1.3 billion to counties, and $500 million to cities. $750 in General Funds is slated for counties experiencing revenue loss from COVID, and if enough federal aid is provided by October, an additional $250 million will be available for counties to protect programs serving vulnerable populations.
The budget maintains funding for Community Based Adult Services, the Multipurpose Senior Services Program, and optional benefits like full adult dental, optometry, and physical therapy. These items were at risk under Newsom’s May proposal if the federal government didn’t send additional aid to states. Funding to expand Medi-Cal to post-partum individuals diagnosed with a maternal mental health condition is also included in the new budget.
And, unlike the May Revise, funding is allocated to expanding Medi-Cal to aged, blind, and disabled individuals with incomes 123%-138% of the federal poverty level.
Funding is also set aside to address homelessness with $600 million going to Project HomeKey – a new program to expand housing for people experiencing homelessness. Also included is $300 million in General Funds to counties, cities, and continuums of care for efforts to reduce homelessness.
“In the face of a global pandemic that has also caused a recession across the world and here in California, our state has passed a budget that is balanced, responsible and protects public safety and health, education, and services to Californians facing the greatest hardships,” said Governor Newsom in a prepared statement.