Senate Passes New State Budget, Balancing Social Responsibility and Fiscal Responsibility

June 13, 2018

SACRAMENTO – The California Senate today passed a state budget for the 2018-2019 fiscal year that begins on July 1, 2018.

“We have recovered from the dark days of the recession, and now the state’s fiscal outlook is the strongest it’s been in a generation,” said Senate Leader Toni Atkins (D-San Diego).

“Because the economic rebound hasn’t reached all our residents, and because income inequality still threatens our long-term growth, we have reinvested in programs that provide opportunity,” Atkins continued. “We are continuing to increase funding for public schools and higher education. We are sending considerable resources into our communities to combat homelessness. We are reinvesting in child care and expanding the Earned Income Tax Credit.”

“At the same time, we know how economic cycles work,” Atkins added. “And so, we are building our financial reserves to a level not seen in decades – a total of $15.9 billion – with $13.8 billion going into our Rainy Day Fund to absorb the impact of the next economic downturn. I am extraordinarily pleased with this budget. I thank my colleagues for their hard work to strengthen California’s present and its future.”

“This budget strikes an appropriate balance that strengthens our state’s fiscal stability with an unprecedented level of reserves, while prioritizing investments that will address the pressing needs of this state,” Senator Holly J. Mitchell (D-Los Angeles) said in presenting the budget bill. “We continue to work toward restoring programs that still have yet to be made whole from devastating cuts during the great recession and prioritize funding to confront the challenges associated with homelessness and disaster response.”

Mitchell added: “With this budget, we continue our efforts to strengthen the state’s commitment to human infrastructure, with much needed additional resources for child care, targeted resources for higher education and financial aid, additional funds for the courts and diversion and rehabilitative services, and significant ongoing increases to K-14 education.”

Budget highlights include:

$199.6 billion in expenditures, including $138.6 billion from the General Fund.

The largest and most prudent budget reserves in a generation; a total of $15.9 billion, plus any additional funding if the economy continues to perform as forecasted. This includes $200 million in a new Safety Net Reserve.

The highest investment in K-14 school funding in history with $78.4 billion in Prop. 98 funding – a $31-billion increase (66 percent) since 2011-2012. Further, the budget includes $3.6 billion to increase Local Control Funding Formula, more than $1 billion above the Jan. 10 proposed budget, and $300 million in one-time monies for a new funding stream for low-performing students.

Increases in higher education to keep college affordable and accessible for more Californians and expand our high-skill workforce, including $260 million more for the CSU system and $210 million more for the UC system.

Increases in health-care access and mental-health services. The budget allocates $1 billion in Prop. 56 funds, $50 million for an all-payer database and to develop options for universal coverage and approximately $300 million for counties to provide mental health care.

Restoration of funding for child care and other critical family programs, providing essential services for the working poor and children living in poverty:

More than 13,000 new alternative-placement slots – $40.2 million to increase provider rates for infants, toddlers and special-needs children, as well as $123.6 million for rate increases for new full-day preschool.

$360 million to increase CalWORKs grants to ensure no child lives in deep poverty.

$200 million to end the SSI “cash out” so SSI recipients can also receive SNAP benefits.

Increases in proven programs to reduce homelessness and create more affordable housing, including $500 million ($250 million above the May revision) in one-time funding for emergency aid for local governments to respond to homelessness. The budget also contains $109 million in ongoing funds for homelessness proposed by the Governor and approximately $300 million per year for three years beginning in 2019-20 for affordable-housing construction, as proposed by the Senate.

Record allocations for local priority transportation projects to improve California’s long-neglected streets and highways, including $5 billion in SB 1 transportation funds and $300 million in deferred maintenance for levies, courts, CSU and UC.