The Governor Releases the 2015-16 Budget Proposal

On January 9, 2015, Governor Jerry Brown introduced his budget proposal.  His proposal calls for $113 million in proposed General Fund spending, up 1.4% from last year.

Governor Brown said that his 2015-16 budget is “carefully balanced” and puts billions of dollars into schools and health care coverage.  Other key elements covered in the budget proposal include funding Proposition 1 and Proposition 2, strengthening the rainy day fund, and keeping college tuition costs flat.

Governor Brown proposed the following regarding local governments:

  • Reimbursements: Proposed $533 million to local governments towards repayment of the $800 million owed to local governments for implementation of pre-2004 mandates.
  • Property Tax Revenue: In 2014-15 and 2015-16 combined, Special Districts will receive $200 million.  The Budget anticipates ongoing property tax revenues of more than $900 million annually that will be distributed to cities, counties and special districts.
  • Redevelopment Agencies: Introduce legislation through the budget process to gradually transition the state away from the current detailed role in the Redevelopment Agencies process.
  • Funded Mandates: In June 2014, California voters approved Proposition 42, which placed the Public Records Act in the State Constitution and removed the state’s ongoing responsibility to fund the Public Records Act mandate. The Budget makes a one‑time payment of $9.6 million to fund the costs local agencies accrued, from 2001 to 2013, performing activities under the Public Records Act mandate.
  • Local Revenue Realignment: The Budget also provides $218,000 to fund the Accounting for Local Revenue Realignments mandate which involves county administration of funding changes in 2003‑2004 that addressed budget shortfalls at that time.

Governor Brown proposed the following, in regards to health care:

  • Expand coverage of Medi-Cal enrollees: Since the 2012-13 fiscal year, the number of low-income Californians covered by Medi-Cal has increased from 7.9 million to 12.2 million.  The Governor’s budget makes health care coverage available for those 12.2 million enrollees.
  • Coverage of undocumented individuals: The proposed budget does not assume any higher costs from undocumented individuals, but  granting coverage could cost the state hundreds of million dollars annually.
  • Skilled Nursing Quality Assurance Fee: Assumes continuation of the Skilled Nursing Quality Assurance Fee for five years with annual rate increases of 3.62% beginning in August.
  • Medi-Cal Provider rates: The 2014 Budget Act assumed retroactive recoupment of rate reductions for some services in fee-for service Medi-Cal and prospective savings from rate reductions in fee –for-service and managed care.  The 2014 Budget Act also exempted additional providers, including high-cost prescription drugs, specialty physician services, various distinct-part nursing facilities and nonprofit pediatric dental surgery centers.  The proposed budget reflects an estimated $130 million annual General Fund cost for Medi-Cal rate reduction exemptions.

For more detailed information regarding the Governor’s proposed budget, please click here.  If you have any questions, please contact the Advocacy Team.

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